YETI Holdings Inc

Yeti Holdings has turned things around this year, with sales continuing to grow despite challenges such as tariffs impacting margins and poor consumer sentiment. The brand's global appeal is evident, particularly with growth in markets outside the US, indicating that there is still significant runway for expansion. The Fund believes in the potential for further growth as consumer sentiment improves.

Yeti Holdings was the Fund’s strongest contributor for the month, delivering a strong first quarter result with sales up 8% and profits higher than market expectations, despite dealing with increased tariff costs. Growth in markets outside the US is proving the brand's global appeal, indicating a robust growth trajectory and a strong competitive position in the market.

YETI Holdings detracted modestly from results in Q3, but we believe this was due to a rotation away from discretionary goods and tariff uncertainty, not a decline in the business. Our investment case is supported by a strong management team, international expansion, and product diversification. YETI's gross margin is near 57%, operating margin around 16%, and free cash flow margin about 12% of sales, all while maintaining a net cash position. Valued at roughly 12x forward earnings, YETI trades below its historical average despite having a stronger management team and better growth prospects. We hold YETI with conviction, expecting it to deliver on cash earnings growth and create significant value.

Yeti stock significantly declined in the spring, creating the window to purchase the stock. Perception of Yeti is that they are a drinkware and cooler company, but the company has evolved into many other product lines, including back packs, chairs, hats, and camping gear. Also, the drinkware line may be reinvigorated by the new sports team logo designs for teams in the NFL, NHL, MLB & NCAA. Yeti received orders for Chicago Cubs, Buffalo Bills and Toronto Maple Leaf’s tumblers recently. The stock of Yeti offers significant appreciation potential, especially with small cap companies doing better.

Yeti is a prime example of a company with extensive product lines including drinkware, coolers, luggage, beach chairs, and backpacks. Despite the stock being down over 20% in 2025, we believe the selling pressure has subsided, presenting an opportunity for above-market returns if investor concerns prove overstated. The company meets traditional criteria of growth and competitive advantages, which are essential for producing above-market returns.

Yeti is a prime example of a company with extensive product lines including drinkware, coolers, luggage, beach chairs, and backpacks. Despite the stock being down over 20% in 2025, we believe the selling pressure has subsided, presenting an opportunity for above-market returns if investor concerns prove overstated. The company meets traditional criteria of growth and competitive advantages, which are essential for producing above-market returns.

Yeti was mentioned as a consumer discretionary name that cost the Fund a bit of money, though it had less than a 1% impact. The letter indicates that these consumer discretionary names remain in the portfolio and have been added to recently, suggesting that the manager sees potential in this area despite current challenges.

Yeti (NYSE:YETI) cost the Fund a bit of money, though each had less than a 1% impact. But in many ways, it’s the same bet. These consumer discretionary names remain in the portfolio, and have been added to recently. This remains an area of cheap valuations and one of the more interesting veins of opportunity right now.

Yeti Holdings, Inc. is a global designer and retailer of premium outdoor products, known for its high-quality insulated coolers and tumblers. Despite recent growth slowing to 3.98% in 2023 and trading at 8x EBITDA, the company has significant opportunities for value creation. These include geographic expansion into Europe and Asia, and product category diversification into luggage and camping equipment. Additionally, with $280 million in net cash and nearly $300 million in EBITDA, YETI should engage in stock buybacks to enhance shareholder value. The company has entered a Cooperation Agreement with Engaged Capital to strengthen its board, which will aid in executing these growth strategies.

Yeti Holdings, Inc. is a global designer and retailer of premium outdoor products, known for its high-quality insulated coolers and tumblers. Despite recent growth slowing to 3.98% in 2023 and trading at 8x EBITDA, the company has significant opportunities for value creation. These include geographic expansion into Europe and Asia, and product category diversification into luggage and camping equipment. Additionally, with $280 million in net cash and nearly $300 million in EBITDA, YETI should engage in stock buybacks to enhance shareholder value. The company has a strong brand and competitive edge in insulation, which supports its growth potential.