AUSTIN, Tex. _ Yeti Holdings, maker of "built-for-the-wild" coolers, beat Wall Street expectations in its first earnings report since it became a publicly traded company in October.
The company sells high-end coolers, drinkware and outdoor gear, said Thursday that net income for the quarter rose to $17 million, or 21 cents a share, from $11.3 million, or 14 cents a share, in the same period a year ago. Excluding non-recurring items, adjusted earnings per share came to 24 cents.
Sales for the quarter that ended Sept. 29 increased 7 percent to $196.11 million. Analysts had expected Yeti earnings of 21 cents per share on revenue of $196 million, according to Zacks Investment Research.
After the earnings report was issued, shares of Yeti initially rallied to a new high, but then reversed course and turned sharply lower. Shares were at $16.95, down $2.25 or $11.7 percent, in mid-day trading.
"We are pleased with our performance in the third quarter which resulted in a significant increase in both gross margin and net income," Matt Reintjes, Yeti CEO, said in a written statement. "We continue to support and stoke a passionate customer base, design and develop superior product, and optimally balance our omni-channel distribution."
Baird analyst Peter Benedict said higher drinkware sales offset an expected decrease in the company's cooler business. The stock offers an attractive risk-reward as it trades below its peers' valuations, Benedict wrote in a research report.
Yeti was founded in 2006 by brothers Roy and Ryan Seiders who launched a line of rugged, hard-case coolers targeted at hunters and anglers. Yeti has since built a loyal fan base among sporting enthusiasts who have embraced the heavily insulated, nearly indestructible coolers, paying from $200 to $1,200 depending on the size. The company has expanded from its original niche to a larger mainstream audience in recent years with products including drinkware, bags and accessories.
The company raised $288 million in its initial public offering of stock on Oct. 25. It sold 16 million shares for $18, below the marketed range of 20 million shares at $19 to $21 apiece to investors, according to securities filings.
Looking forward, Yeti said it sees full-year revenue rising 19 percent to 20 percent with adjusted earnings per share of 79 cents to 82 cents. Analysts expected 75 cents.
