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What changed in YETI Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of YETI Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+295 added−281 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-26)

Top changes in YETI Holdings, Inc.'s 2025 10-K

295 paragraphs added · 281 removed · 222 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

43 edited+4 added−7 removed29 unchanged
Biggest changeWe believe these materials are readily available from multiple vendors. We stipulate approved suppliers and control the specifications for key raw materials used in our products. We do not directly source significant amounts of these raw materials and components. We do not own or operate any manufacturing facilities.
Biggest changeThe primary raw materials and components used by our manufacturing partners include polyethylene, polyurethane foam, stainless-steel, polyester fabric, zippers, magnets, and other plastic materials and coatings. We believe these materials are readily available from multiple vendors. We stipulate approved suppliers and control the specifications for key raw materials used in our products.
Refer to Note 2 of the Notes to Consolidated Financial Statements for net sales by product category. Coolers & Equipment Our Coolers & Equipment family is comprised of hard coolers, soft coolers, cargo, bags, outdoor living, and associated accessories. Hard Coolers. Our hard coolers are built with seamless rotomolded construction or injection molding construction, making them nearly indestructible.
Refer to Note 3 of the Notes to Consolidated Financial Statements for net sales by product category. Coolers & Equipment Our Coolers & Equipment family is comprised of hard coolers, soft coolers, cargo, bags, outdoor living, and associated accessories. Hard Coolers. Our hard coolers are built with seamless rotomolded construction or injection molding construction, making them nearly indestructible.
We actively communicate and listen to employees through multiple internal channels and encourage employees to provide feedback about their experiences through ongoing employee engagement activities, including employee satisfaction surveys. We strive to address feedback in real time and provide an environment where our employees can have fulfilling careers and be more productive, creative, happy, and healthy.
We actively communicate and listen to employees through multiple internal channels and encourage employees to provide feedback about their experiences through ongoing employee engagement activities, including employee satisfaction surveys. We strive to address feedback in real time and provide an environment where our employees can have fulfilling careers and be more productive, creative, happy, and healthy. Learning and Development .
Related accessories include the Rambler Bottle Straw Cap, Rambler Bottle Chug Cap, Rambler Magslider Lid, Rambler Straw Lid, Rambler Magslider color pack, Rambler Tumbler Handles, and Rambler Jug Mount. Other Our Other category offers an array of apparel and gear, such as hats, shirts, bottle openers, and ice substitutes. Segment Information We operate as one reportable segment.
Related accessories include the Rambler Bottle Straw Cap, Rambler Bottle Chug Cap, Rambler Magslider Lid, Rambler Straw Lid, Rambler Magslider color pack, Rambler Tumbler Handles, Rambler Jug Mount, and Ice Scoop. Other Our Other category offers an array of apparel and gear, such as hats, shirts, bottle openers, and ice substitutes. Segment Information We operate as one reportable operating segment.
For more detailed information regarding our programs and initiatives related to human capital management, please see the “People” section of our 2023 Environmental, Social, and Governance Report (“ESG Report”), located on our website at www.yeti.com/en_US/esg.html.
For more detailed information regarding our programs and initiatives related to human capital management, please see the “People” section of our 2024 Environmental, Social, and Governance Report (“ESG Report”), located on our website at www.yeti.com/en_US/esg.html.
Changes in tax policy or trade regulations, or the imposition of new tariffs on imported products, could have an adverse effect on our business and results of operations. In addition, we are subject to changing regulatory restrictions and requirements, including in the areas of data privacy, sustainability and responses to climate change.
Changes in tax policy or trade regulations, or the imposition of new or increased tariffs on imported products, could have an adverse effect on our business and results of operations. In addition, we are subject to changing regulatory restrictions and requirements, including in the areas of data privacy, information security, sustainability and responses to climate change.
Distribution and Inventory Management We utilize global third-party logistics providers to warehouse and distribute finished products from our distribution facilities in Memphis, Tennessee and Salt Lake City, Utah to support our domestic operations, and in Australia, Canada, the United Kingdom, New Zealand, and the Netherlands to support our international operations.
Distribution and Inventory Management We utilize global third-party logistics providers to warehouse and distribute finished products from our distribution facilities in Memphis, Tennessee, Salt Lake City, Utah, and Sumner, Washington to support our domestic operations, and in Australia, Canada, the United Kingdom, New Zealand, Vietnam, and the Netherlands to support our international operations.
Sales Channels We offer our products in the United States, Canada, Australia, New Zealand, Europe, and Japan through a diverse omni-channel strategy, comprised of our wholesale and our direct-to-consumer ( “ DTC ” ) channels.
Sales Channels We offer our products in the United States, Canada, Australia, New Zealand, Europe, and Japan through a diverse omni-channel strategy, comprised of our wholesale and our direct-to-consumer (“DTC”) channels.
We have a history of consistently broadening our high-performance, premium-priced product portfolio to meet our expanding customer base and their evolving pursuits. Our culture of innovation and success in identifying customer needs and wants drives our robust product roadmap. In 2023, net sales of Coolers & Equipment, Drinkware, and Other represented 36%, 62%, and 2% of net sales, respectively.
We have a history of consistently broadening our high-performance, premium-priced product portfolio to meet our expanding customer base and their evolving pursuits. Our culture of innovation and success in identifying customer needs and wants drives our robust product roadmap. In 2024, net sales of Coolers & Equipment, Drinkware, and Other represented 38%, 60%, and 2% of net sales, respectively.
We collaborate with our YETI Ambassadors, a diverse group of people throughout the United States and select international markets, comprised of world-class anglers, hunters, rodeo cowboys, barbecue pitmasters, surfers, brewmasters, fitness experts, skateboarders, and outdoor adventurers who embody our brand, and industry professionals to test our prototypes and provide feedback that is incorporated into final product designs.
We collaborate with our YETI Ambassadors, a diverse group of people throughout the world, comprised of elite anglers, hunters, rodeo cowboys, barbecue pitmasters, surfers, brewmasters, fitness experts, skateboarders, and outdoor adventurers who embody our brand, and industry professionals to test our prototypes and provide feedback that is incorporated into final product designs.
In 2022, our net sales in the first, second, third, and fourth quarters represented 18%, 26%, 27%, and 29%, respectively, of our total net sales for the year. 8 Table of Contents Intellectual Property and Brand Protection We own patents, trademarks, copyrights, and other intellectual property rights that support key aspects of our brand and products.
In 2023, our net sales in the first, second, third, and fourth quarters represented 18%, 24%, 26%, and 32%, respectively, of our total net sales for the year. 8 Table of Contents Intellectual Property and Brand Protection We own patents, trademarks, copyrights, and other intellectual property rights that support key aspects of our brand and products.
We attract and reward our employees by providing competitive benefits, including market-competitive compensation, healthcare, 401(k) program, paid time off, bonding leave, as well as health, wellness, and financial planning programs . Communication and Engagement .
We attract and reward our employees by providing market-competitive compensation, healthcare, retirement benefits, paid time off, bonding leave, as well as mental health, wellness, and financial planning programs. Communication and Engagement .
Our cargo, bags, and outdoor living product category includes: LoadOut Bucket, LoadOut GoBox, the Panga submersible duffel bag, Panga Backpack, Crossroads Collection of backpacks, duffel bags, luggage, and packing cubes, Camino Carryall, Hondo Base Camp Chair, Trailhead Camp Chair, Lowlands Blanket, Trailhead Dog Bed, Boomer Dog Bowls, and SideKick Dry gear case.
Our cargo, bags, and outdoor living product category includes: LoadOut Bucket, LoadOut Swivel Seat, LoadOut GoBox, the Panga submersible duffel bag, Panga Backpack, Crossroads Collection of backpacks, duffel bags, luggage, and packing cubes, Camino Carryall, Hondo Base Camp Chair, Trailhead Camp Chair, Lowlands Blanket, Trailhead Dog Bed, Boomer Dog Bowls, and SideKick Dry gear case, as well Mystery Ranch branded products (discussed below).
