Bear of the Day: YETI (YETI)

YETI Holdings, Inc. (YETI) cut guidance in May 2025 due to the impact of the tariffs. This Zacks Rank #5 (Strong Sell) is now expected to see a double-digit decline in earnings this year.YETI is a designer, retailer and distributor of outdoor products worldwide. This includes coolers, drinkware, backpacks and bags.A Beat in the First Quarter of 2025On May 8, 2025, YETI reported its first quarter 2025 results and beat on the Zacks Consensus by $0.04. Earnings were $0.31 compared to the consensus of $0.27.This was the 5th earnings beat in a row.Net sales rose 3% to $351.1 million from $341.4 million a year ago. Direct-to-consumer sales rose 4% to $196.2 million primarily due to growth in Coolers & Equipment.While Wholesale channel sales rose just 1% to $154.9 million, also due to growth in Coolers & Equipment.However, the first quarter seems like a different world as Liberation Day tariffs changed the business in April.YETI’s Plan to Mitigate the TariffsYETI already had a plan for supply chain diversification, which is ahead of plan. It is aggressively diversifying its sourcing out of China.It expects, by the end of 2025, to have limited exposure to future goods sourced from China. Less than 5% of its total costs of goods will be related to products from China, for the U.S. market.YETI’s ability to generate cash is expected to be intact, even with the disruption from the tariff impacts.YETI Lowers 2025 GuidanceBut while it is mitigating the tariffs, sales and earnings are still expected to be impacted.For 2025, adjusted sales are expected to increase between 1% and 4%, down from its prior projection of 5% to 7%.Earnings are now expected to be in the range of $1.96 to $2.02, down from the prior projection of $2.90 to $2.95.Not surprisingly, the analysts had to cut their estimates to get in line with the new guidance. 10 estimates were cut in the last 30 days for 2025.The Zacks Consensus fell to $2.04 from $2.88. That’s down 25.3% from 2024, when YETI made $2.73.10 estimates were also cut for 2026.You can see the results on the price and consensus chart.Image Source: Zacks Investment ResearchShares Near 1-Year LowsYETI was a pandemic winner as people headed outdoors. But since 2022, it’s been tougher.Shares are down double digits over the last year.Image Source: Zacks Investment ResearchIt’s cheap. It trades with a forward price-to-earnings (P/E) ratio of just 14.6. A P/E under 15 usually indicates value.YETI has a strong balance sheet. It had cash of $259 million as of the end of the first quarter and total debt of $77 million.However, it lowered its 2025 free cash flow guidance to a range of $100 to $125 million from $200 million due to the impact from supply chain disruptions as well as higher tariff cost.Investors interested in YETI might want to wait for more certainty on the tariff fall-out before jumping in.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.0% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report YETI Holdings, Inc. (YETI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks