YETI (NYSE:YETI) lifted its full-year guidance and topped first-quarter expectations, offering investors a more confident growth trajectory just as concerns over consumer spending and tariff headwinds had weighed on the stock.
The outdoor lifestyle brand now expects fiscal 2026 net sales growth of 7% to 8%, tightened from a prior range of 6% to 8%, and raised its adjusted EPS outlook to $2.83-$2.89 from $2.77-$2.83.
Adjusted operating margin guidance moved to 14.6% from 14.4%, with the company noting the figure does not yet incorporate any potential favorable impact from IEEPA tariff refunds, leaving room for further upside. Additional targets include free cash flow of $200 million to $225 million, capital expenditures of $60 million to $70 million.
The raised outlook arrived at a moment when investors had broadly expected the opposite. Ongoing geopolitical tensions had pressured discretionary spending and cast doubt on the achievability of the company's top-line targets, while uncertainty around commodity costs and the tariff environment had clouded the margin picture. YETI's shares had fallen approximately 13% year to date heading into the print.
The guidance lift was underpinned by a strong quarterly performance. YETI reported first-quarter EPS of $0.26, well above UBS and Street forecasts of $0.16 and $0.18, respectively. Total revenue rose 8.3%, outpacing UBS's 6.1% estimate and the Street's 6% projection.
Wholesale surged 18.5% well above expectations, Coolers and Equipment and Drinkware also beat forecasts, while direct-to-consumer revenue came in at just 0.3% growth, hampered by a decline in global corporate sales.
Adjusted gross margin came in at 55.3%, contracting 208 basis points year over year but beating UBS and Street estimates of 54.3% and 53.8%. Operating margin of 7% similarly exceeded expectations of 4.5% and 5%.
With the stronger print and raised outlook now in hand, UBS said it would not be surprised to see shares trade higher, noting an indicated gain of approximately 10% at the time of the note. The firm said the key question from here is whether top-line momentum can hold as consumer pressures continue to build.