YETI Raises 2026 Adjusted Earnings Outlook After Tariff Refunds
Second-quarter sales reached $483.9 million as the outdoor-products company lifted full-year adjusted EPS to $2.94 to $3.00.
YETI Holdings (YETI) raised its 2026 adjusted earnings outlook after a second quarter in which sales growth accelerated and a large IEEPA tariff refund lifted GAAP profit. The company now expects adjusted EPS of $2.94 to $3.00, or 19% to 21% growth, up from a prior range of $2.83 to $2.89, or 14% to 17% growth.
Sales increased 9% to $483.9 million in the quarter ended July 4, 2026, faster than the 8% rise in the first quarter. The Austin-based designer, retailer, and distributor of outdoor products saw gains across categories, regions, and channels, with Coolers & Equipment and international sales accelerating.
Coolers & Equipment sales increased 16% to $232.4 million, after 11% growth in the first quarter. Bags, soft coolers, cases and storage, and outdoor living led the category. Drinkware sales increased 2% to $241.4 million, slower than 5% growth in the prior quarter, driven by international growth and continued product innovation.
International sales increased 19% to $92.9 million, after 9% growth in the first quarter. Europe and Australia led the gain, with growth also in Canada and Japan. U.S. sales increased 6% to $391.0 million.
Wholesale channel sales increased 10% to $218.0 million, slower than 19% growth in the first quarter. Direct-to-consumer sales increased 7% to $265.9 million, reversing a flat first-quarter result. Amazon Marketplace, YETI websites, and retail stores drove the DTC gain.
Gross margin increased 890 basis points to 66.7%, including 110 basis points of favorable operational drivers and a 780 basis point net tariff benefit. Adjusted gross margin increased 170 basis points to 59.5%, including the same 110 basis points of operational drivers and a 60 basis point net tariff benefit. Operational drivers included pricing discipline and product cost management.
During the quarter, YETI concluded that recovery of IEEPA tariffs was probable and recorded a $45.6 million net benefit, consisting of a $42.6 million reduction of cost of goods sold and $2.9 million of interest income. Non-GAAP results excluded $34.4 million related to 2025 tariff costs and the $2.9 million of interest income.
Net income increased 39% to $71.3 million, or 14.7% of sales. Diluted EPS increased 54% to $0.94, including an approximately $0.40 net tariff benefit. Adjusted net income decreased 8% to $50.7 million. Adjusted EPS increased 2% to $0.67. Operating income increased 51% to $93.5 million, or 19.3% of sales. Adjusted operating income decreased 7% to $68.2 million, or 14.1% of sales.
SG&A expenses increased 17% to $229.0 million, or 47.3% of sales. Adjusted SG&A expenses increased 19% to $219.9 million, or 45.4% of sales. The increase reflected a shift in the timing of a brand campaign into the second quarter, inflation in distribution and fulfillment, higher incentive compensation, and headcount for international expansion.
The company maintained 2026 sales growth of 7% to 8%. It increased the 2026 adjusted operating income margin outlook to 14.9% from 14.6% previously. The outlook improvement reflected year-to-date sales, gross-margin strength, and the timing of share repurchases, partially offset by growth investments and inflation. The non-GAAP outlook excludes the net benefit from IEEPA refunds associated with 2025 tariffs and assumes U.S. tariff rates of about 20% in the second half of 2026.
YETI repurchased 2.8 million shares for $130.0 million in the quarter. About $370.0 million remained under its $500 million authorization. Cash was $59.8 million and inventory was $359.1 million. Free cash flow for the full year remains expected at $200 million to $225 million.
The company will host an Investor Day on September 17, 2026, in Austin, Texas, where management will discuss its long-term strategic plan.