A maker of rugged outdoor gear, YETI designs premium coolers, drinkware, and equipment sold under names like the Rambler and Hopper collections through its own website and retailers such as Dick's Sporting Goods and REI. Brothers Roy and Ryan Seiders founded the company in 2006 after getting fed up with flimsy coolers that broke when they stood on them while fishing. They named it after the legendary Himalayan snowman to evoke toughness and cold resistance.
Gross margin hit 66.7% as a $45.6M tariff refund benefit masked a 17% SG&A increase.
A one-time tariff refund reshaped the quarter. rose 9% to $483.9 million and reached 66.7% after a $45.6 million benefit flowed through cost of goods sold, while rose 51% to $93.5 million. The underlying business, however, saw SG&A climb 17% and the core tariff remains unresolved.
Key takeaways
expanded 8.9 points to 66.7%, driven almost entirely by a net $45.6 million benefit from IEEPA tariff refunds recognized in cost of goods sold.
rose 9% to $483.9 million, with Coolers & Equipment up 16% and Drinkware up 2%, helped by international growth and new product launches.
SG&A expenses rose 17% to $229.0 million, driven by a brand campaign timing shift that increased marketing spend and by higher distribution and fulfillment costs.
Section summaries
Management's Discussion and Analysis
Q2 2026 net sales rose 9% to $483.9M, gross margin surged to 66.7% driven by a $45.6M IEEPA tariff refund benefit.
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Total increased 9% to $483.9M, with Coolers & Equipment up 16% and Drinkware up 2%, driven by international growth and new product launches.
expanded 890 to 66.7%, primarily due to a net $45.6M benefit from IEEPA tariff refunds recognized in cost of goods sold.
rose 51% to $93.5 million, but the increase was entirely attributable to the tariff refund; without it, operating income would have been roughly flat .
The direct-to-consumer channel grew 7% to $265.9 million, led by Amazon Marketplace and YETI websites, while wholesale rose 10% to $218.0 million.
The company repurchased 2.8 million shares for $130 million in the quarter, with $370 million remaining under its expanded authorization, while cash and equivalents fell to $59.8 million from $269.7 million a year ago.
What changed
The prior quarter's watch item — whether the 280-basis-point tariff would intensify — was overtaken by a $45.6 million that more than reversed the drag, pushing to 66.7% from 55.3% in Q1 2026.
Drinkware returned to growth at 2%, after a 5% increase in Q1 2026 had already broken a streak of two consecutive 4% declines in the second half of FY2025.
SG&A as a percentage of sales fell to 47.3% from 52.0% in Q1 2026, but remained elevated above the 43.9% rate in Q2 2025, as the brand campaign timing shift and higher fulfillment costs kept the cost base high.
The company disclosed an estimated $66.5 million in potential IEEPA tariff refunds, of which $45.6 million was recognized in Q2, with the remainder still uncertain after a February 2026 U.S. Supreme Court ruling found those tariffs unlawful.
Cash and equivalents dropped to $59.8 million, the lowest level since FY2016, as the company deployed $130 million for share repurchases while rose to $96.4 million from $70.1 million a year ago.
What to watch
in Q3 FY2026, to see whether it normalizes back toward the mid-50s now that the one-time $45.6 million tariff refund has been recognized, and whether the underlying tariff continues to pressure product costs.
Recognition of the remaining $20.9 million in potential IEEPA tariff refunds, to see whether the company determines eligibility is probable and records an additional material benefit.
SG&A as a percentage of sales in Q3 FY2026, to gauge whether the 47.3% rate continues to lever down as the brand campaign timing shift reverses, or whether higher fulfillment and distribution costs represent a structural increase.
Cash and equivalents trajectory, given the balance fell to $59.8 million while the company continues to shares with $370 million remaining on its authorization.
expenses rose 17% to $229.0M, driven by higher marketing spend from a brand campaign timing shift and increased distribution and fulfillment costs.
channel sales grew 7% to $265.9M, led by Amazon Marketplace and YETI websites, while wholesale channel sales increased 10% to $218.0M.
The company repurchased 2.8M shares for $130M in Q2, with $370M remaining under its expanded authorization.
turned positive to $29.8M for the first half of 2026, compared to a $19.1M use of cash in the prior year period.
Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to our market risk exposures or management of market risk from those disclosed in Quantitative and Qualitative Disclosures About Market Risk included under Item 7A in our Annual Report on Form 10-K for the year ended January 3, 2026.
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There have been no material changes to our market risk exposures or management of market risk from those disclosed in Quantitative and Qualitative Disclosures About Market Risk included under Item 7A in our Annual Report on Form 10-K for the year ended January 3, 2026.
We are involved in various claims and legal proceedings, some of which are covered by insurance. We believe that our existing claims and proceedings are not material.
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We are involved in various claims and legal proceedings, some of which are covered by insurance. We believe that our existing claims and proceedings are not material.
There have been no material changes to the risk factors contained in Part I, Item 1A of our Annual Report on Form 10-K for the year ended January 3, 2026.
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There have been no material changes to the risk factors contained in Part I, Item 1A of our Annual Report on Form 10-K for the year ended January 3, 2026.