Our fiscal years ended December 30, 2023 (“2023”), December 31, 2022 (“2022”) and January 1, 2022 (“2021”) spanned 52 weeks each. Our fiscal year ending December 28, 2024 (“2024”) will span 52 weeks.
Our fiscal years ended December 28, 2024 (“2024”), December 30, 2023 (“2023”) and December 31, 2022 (“2022”) spanned 52 weeks each. Our fiscal year ending January 3, 2026 (“2025”) will span 53 weeks.
Seasonality Historically, we have experienced our highest levels of net sales in the fourth quarter of the year coinciding with the seasonal holiday shopping season. In 2023, our net sales in the first, second, third, and fourth quarters represented 18%, 24%, 26%, and 32%, respectively, of our total net sales for the year.
Seasonality Historically, we have experienced our highest levels of net sales in the fourth quarter of the year, coinciding with the seasonal holiday shopping season. In 2024, our net sales in the first, second, third, and fourth quarters represented 19%, 25%, 26%, and 30%, respectively, of our total net sales for the year.
The Hopper soft cooler product line includes: Hopper M15 Soft Cooler, Hopper M12 Soft Backpack Cooler, Hopper M30 Soft Cooler, Hopper M20 Backpack Cooler, Hopper Flip Soft Cooler, Daytrip Lunch Bag, and Daytrip Lunch Box. Our soft coolers also include related accessory options such as the Rambler Bottle Sling, MOLLE Zinger retractable lanyard, and a mountable MOLLE Bottle Opener.
The Hopper soft cooler product line includes: Hopper M15 Soft Cooler, Hopper M12 Soft Backpack Cooler, Hopper M30 Soft Cooler, Hopper M20 Backpack Cooler, Hopper Flip Soft Cooler, Daytrip Lunch Bag, and Daytrip Lunch Box. Related accessories include the Rambler Bottle Sling, MOLLE Zinger retractable lanyard, and a mountable MOLLE Bottle Opener.
We believe these intellectual property rights, combined with our innovation and distinctive product design, performance, and brand name and reputation, provide us with a competitive advantage. We protect our intellectual property rights in the United States and certain international jurisdictions on all new products.
We believe these intellectual property rights, combined with our innovation and distinctive product design, performance, brand name and reputation, provide us with a competitive advantage. We protect our intellectual property rights in the United States and certain international jurisdictions. All product designs, specifications, and performance characteristics are developed and documented.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 5 Table of Contents Cargo, Bags, and Outdoor Living.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Report. 5 Table of Contents Cargo, Bags, and Outdoor Living.
Our DTC channel enables us to directly interact with our customers, more effectively deliver our brand experience, better understand consumer behavior and preferences, and offer exclusive products, content, and customization capabilities.
Additionally, we sell our full line of products at our retail stores. Our DTC channel enables us to directly interact with our customers, more effectively deliver our brand experience, better understand consumer behavior and preferences, and offer exclusive products, content, and customization capabilities.
Consistent with our focus on employee growth and development, we offer employees the opportunity to participate in educational activities and periodic trainings. Additionally, we employ a variety of recognition programs to recognize leadership and other employees who best exemplify our core values. We also encourage and provide opportunity for our employees to give back to the communities that support us.
Consistent with our focus on employee growth and development, we offer employees the opportunity to participate in educational activities and trainings. Additionally, we employ a variety of programs to recognize leadership and other employees who best exemplify our core values.
We match sourcing partnerships to deliver flexibility and scalability to support multiple product introductions and evolving channel strategies. Our global supply chain management team researches materials and equipment, qualifies raw material suppliers, vets potential manufacturing partners for advanced production and quality assurance processes, directs our production planning, approves and manages product purchasing plans, and oversees product transportation.
Our global supply chain management team researches materials and equipment, qualifies raw material suppliers, vets potential manufacturing partners for advanced production and quality assurance processes, directs our production planning, approves and manages product purchasing plans, and oversees product transportation.
Our corporate sales program offers customized products to corporate customers for a wide-range of events and activities, and in certain instances may also offer products to re-sell. Additionally, we sell our full line of products at our retail stores.
Additionally, we offer customized products with licensed marks and original artwork primarily to our DTC channel, through our corporate sales program, on our websites, and at select retail stores. Our corporate sales program offers customized products to corporate customers for a wide-range of events and activities, and in certain instances may also offer products to re-sell.
We believe there are meaningful growth opportunities in expanding into additional international markets, such as Asia, as many of the market dynamics and premium, performance-based consumer needs that we have successfully identified domestically are also valued in these markets. Product Design and Development We design and develop our products to provide superior performance and functionality in a variety of environments.
We believe there are meaningful growth opportunities in expanding into additional international markets, such as Asia, as many of the market dynamics and premium, performance-based consumer needs that we have successfully identified in the United States are also valued in these markets.
Once we approve the final design and specifications of a new product, we partner with global suppliers and specialized manufacturers to produce our products according to our exacting performance and quality standards.
Once we approve the final design and specifications of a new product, we partner with global suppliers and specialized manufacturers to produce our products according to our exacting performance and quality standards. Marketing We employ a wide range of marketing tactics and outlets to cultivate our relationships with experts, serious enthusiasts, and everyday consumers.
We aggressively pursue and defend our intellectual property rights to protect our distinctive brand, designs, and inventions. We have processes and procedures in place to identify, protect, and optimize our intellectual property assets on a global basis. Our experienced legal and brand protection teams initiate claims and litigation to protect our intellectual property assets.
We then seek intellectual property protection, including applying for patents and registering trademarks and copyrights. We aggressively pursue and defend our intellectual property rights to protect our distinctive brand, designs, and inventions. We have processes and procedures in place to identify, protect, and optimize our intellectual property assets on a global basis.
Our Drinkware product line also includes the Rambler Colsters, Rambler Lowball, Rambler Wine Tumbler, Rambler Stackable Pints, Rambler Mugs, Rambler Tumblers, Rambler Straw Mugs & Cups, Rambler Bottles, Rambler Jugs, and Yonder Water Bottles.
We also launched our Cookware category with our new Cast Iron Skillet. Our Drinkware product line also includes the Rambler Beverage Bucket, Rambler Wine Chiller, Rambler Cocktail Shaker, Rambler Colsters, Rambler Lowball, Rambler Wine Tumbler, Rambler Stackable Pints, Rambler Mugs, Rambler Tumblers, Rambler Straw Mugs and Cups, Rambler Bottles, Rambler Jugs, and Yonder Water Bottles.
For superior ice retention, we pressure-inject up to two inches of commercial-grade polyurethane foam into the walls and lid and utilize a freezer-quality gasket to seal the lid. Our hard cooler category includes YETI Tundra, YETI Roadie, YETI V Series hard coolers, YETI TANK ice bucket, and YETI Silo 6G water cooler.
For superior ice retention, we pressure-inject up to two inches of commercial-grade polyurethane foam into the walls and lid and utilize a freezer-quality gasket to seal the lid. In 2024, we expanded our hard cooler offerings with two new sizes within our Roadie cooler family.
We follow a disciplined, stage-gate product development process that is designed to provide consistent quality control while optimizing speed-to-market.
We use our purpose-built, state-of-the-art research and development centers to generate design prototypes and test performance. We follow a disciplined, stage-gate product development process that is designed to provide consistent quality control while optimizing speed-to-market.
As part of our commitment to premium positioning, we maintain supply discipline, consistently enforce our minimum advertised price ( “ MAP ” ) policy, and primarily sell through one-step distribution.
