By Sam Boughedda
YETI Holdings Inc (NYSE:YETI) shares fell as low as $34.80 per share on Thursday after it missed earnings, revenue, and guidance consensus estimates when it reported earnings for its latest quarter.
The company, which designs, markets, and distributes products for the outdoor and recreation market, reported fourth-quarter earnings of $0.78 per share, $0.01 worse than the analyst estimate of $0.79, while revenue for the quarter came in at $448 million versus the consensus estimate of $491.98M.
The company's disappointing sales were affected by a $38.4M unfavorable impact related to the voluntary product recalls involving certain products in Coolers & Equipment. This hurt YETI's wholesale channel sales, which decreased by 23%.
At the time of writing, YETI shares are down over 3% at $38.49 per share.
The company's guidance also disappointed investors. YETI sees FY2023 earnings between $2.12 and $2.23 per share versus the consensus of $2.82. It also sees adjusted sales increasing between 3% and 5%, with adjusted sales growth weighted to the second half of the year, inclusive of an approximate 500 basis points' unfavorable impact on its growth rate from the stop sale of the affected products recall.
Following the report, Stifel analysts said that YETI's FY4Q adjusted revenue and adjusted operating income were "light of expectations."
"DTC trends remained strong though wholesale was softer due to later season selling and lower reorders. These are adjusted numbers. The financial impact of a previously disclosed recall of soft coolers with magnetic closures has significant impact on FY4Q and FY23 (details herein)," wrote the analysts.
They added that with an upside case dependent on adjusted earnings assumptions or looking forward to 2024, they see a risk of further selling pressure. In addition, they maintained a Hold rating and $43 price target on the stock but said the firm's estimates and target are under review.