Outdoor gear company Yeti Holdings Inc (NYSE:YETI) had a miserable debut Thursday weighed down by a market in full retreat, but CEO Matt Reintjes shrugged off the IPO’s drop saying “one-day action” was divorced from the company's long-term growth potential.
Yeti closed 5.6% down Thursday to $17 and fell 4.4% Friday to $16.25. Yeti priced its IPO of 16 million shares at $18 each, below the expected range of $19 to $21. The IPO brought in about $288 million.
Yeti was founded nearly a decade ago by Texas brothers Roy and Ryan Seiders who sold coolers to Gulf Coast hunters and fishermen, but the company has since grown quickly with its popular mass-market Yeti brand coolers, mugs, waterproof blankets and cool camping gear.
"We didn't go into this for a one-day action," Reintjes told CNBC's "Squawk on the Street" as the initial public offering began trading on the New York Stock Exchange during a time of high stock market volatility. "Long-term sustainable growth has been our plan all along."
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For 2016, Yeti which bills itself as an "emerging growth company" reported revenue of $818.9 million and net income of $48.8 million. That fell to revenue of $639.2 million and net income of $15.4 million in 2017. Yeti sales appear to be picking up steam again, as revenue for the first six months of 2018 is $341.5 million, compared to $254.1 million in the first half of 2017.
The Austin, Texas-based maker of $20 Rambler mugs, $1,300 coolers and outdoor gear has attracted a cult-like following among its customer base which includes millennials. Defending the high costs, Reintjes says Yeti's goal is to change customers' expectations and lean on its loyal following.
"The price is just a result of the design and performance we bring to the product," said Reintjes.
He said Yeti has found success with its hard and soft coolers and drinkware over the past dozen years. "We're excited about our future and what our products bring to our loyal consumers," said Reintjes.
Contact Uttara Choudhury at uttara@proactiveinvestors.com
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