In 2024 and 2023, our DTC channel accounted for 59% and 60% of our net sales, respectively, and our wholesale channel accounted for 41% and 40% of our net sales, respectively. As part of our commitment to premium positioning, we maintain supply discipline, enforce our minimum advertised price (“MAP”) policy, and primarily sell through one-step distribution.
We use high-quality materials, as well as advanced design and manufacturing processes, to create premium products that redefine consumer expectations and deliver best-in-class product performance. We continue to expand our product line by introducing anchor products, followed by product expansions, such as additional sizes and colorways, and then offering corresponding accessories.
We expand our existing product families and enter new product categories by designing solutions grounded in consumer insights and relevant product knowledge. We use high-quality materials, as well as advanced design and manufacturing processes, to create premium products that redefine consumer expectations and deliver best-in-class product performance.
Our products are carefully designed and rigorously tested to maximize performance while minimizing complexity, allowing us to deliver highly functional products with simple, clean, and distinct designs. We expand our existing product families and enter new product categories by designing solutions grounded in consumer insights and relevant product knowledge.
Product Design and Development We design and develop our products to provide superior performance and functionality in a variety of environments. Our products are carefully designed and rigorously tested to maximize performance while minimizing complexity, allowing us to deliver highly functional products with simple, clean, and distinct designs.
Human Capital Resources At YETI, we have an unwavering commitment to outdoor and recreation communities, and we are relentless in our pursuit of building superior products for people to confidently enjoy life outdoors and beyond. We are proud of our unique company culture, where ideas, innovation, collaboration and personal development are essential.
We intend to continue to seek intellectual property protection for our new products and enforce our rights against those who infringe on these valuable assets. Human Capital Resources At YETI, we have an unwavering commitment to outdoor and recreation communities, and we are relentless in our pursuit of building superior products for people to confidently enjoy life outdoors and beyond.
We also offer related accessories, including locks, dry baskets, beverage holders, dividers, an ice scoop, and other add-ons, to enhance our products’ versatility. Soft Coolers. The Hopper is our line of soft coolers, which are designed to be leakproof and provide superior durability and ice retention compared to ordinary soft coolers.
The Hopper is our line of soft coolers, which are designed to be leakproof and provide superior durability and ice retention compared to ordinary soft coolers.
As a result, the markets we serve are broad as well as deep, including, for example, outdoor, housewares, home and garden, outdoor living, industrial, and commercial. While our product reach extends into numerous and varied markets, we currently primarily serve the North American outdoor recreation market.
As a result, the markets we serve are broad as well as deep, including, for example, outdoor, housewares, home and garden, outdoor living, industrial, and commercial. Our net sales in the United States accounted for approximately 81% of our net sales for 2024, while our international sales represented 19%.
The outdoor recreation products market is a large, growing, and diverse economic sector, which includes consumers of all genders, ages, ethnicities, and income levels. Additionally, we continue to expand internationally and grow our presence in Canada, Australia, New Zealand, Japan, and Europe, among others. We are expanding internationally by focusing on brand awareness, wholesale expansion, and our DTC channel.
We continue to expand internationally and grow our presence in Canada, Australia, New Zealand, Asia, and Europe, among other countries and regions. We are expanding internationally by focusing on brand awareness, wholesale expansion, and our DTC channel.
After these aspects of the process are complete, we seek intellectual property protection to the fullest extent possible, including applying for patents and for registration of trademarks and copyrights. We have a proactive online marketplace monitoring and seller/listing termination program to disrupt any online counterfeit offerings. In addition, we work to shut down websites selling counterfeit products through litigation.
For example, we have a proactive online marketplace monitoring and seller/listing termination program to disrupt online counterfeit offerings. Our experienced legal and brand protection teams initiate claims and litigation to protect our intellectual property assets. For example, we work to shut down websites selling counterfeit products through litigation.
As of December 30, 2023, we sold through a diverse base of approximately 4,500 retail partners in the United States, Canada, Australia, New Zealand, and Europe. No single customer accounted for 10% or more of our gross sales in 2023.
As of December 28, 2024, we sold through a diverse base of approximately 4,700 retail partners worldwide. No single customer accounted for 10% or more of our gross sales in 2024. We sell our products in our DTC channel to customers on our websites, through YETI Authorized on the Amazon Marketplace, as well as in our retail stores.
To ensure our continued success in bringing category-redefining products to market, our marketing and product development teams collaborate to identify consumer needs and wants to drive our robust product roadmap. We use our purpose-built, state-of-the-art research and development centers to generate design prototypes and test performance.
We continue to expand our product lines by introducing anchor products, followed by product expansions, such as additional sizes and colorways, and then offering corresponding accessories. To ensure our continued success in bringing category-redefining products to market, our marketing and product development teams collaborate to identify consumer needs and wants to drive our robust product roadmap.
Drinkware Most of our Drinkware products are made with durable, kitchen-grade, 18/8 stainless-steel, double-wall vacuum insulation, and our innovative No Sweat design. The result is high-performing drinkware products that keep beverages at their preferred temperature — whether hot or cold — for hours at a time without condensation.
During the fourth quarter of 2024, launched a limited release of the first Mystery Ranch-inspired Bozeman pack. Drinkware Most of our Drinkware products are made with durable, kitchen-grade, 18/8 stainless-steel, double-wall vacuum insulation, and our innovative No Sweat design.
None of our employees are currently covered by a collective bargaining agreement. We have no labor-related work stoppages and believe our relations with our employees are positive and stable. Diversity, Equity and Inclusion (“DE&I”) . We believe that an equitable, inclusive, and culturally diverse environment is imperative and key to our long-term growth.
Of these, approximately 88% of our workforce was located in the United States. None of our employees are currently covered by a collective bargaining agreement. We have no labor-related work stoppages and believe our relations with our employees are positive and stable. Compensation and Benefits . We strive to hire, develop and retain top talent.
We continue to support our voluntary, employee-led affinity groups that foster a diverse and inclusive workplace aligned with our core values, goals, and business practices. Compensation and Benefits . We strive to hire, develop and retain top talent.
We are committed to building an inclusive and diverse culture through a variety of initiatives on employee recruitment, employee training and development. We continue to support our voluntary, employee-led resource groups that foster a workplace aligned with our core values, goals, and business practices. As of December 28, 2024, we employed approximately 1,340 people worldwide, representing ten countries.
We believe our brand, culture, and employees are central to our success and our ability to attract, develop, motivate, and retain highly-skilled talent. As of December 30, 2023, we employed approximately 1,050 people worldwide, representing eight countries. Of these, approximately 88% of our workforce was located in the United States.
We are proud of our unique company culture, where ideas, innovation, collaboration and personal development are essential. We believe our brand, culture, and employees are central to our success and our ability to attract, develop, motivate, and retain highly-skilled talent.
Marketing We employ a wide range of marketing tactics and outlets to cultivate our relationships with experts, serious enthusiasts, and everyday consumers, including a combination of traditional, digital, social media, and grass-roots initiatives to support our premium brand, in addition to original short films and high-quality content on YETI websites.
We use a combination of traditional, digital, social media, and grass-roots initiatives, as well as original short films and high-quality content on YETI websites. Supply Chain and Quality Assurance We manage a global supply chain of highly qualified, third-party manufacturing and logistics partners to produce and distribute our products.
Removed
During 2022, we introduced Yonder Water Bottles, our first lightweight water bottle made of durable and safe BPA-free material. During 2023, we introduced several tableware products such as the Rambler beverage bucket, Rambler wine chiller, and Rambler cocktail shaker, and also expanded size offerings of various mugs, cups, and water bottles.
Added
Our hard cooler category includes YETI Tundra, YETI Roadie, YETI V Series hard coolers, YETI TANK ice bucket, and YETI Silo 6G water cooler. Related accessories include locks, dry baskets, beverage holders, and dividers. Soft Coolers.
Removed
In 2023 and 2022, our DTC channel accounted for 60% and 58% of our net sales, respectively, and our wholesale channel accounted for 40% and 42% of our net sales, respectively.
Added
During the first quarter of 2024, we acquired Mystery Ranch, LLC (“Mystery Ranch”), a designer and manufacturer of durable load-bearing backpacks, bags, and pack accessories. We integrated Mystery Ranch operations and products into our business to further expand our capabilities in the bags category.
Removed
We sell our products in our DTC channel to customers on YETI.com, country and region-specific YETI websites, and YETI Authorized on the Amazon Marketplace, as well as in our retail stores. Additionally, we offer customized products with licensed marks and original artwork through our corporate sales program, on YETI.com, certain country-specific YETI websites, and at select retail stores.
Added
The result is high-performing drinkware products that keep beverages at their preferred temperature—whether hot or cold—for hours at a time without condensation. During 2024, we expanded our Drinkware category with the launch of the Rambler French Press, Rambler Pitcher, Rambler Pour Over, Flask and Shot Glasses, as well as the launch of our Food Storage containers.
Removed
Supply Chain and Quality Assurance We manage a global supply chain of highly qualified, third-party manufacturing and logistics partners to produce and distribute our products. The primary raw materials and components used by our manufacturing partners include polyethylene, polyurethane foam, stainless-steel, polyester fabric, zippers, magnets, and other plastic materials and coatings.
Added
We do not directly source significant amounts of these raw materials and components. We do not own or operate any manufacturing facilities. We match sourcing partnerships to deliver flexibility and scalability to support multiple product introductions and evolving channel strategies.
Removed
In the future, we intend to continue to seek intellectual property protection for our new products and enforce our rights against those who infringe on these valuable assets. All product designs, specifications, and performance characteristics are developed and documented.
Removed
We are committed to building an inclusive and diverse culture through a variety of initiatives on employee recruitment, employee training and development. Our DE&I Council is composed of a group of employees representing different demographics, backgrounds, and teams that provides perspective and counsel on DE&I-related topics.
Removed
We provide up to four hours of paid time off to vote, as part of our participation in Time to Vote, and offer employees the chance to dedicate one full day of work to volunteering for an organization of their choice.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

87 edited+27 added−29 removed226 unchanged
Biggest changeThe global stop sale of the affected products and voluntary recalls has subjected and may continue to subject us to substantial costs, including, but not limited to, product recall remedies, legal and advisory fees, and recall-related logistics costs. These actions may also result in adverse publicity, harm our brand and divert management’s attention and resources from our operations.
Biggest changeFor example, in 2023 we initiated a global stop sale and voluntary recalls of our Hopper M30 Soft Cooler, Hopper M20 Soft Backpack Cooler, and SideKick Dry gear case. These actions subjected us to substantial costs, including product recall remedies, legal and advisory fees, and recall-related logistics costs.
Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws: • provide that our Board of Directors is classified into three classes of directors; • prohibit stockholders from taking action by written consent; • provide that stockholders may remove directors only for cause, and only with the approval of holders of at least 66 2/3% of our then outstanding common stock; • provide that the authorized number of directors may be changed only by resolution of the Board of Directors; • provide that all vacancies, including newly created directorships, may, except as otherwise required by law or as set forth in the Stockholders Agreement be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; 28 Table of Contents • provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner, and also specify requirements as to the form and content of a stockholder’s notice; • restrict the forum for certain litigation against us to Delaware or the federal district courts of the United States, as applicable; • do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election); • provide that special meetings of our stockholders may be called only by the Chairman of the Board of Directors, our CEO, or the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors; • provide that stockholders will be permitted to amend our Amended and Restated Bylaws only upon receiving at least 66 2/3% of the votes entitled to be cast by holders of all outstanding shares then entitled to vote generally in the election of directors, voting together as a single class; and • provide that certain provisions of our Amended and Restated Certificate of Incorporation may only be amended upon receiving at least 66 2/3% of the votes entitled to be cast by holders of all outstanding shares then entitled to vote, voting together as a single class.
Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws: • provide that our Board of Directors is classified into three classes of directors; • prohibit stockholders from taking action by written consent; • provide that stockholders may remove directors only for cause, and only with the approval of holders of at least 66 2/3% of our then outstanding common stock; • provide that the authorized number of directors may be changed only by resolution of the Board of Directors; • provide that all vacancies, including newly created directorships, may, except as otherwise required by law or as set forth in the Stockholders Agreement be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; 29 Table of Contents • provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner, and also specify requirements as to the form and content of a stockholder’s notice; • restrict the forum for certain litigation against us to Delaware or the federal district courts of the United States, as applicable; • do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election); • provide that special meetings of our stockholders may be called only by the Chairman of the Board of Directors, our CEO, or the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors; • provide that stockholders will be permitted to amend our Amended and Restated Bylaws only upon receiving at least 66 2/3% of the votes entitled to be cast by holders of all outstanding shares then entitled to vote generally in the election of directors, voting together as a single class; and • provide that certain provisions of our Amended and Restated Certificate of Incorporation may only be amended upon receiving at least 66 2/3% of the votes entitled to be cast by holders of all outstanding shares then entitled to vote, voting together as a single class.
Factors that could affect our ability to accurately forecast demand for our products include: (a) an increase or decrease in consumer demand for our products; (b) our failure to accurately forecast consumer acceptance for our new products; (c) product introductions by competitors; (d) unanticipated changes in general market conditions or other factors, which may result in cancellations of advance orders or a reduction or increase in the rate of reorders or at-once orders placed by retailers; (e) impacts on consumer demand due to unseasonable weather conditions; (f) weakening economic conditions or consumer confidence in future economic conditions or inflationary conditions resulting in rising prices, which could each reduce demand for discretionary items, such as our products; and (g) terrorism or acts of war, or the threat thereof, or political or labor instability or unrest, riots, or public health crises, which could adversely affect consumer confidence and spending or interrupt production and distribution of product and raw materials.
Factors that could affect our ability to accurately forecast demand for our products include: (a) an increase or decrease in consumer demand for our products; (b) our failure to accurately forecast consumer acceptance for our new products; (c) product introductions by competitors; (d) unanticipated changes in general market conditions or other factors, which may result in cancellations of advance orders or a reduction or increase in the rate of reorders or at-once orders placed by retailers; (e) impacts on consumer demand due to unseasonable weather conditions; (f) weakening economic conditions or consumer confidence in future economic conditions, as well as inflationary conditions or tariffs resulting in rising prices, which could each reduce demand for discretionary items, such as our products; and (g) terrorism or acts of war, or the threat thereof, or political or labor instability or unrest, riots, or public health crises, which could adversely affect consumer confidence and spending or interrupt production and distribution of product and raw materials.
Our ability to open new retail stores in a timely manner and operate them profitably depends on a number of factors, many of which are beyond our control, including: • our ability to manage the financial and operational aspects of our retail growth strategy, including making appropriate investments in our software systems, information technology, and operational infrastructure; • our ability to identify suitable locations, including our ability to gather and assess demographic and marketing data to accurately determine customer demand for our products in the locations we select; • our ability to negotiate favorable lease agreements; • our ability to properly assess the potential profitability and payback period of potential new retail store locations; • the availability of financing on favorable terms; • our ability to secure required governmental permits and approvals and our ability to effectively comply with state and local employment and labor laws, rules, and regulations; • our ability to hire and train skilled store operating personnel, especially management personnel; • the availability of construction materials and labor and the absence of significant construction delays or cost overruns; • our ability to provide a satisfactory mix of merchandise that is responsive to the needs of our customers living in the areas where new retail stores are established; • our ability to establish a supplier and distribution network able to supply new retail stores with inventory in a timely manner; • our competitors, or our retail partners, building or leasing stores near our retail stores or in locations we have identified as targets for a new retail store; • customer demand for our products; and • general economic and business conditions affecting consumer confidence and spending and the overall strength of our business.
Our ability to open new retail stores in a timely manner and operate them profitably depends on a number of factors, many of which are beyond our control, including: • our ability to manage the financial and operational aspects of our retail growth strategy, including making appropriate investments in our software systems, information technology, and operational infrastructure; • our ability to identify suitable locations, including our ability to gather and assess demographic and marketing data to accurately determine customer demand for our products in the locations we select; • our ability to negotiate favorable lease agreements; • our ability to properly assess the potential profitability and payback period of potential new retail store locations; • the availability of financing on favorable terms; • our ability to secure required governmental permits and approvals and our ability to effectively comply with state and local employment and labor laws, rules, and regulations; • our ability to hire and train skilled store operating personnel, especially management personnel; • the availability of construction materials and labor and the absence of significant construction delays or cost overruns; 19 Table of Contents • our ability to provide a satisfactory mix of merchandise that is responsive to the needs of our customers living in the areas where new retail stores are established; • our ability to establish a supplier and distribution network able to supply new retail stores with inventory in a timely manner; • our competitors, or our retail partners, building or leasing stores near our retail stores or in locations we have identified as targets for a new retail store; • customer demand for our products; and • general economic and business conditions affecting consumer confidence and spending and the overall strength of our business.
Our failure to successfully respond to these risks might adversely affect sales in our DTC channel, as well as damage our reputation and brand. We currently have a limited number of country and region-specific YETI websites and have plans to expand our e-commerce platform to others.
Our failure to successfully respond to these risks might adversely affect sales in our DTC channel, as well as damage our reputation and brand. We currently have a number of country- and region-specific YETI websites and have plans to expand our e-commerce platform to others.
Alternatively, if a court were to find either our state choice of forum provision or our federal choice of forum provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition. 29 Table of Contents YETI Holdings, Inc. is a holding company with no operations of its own and, as such, it depends on its subsidiaries for cash to fund its operations and expenses, including future dividend payments, if any.
Alternatively, if a court were to find either our state choice of forum provision or our federal choice of forum provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition. 30 Table of Contents YETI Holdings, Inc. is a holding company with no operations of its own and, as such, it depends on its subsidiaries for cash to fund its operations and expenses, including future dividend payments, if any.
Our business could be harmed if we fail to execute our internal plans to transition our supply chain and certain other business processes to a global scale. We continually assess, and re-engineer as needed, our supply chain management and business processes to support our expanding scale.
Our business could be harmed if we fail to execute our internal plans to transition our supply chain and certain other business processes to a global scale. We continually assess, and re-engineer as needed, our supply chain management, technology, and business processes to support our expanding scale.
Our expansion to a global scale requires significant investment of capital and human resources, the adaptation and evolution of many business processes, and the attention of many managers and other employees who would otherwise be focused on other aspects of our business.
Our expansion to a global scale requires significant investment of capital and human resources, the adaptation and evolution of many business processes and technology, and the attention of many managers and other employees who would otherwise be focused on other aspects of our business.
Failure to comply with these covenants and certain other provisions of the Credit Facility, or the occurrence of a change of control, could result in an event of default and an acceleration of our obligations under the Credit Facility or other indebtedness that we may incur in the future. 26 Table of Contents If such an event of default and acceleration of our obligations occurs, the lenders under the Credit Facility would have the right to proceed against the collateral we granted to them to secure such indebtedness, which consists of substantially all of our assets.
Failure to comply with these covenants and certain other provisions of the Credit Facility, or the occurrence of a change of control, could result in an event of default and an acceleration of our obligations under the Credit Facility or other indebtedness that we may incur in the future. 27 Table of Contents If such an event of default and acceleration of our obligations occurs, the lenders under the Credit Facility would have the right to proceed against the collateral we granted to them to secure such indebtedness, which consists of substantially all of our assets.
If a material number of our retail partners were not able to meet their payment obligations, our results of operations could be harmed. 27 Table of Contents Risks Related to Ownership of Our Common Stock If we are unable to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our reported financial information and the market price of our common stock may be negatively affected.
If a material number of our retail partners were not able to meet their payment obligations, our results of operations could be harmed. 28 Table of Contents Risks Related to Ownership of Our Common Stock If we are unable to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our reported financial information and the market price of our common stock may be negatively affected.
We may also be the target of short sellers who engage in negative publicity campaigns that may use selective information that may be presented out of context or that may misrepresent facts and circumstances. Any of the foregoing could adversely affect our business and operating results. 30 Table of Contents Item 1B. Unresolved Staff Comments None.
We may also be the target of short sellers who engage in negative publicity campaigns that may use selective information that may be presented out of context or that may misrepresent facts and circumstances. Any of the foregoing could adversely affect our business and operating results. 31 Table of Contents Item 1B. Unresolved Staff Comments None.
The pursuit of potential acquisitions may divert the attention of management and cause us to incur various costs and expenses in identifying, investigating, and pursuing suitable acquisitions, whether or not they are completed. We may not be able to successfully integrate acquired personnel, operations, and technologies, or effectively manage the combined business following the acquisition.
The pursuit of potential acquisitions may divert the attention of management and cause us to incur various costs and expenses in identifying, investigating, and pursuing suitable acquisitions, whether or not they are completed. We may not be able to successfully integrate acquired personnel, operations, intellectual property, and technologies, or effectively manage the combined business following the acquisition.
If we are unable to successfully mitigate a significant portion of these product cost increases or fluctuations, our results of operations could be harmed. Many of our products are manufactured by third parties outside of the United States, and our business may be harmed by legal, regulatory, economic, political and public health risks associated with international trade and those markets.
If we are unable to successfully mitigate a significant portion of these product cost increases or fluctuations, our results of operations could be harmed. 16 Table of Contents Many of our products are manufactured by third parties outside of the United States, and our business may be harmed by legal, regulatory, economic, political and public health risks associated with international trade and those markets.
The growth of our business will depend, in part, on our ability to continue to expand our retail partner and customer bases in the United States, as well as in international markets, including Canada, Australia, Europe, and Japan.
The growth of our business will depend, in part, on our ability to continue to expand our retail partner and customer bases in the United States, as well as in international markets, including Canada, Australia, Europe, and Asia.
In addition, any payments we are required to make, and any injunction we are required to comply with as a result of such infringement, could harm our reputation and financial results. 14 Table of Contents We rely on third-party contract manufacturers, and problems with, or loss of, our suppliers or an inability to obtain raw materials could harm our business and results of operations.
In addition, any payments we are required to make, and any injunction we are required to comply with as a result of such infringement, could harm our reputation and financial results. We rely on third-party contract manufacturers, and problems with, or loss of, our suppliers or an inability to obtain raw materials could harm our business and results of operations.
Any failure to comply could significantly harm our brand, reputation, business, financial condition and results of operations. Our plans for international expansion may not be successful; our limited operating experience and limited brand recognition in new markets may make it more difficult to execute our expansion strategy and cause our business and growth to suffer.
Any failure to comply could significantly harm our brand, reputation, business, financial condition and results of operations. 20 Table of Contents Our plans for international expansion may not be successful; our limited operating experience and limited brand recognition in new markets may make it more difficult to execute our expansion strategy and cause our business and growth to suffer.
Accordingly, if we are unable to successfully expand internationally or manage the complexity of our global operations, we may not achieve the expected benefits of this expansion and our financial condition and results of operations could be harmed. 21 Table of Contents Our financial results and future growth have been, and could in the future be, harmed by currency exchange rate fluctuations.
Accordingly, if we are unable to successfully expand internationally or manage the complexity of our global operations, we may not achieve the expected benefits of this expansion and our financial condition and results of operations could be harmed. Our financial results and future growth have been, and could in the future be, harmed by currency exchange rate fluctuations.
Failure to procure our products from our third-party contract manufacturers and deliver merchandise to our retail partners and DTC channel in a timely, effective, and economically viable manner could reduce our sales and gross margins, damage our brand, and harm our business. Our business is subject to the risk of manufacturer concentrations.
Failure to procure our products from our third-party contract manufacturers and deliver merchandise to our retail partners and DTC channel in a timely, effective, and economically viable manner could reduce our sales and gross margins, damage our brand, and harm our business. 15 Table of Contents Our business is subject to the risk of manufacturer concentrations.
We have, and may in the future, acquire or invest in businesses, products, or technologies that we believe could complement or expand our business, enhance our capabilities, or otherwise offer growth opportunities.
We have, and may in the future, acquire or invest in businesses, products, intellectual property, or technologies that we believe could complement or expand our business, enhance our capabilities, or otherwise offer growth opportunities.
Continued expansion into markets outside the United States, including Canada, Australia, Europe and Japan, is one of our key long-term strategies for the future growth of our business.
Continued expansion into markets outside the United States, including Canada, Australia, Europe and Asia, is one of our key long-term strategies for the future growth of our business.
Global events may also impact the import of our products. For example, in response to such global events, certain governments have, and may again in the future, implement sanctions, seizures of assets, or export control measures, which could result in higher costs, inventory shortages, or both.
Global events may also impact the import of our products. For example, in response to ongoing geopolitical conflicts, certain governments have, and may again in the future, implement sanctions, seizures of assets, or export control measures, which could result in higher costs, inventory shortages, or both.
Our failure to maintain these relationships with our retail partners or financial difficulties experienced by these retail partners could harm our business. These retail partners may decide to emphasize products from our competitors, to redeploy their retail floor space to other product categories, or to take other actions that reduce their purchases of our products.
Our failure to maintain these relationships with our retail partners or financial difficulties experienced by these retail partners could materially harm our business. 18 Table of Contents These retail partners may decide to emphasize products from our competitors, to redeploy their retail floor space to other product categories, or to take other actions that reduce their purchases of our products.
For example, the recent conflict in the Red Sea has disrupted shipping routes, which has caused us to begin experiencing shipping delays and increased freight costs. Although such effects have not materially impacted our business to date, such conditions could worsen.
For example, the ongoing conflict in the Red Sea has disrupted shipping routes, which has caused us to continue experiencing shipping delays and increased freight costs. Although such effects have not materially impacted our business to date, such conditions could worsen.
As a result, foreign currency exchange rate fluctuations may adversely impact our results of operations. We may become involved in legal or regulatory proceedings and audits.
As a result, foreign currency exchange rate fluctuations may adversely impact our results of operations. 21 Table of Contents We may become involved in legal or regulatory proceedings and audits.
Our annual and quarterly results of operations may also fluctuate significantly as a result of a variety of other factors, including, among other things, the timing of the introduction of and advertising for our new products and those of our competitors and changes in our product mix.
Our annual and quarterly results of operations may also fluctuate significantly as a result of a variety of other factors, including, among other things, the timing of the introduction of and advertising for our new products and those of our competitors and changes in our product mix. Variations in weather conditions may also harm our quarterly results of operations.
If our plans to increase sales through our DTC e-commerce channel are not successful, our business and results of operations could be harmed. For 2023, our DTC channel accounted for 60% of our net sales, and our sales through the Amazon Marketplace represented approximately 15% of our net sales.
If our plans to increase sales through our DTC e-commerce channel are not successful, our business and results of operations could be harmed. For 2024, our DTC channel accounted for 59% of our net sales, and our sales through the Amazon Marketplace represented approximately 15% of our net sales.
In these markets, we may face challenges that are different from those we currently encounter, including competitive, merchandising, distribution, hiring, and other difficulties. We may also encounter difficulties in attracting customers due to a lack of consumer familiarity with or acceptance of our brand, or a resistance to paying for premium products, particularly in international markets.
In these international markets, we face challenges that are at times different from those encounter in the United States, including competitive, merchandising, distribution, hiring, and other difficulties. We may also encounter difficulties in attracting customers due to a lack of consumer familiarity with or acceptance of our brand, or a resistance to paying for premium products, particularly in international markets.
If additional tariffs or other restrictions are placed on foreign imports or any related counter-measures are taken by other countries, our business and results of operations could be harmed.
As current tariffs are implemented, or if additional or increased tariffs or other restrictions are placed on foreign imports or any related counter-measures are taken by other countries, our business and results of operations could be harmed .
Our reliance on only two geographical locations for our domestic distribution centers makes us more vulnerable to natural disasters, weather-related disruptions, accidents, system failures, public health emergencies, or other unforeseen events that could delay or impair our ability to fulfill retailer orders and/or ship merchandise purchased on our website, which could harm our sales.
Our reliance on a limited number of geographical locations for our distribution centers makes us more vulnerable to natural disasters, weather-related disruptions, accidents, system failures, public health emergencies, or other unforeseen events that could delay or impair our ability to fulfill retailer orders and/or ship merchandise purchased on our website, which could harm our sales.
As a result, our manufacturers could produce similar products for our competitors, some of which could potentially purchase products in significantly greater volume. Further, while certain of our long-term contracts stipulate contractual exclusivity, those manufacturers could choose to breach our agreements and work with our competitors.
As a result, our manufacturers could produce similar products for our competitors, some of which could potentially purchase products in significantly greater volume, which could impair or eliminate our access to manufacturing capacity. Further, while certain of our long-term contracts stipulate contractual exclusivity, those manufacturers could choose to breach our agreements and work with our competitors.
Furthermore, the occurrence of any material defects in our products could expose us to liability for warranty claims in excess of our current reserves, and if our warranty reserves are inadequate to cover future warranty claims on our products, our financial condition and operating results may be harmed.
In addition to potential recall impacts, the occurrence of any material defects in our products could expose us to liability for warranty claims, which could be in excess of our current reserves, and if our warranty reserves are inadequate to cover future warranty claims on our products, our financial condition and operating results may be harmed.
In addition, if we underestimate the demand for our products, our manufacturers may not be able to produce products to meet our customer requirements, and this could result in delays in the shipment of our products and our ability to recognize revenue, lost sales, as well as damage to our reputation and retailer and distributor relationships.
In addition, if we underestimate the demand for our products, our manufacturers may not be able to produce products to meet our customer requirements, and this could result in delays in the shipment of our products, lower sales, higher costs, as well as damage to our reputation and retailer and distributor relationships.
We are not obligated to repurchase a specified number or dollar of shares, and the timing, manner, price, and actual amount of share repurchases will depend on a variety of factors, including stock price, market conditions, other capital allocation needs and opportunities, and corporate and regulatory considerations.
The Share Repurchase Program may be suspended or discontinued at any time. We are not obligated to repurchase a specified number or dollar of shares, and the timing, manner, price, and actual amount of share repurchases will depend on a variety of factors, including stock price, market conditions, other capital allocation needs and opportunities, and corporate and regulatory considerations.
We are exposed to risk due to our concentration of business activity with certain third-party contract manufacturers of our products. For coolers & equipment products, our two largest manufacturers comprised approximately 44% of our production volume during 2023. For drinkware, our two largest manufacturers comprised approximately 73% of our production volume during 2023.
We are exposed to risk due to our concentration of business activity with certain third-party contract manufacturers of our products. For coolers & equipment products, our two largest manufacturers comprised approximately 36% of our production volume during 2024. For drinkware products, our two largest manufacturers comprised approximately 74% of our production volume during 2024.
In such a case, there can be no assurance that we will be able to shift manufacturing and supply agreements to non-impacted countries, including the United States, to reduce the effects of the tariffs.
Tariffs have the potential to significantly raise the cost of our products. In such a case, there can be no assurance that we will be able to shift manufacturing and supply agreements to non-impacted countries, including the United States, to reduce the effects of the tariffs.
As of December 30, 2023, we had $82.3 million principal amount of indebtedness outstanding under the Credit Facility (as defined in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations- Business Overview” of this Report).
As of December 28, 2024, we had $78.0 million principal amount of indebtedness outstanding under the Credit Facility (as defined in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations- Business Overview” of this Report).
Our failure to accomplish or accurately track and report on these goals on a timely basis, or at all, could adversely affect our reputation, financial performance and growth, and expose us to increased scrutiny from the investment community as well as enforcement authorities. In addition, we could be criticized for the scope of our ESG initiatives or goals.
Our failure to accomplish or accurately track and report on these goals on a timely basis, or at all, could adversely affect our reputation, financial performance and growth, and expose us to increased scrutiny from the investment community as well as enforcement authorities.
Stockholder activists may also seek to involve themselves in the governance, strategic direction and operations of our business through stockholder proposals, which could create perceived uncertainties or concerns as to our future operating environment, legislative environment, strategy, direction, or leadership.
Stockholder activists may also seek to involve themselves in the governance, strategic direction and operations of our business in ways that do not align with our business strategies, which could create perceived uncertainties or concerns as to our future operating environment, legislative environment, strategy, direction, or leadership.
We believe that our future growth depends not only on continuing to reach our current core demographic, but also continuing to broaden our retail partner and customer base.
We believe that our future growth depends not only on continuing to reach our existing retail partners and customers, but also continuing to broaden our retail partner and customer base.
Global political conditions, threatened or actual acts of war or terrorism, instability or other disruptions in oil producing regions, such as in the Middle East, South America and Europe, and trade, economic or other disagreements involving oil producing nations, can significantly affect, and recently have significantly affected the price of oil.
Global political conditions, threatened or actual acts of war or terrorism, instability or other disruptions in areas such as the Middle East, South America and Europe, and trade, economic or other disagreements among nations, can significantly affect, and recently have significantly affected transportation times and costs.
The imposition of taxes, duties and quotas, the withdrawal from or material modification to trade agreements, and/or if CBP detains shipments of our goods pursuant to a withhold release order could have a material adverse effect on our business, results of operations and financial condition. 17 Table of Contents Tariffs have the potential to significantly raise the cost of our products, particularly our Drinkware.
The imposition of taxes, duties and quotas, the withdrawal from or material modification to trade agreements, and/or if CBP detains shipments of our goods pursuant to a withhold release order could have a material adverse effect on our business, results of operations and financial condition.
We may be the target of stockholder activism, an unsolicited takeover proposal or a proxy contest or short sellers, which could negatively impact our business. In recent years, there has been an increase in proxy contests, unsolicited takeovers and other forms of stockholder activism.
We may be the target of stockholder activism, an unsolicited takeover proposal, a proxy contest, or short sellers, which could negatively impact our business. In recent years, there has been an increase in various forms of stockholder activism, including through direct engagement and letter-writing campaigns, shareholder proposals, proxy contests, and unsolicited takeovers.
Although such effects have not materially impacted our business to date, such conditions could worsen. 15 Table of Contents In order to meet demand for a product, we have chosen in the past, and may choose in the future, to arrange for additional quantities of the product, if available, to be delivered through air freight, which is significantly more expensive than standard shipping by sea and, consequently, adversely impacts our gross margins.
In order to meet demand for a product, we have chosen in the past, and may choose in the future, to arrange for additional quantities of the product, if available, to be delivered through air freight, which is significantly more expensive than standard shipping by sea and, consequently, adversely impacts our gross margins.
The capacity of our manufacturers to produce our products is also dependent upon the availability of raw materials. Our manufacturers may not be able to obtain sufficient supply of raw materials, which could result in delays in deliveries of our products by our manufacturers or increased costs.
Our manufacturers may not be able to obtain sufficient supply of raw materials, which could result in delays in deliveries of our products by our manufacturers or increased costs.
We may incur additional costs and operational challenges in complying with these laws, and differences in these laws may cause us to operate our business differently, and less effectively, in different territories.
We may incur additional costs and operational challenges in complying with these laws, and differences in these laws may cause us to operate our business differently, and less effectively, in different territories. If so, we may incur additional costs and may not fully realize the investment in our international expansion.
The price and availability of key components used to manufacture our products, including polyethylene, polyurethane foam, stainless-steel, polyester fabric, zippers, and other plastic materials and coatings, as well as manufacturing equipment and molds, may fluctuate significantly. In addition, the cost of labor at our third-party contract manufacturers and third-party logistics providers could increase significantly.
Fluctuations in the cost and availability of raw materials, equipment, labor, and transportation could cause manufacturing delays or increase our costs. The price and availability of key components used to manufacture our products, including polyethylene, polyurethane foam, stainless-steel, polyester fabric, zippers, and other plastic materials and coatings, as well as manufacturing equipment and molds, may fluctuate significantly.
Any of these events or claims could harm our reputation, business, financial condition and results of operations. We also face exposure to product liability claims and unusual or significant litigation in the event that one of our products is alleged to have resulted in bodily injury, property damage, or other adverse effects.
We also face exposure to product liability claims and unusual or significant litigation in the event that one of our products is alleged to have resulted in personal injury, property damage, or other adverse effects.
If our suppliers, manufacturers, or retail partners fail to comply with applicable laws, regulations, safety codes, employment practices, human rights standards, quality standards, environmental standards, production practices, or other obligations, norms, or ethical standards, our reputation and brand image could be harmed, and we could be exposed to litigation and additional costs that would harm our business, reputation, and results of operations. 20 Table of Contents We are subject to payment-related risks that may result in higher operating costs or the inability to process payments, either of which could harm our business, financial condition and results of operations.
If our suppliers, manufacturers, or retail partners fail to comply with applicable laws, regulations, safety codes, employment practices, human rights standards, quality standards, environmental standards, production practices, or other obligations, norms, or ethical standards, our reputation and brand image could be harmed, and we could be exposed to litigation and additional costs that would harm our business, reputation, and results of operations.
If so, we may incur additional costs and may not fully realize the investment in our international expansion. 19 Table of Contents If we do not successfully implement our retail store expansion plans, our growth and profitability could be harmed. We have and may continue to expand our existing DTC channel by opening new retail stores.
If we do not successfully implement our retail store expansion plans, our growth and profitability could be harmed. We have and may continue to expand our existing DTC channel by opening new retail stores.
As a result, we could experience cancellations of orders, refusals to accept deliveries, or reductions in our prices and margins, any of which could harm our financial performance, reputation, and results of operations.
As a result, we could experience cancellations of orders, refusals to accept deliveries, or reductions in our prices and margins, any of which could harm our financial performance, reputation, and results of operations. In addition, except in some of the situations where we have a supply contract, our arrangements with our manufacturers are not exclusive.
Pursuant to the new share repurchase program authorized by our Board of Directors in February 2024, we are authorized to repurchase up to $300 million of outstanding shares of our common stock through various methods, including, but not limited to, open market, privately negotiated, or accelerated share repurchase transactions. Such program may be suspended or discontinued at any time.
In February 2024, our Board of Directors authorized the Company to repurchase up to $300.0 million of outstanding shares of our common stock through various methods, including, but not limited to, open market, privately negotiated, or accelerated share repurchase transactions (the “Share Repurchase Program”).
Our aspirations, disclosures, and actions related to environmental, social and governance (“ESG”) matters expose us to risks that could adversely affect our reputation and performance. There is an increased focus from investors, customers, associates, business partners and other stakeholders concerning ESG matters.
Our aspirations, disclosures, and actions related to ESG matters expose us to risks that could adversely affect our reputation and performance. The focus and expectations of investors, customers, associates, business partners and other stakeholders concerning ESG matters continue to evolve rapidly.
We are continuing to evaluate the impact of these tax developments as new guidance and regulations are published. A significant change in U.S. tax law, or that of other countries where we operate or have a presence, may materially and adversely impact our income tax liability, provision for income taxes and effective tax rate.
A significant change in U.S. tax law, or that of other countries where we operate or have a presence, may materially and adversely impact our income tax liability, provision for income taxes and effective tax rate. We regularly assess all of these matters to determine the adequacy of our income tax provision, which is subject to significant judgment.
Our selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others. This may result in a lack of consistent or meaningful comparative data from period to period or between YETI and other companies in the same industry.
This may result in a lack of consistent or meaningful comparative data from period to period or between YETI and other companies in the same industry.
If these retail partners cease to promote or carry our current products or choose not to promote or carry new products that we develop, our brand as well as our results of operations and financial condition could be harmed. We sell a significant amount of our products through our wholesale channel, consisting of national, regional, and independent retail partners.
If these retail partners cease to promote or carry our current products, choose not to promote or carry new products that we develop, or we need to raise our discounts to such retail partners to remain competitive, our brand as well as our results of operations and financial condition could be harmed.
The markets in which we compete are highly competitive, with low barriers to entry. Numerous other brands and retailers offer a wide variety of products that compete with our coolers, drinkware, and other products, including our bags, cargo, and outdoor lifestyle products and accessories.
The markets in which we compete are highly competitive, with low barriers to entry. Numerous other brands and retailers offer a wide variety of products that compete with our products, including coolers, drinkware, bags, and cargo. Competition in these product markets is based on a number of factors, including product quality, performance, durability, styling, brand image and recognition, and price.
Some of our competitors may aggressively discount their products or offer other attractive sales terms in order to gain market share, which could result in pricing pressures, reduced profit margins, or lost market share.
Some of our competitors may aggressively discount their products or offer other attractive sales terms in order to gain market share, which could result in pricing pressures, reduced profit margins, or lost market share. For example, if our retail partners were to demand higher discounts, we may be forced to lower our gross margins on products sold through such partners.
Similarly, we are exposed to gains and losses resulting from currency exchange rate fluctuations on transactions generated by our foreign subsidiaries in currencies other than their local currencies. In addition, the business of our independent manufacturers may also be disrupted by currency exchange rate fluctuations by making their purchases of raw materials more expensive and more difficult to finance.
In addition, the business of our independent manufacturers may also be disrupted by currency exchange rate fluctuations by making their purchases of raw materials more expensive and more difficult to finance.
We could also lose revenue if our consumers change brands or our customers move business from us because we have not complied with their preferences and investors may choose not to invest in our securities if we do not comply with their business expectations. 18 Table of Contents Significant changes in weather patterns, including an increase in the frequency, severity and duration of extreme weather conditions and natural disasters, could also directly impact our business.
We could also lose revenue if our consumers change brands or our customers move business from us because we have not complied with their preferences and investors may choose not to invest in our securities if we do not comply with their business expectations.
We share some of this information with certain third parties who assist us with business matters. Moreover, the success of our operations depends upon the secure transmission of confidential, proprietary or otherwise sensitive data, including personal information, over networks.
Moreover, the success of our operations depends upon the secure transmission of confidential, proprietary or otherwise sensitive data, including personal information, over networks.
In addition, our manufacturers may raise prices in the future, which would increase our costs and harm our margins. Any of these risks could harm our ability to deliver our products on time, or at all, damage our reputation and our relationships with our retail partners and customers, and increase our product costs thereby reducing our margins.
Any of these risks could harm our ability to deliver our products on time, or at all, damage our reputation and our relationships with our retail partners and customers, and increase our product costs thereby reducing our margins. 14 Table of Contents The capacity of our manufacturers to produce our products is also dependent upon the availability of raw materials.
As we expand our business, we will need significant cash from operations to purchase inventory, increase our product development, expand our manufacturer and supplier relationships, pay personnel, pay for the increased costs associated with operating as a public company, expand internationally, and further invest in our sales and marketing efforts.
We primarily rely on cash flow generated from our sales to fund our current operations and our growth initiatives. As we expand our business, we will need significant cash from operations to purchase inventory, increase our product development, expand our manufacturer and supplier relationships, pay personnel, expand internationally, and further invest in our sales and marketing efforts.
If we are unable to attract new customers, or fail to do so in a cost-effective manner, our growth could be slower than we expect and our business could be harmed. If we are unable to successfully design, develop and market new products, our business may be harmed.
If we are unable to attract new customers, fail to attract new customers in a cost-effective manner, or fail to drive awareness of our full product portfolio among new and existing customers, our growth could be slower than we expect and our business could be harmed.
However, we cannot control all of the factors that might affect the timely and effective procurement of our products from our third-party contract manufacturers and the delivery of our products to our retail partners and customers. Our third-party contract manufacturers ship most of our products to our distribution centers in Memphis, Tennessee, and Salt Lake City, Utah.
Our business depends on our ability to source and distribute products in a timely manner. However, we cannot control all of the factors that might affect the timely and effective procurement of our products from our third-party contract manufacturers and the delivery of our products to our retail partners and customers.
Unauthorized use or invalidation of our patents, trademarks, copyrights, trade dress, trade secrets, or other intellectual property or proprietary rights may cause significant damage to our brand and harm our results of operations. In addition, except in some of the situations where we have a supply contract, our arrangements with our manufacturers are not exclusive.
Unauthorized use or invalidation of our patents, trademarks, copyrights, trade dress, trade secrets, or other intellectual property or proprietary rights may cause significant damage to our brand and harm our results of operations.
If our retail partners reduce or terminate those activities, we may experience reduced sales of our products, resulting in lower gross margins, which would harm our results of operations. Our relationships with these retail partners are important to the authenticity of our brand and the marketing programs we continue to deploy.
If our retail partners reduce or terminate those activities, we may experience reduced sales of our products, resulting in lower gross margins, which would harm our results of operations. In addition, if these retail partners were to demand higher discounts on our products, we may experience lower gross margins on products sold to such partners.
Such incidents could be caused by the covert introduction of malware to our information technology systems and the use of techniques or processes that change frequently. The intrusions may be disguised, difficult to detect, or designed to remain dormant until a triggering event, and may continue undetected for an extended period of time.
The intrusions may be disguised, difficult to detect, or designed to remain dormant until a triggering event, and may continue undetected for an extended period of time.
The market for products in the outdoor and recreation products industry is characterized by new product introductions, frequent enhancements to existing products, and changing customer demands, needs and preferences. To maintain and increase sales, we must continue to introduce new products and improve or enhance our existing products on a timely basis to respond to new and evolving consumer preferences.
To maintain and increase sales, we must continue to introduce new products and improve or enhance our existing products on a timely basis to respond to new and evolving consumer preferences.
Complying with these evolving obligations is costly, and any failure to comply could give rise to unwanted media attention and other negative publicity, damage our customer and consumer relationships and reputation, and result in lost sales, fines, or lawsuits, and may harm our business and results of operations. 25 Table of Contents Risks Related to Our Financial Condition, Accounting and Tax Matters We depend on cash generated from our operations to support our growth, and we may need to raise additional capital, which may not be available on terms acceptable to us or at all.
The occurrence of any of these risks could have an adverse effect on our business, reputation and results of operations. 26 Table of Contents Risks Related to Our Financial Condition, Accounting and Tax Matters We depend on cash generated from our operations to support our growth, and we may need to raise additional capital, which may not be available on terms acceptable to us or at all.
Although we extensively and rigorously test new and enhanced products, there can be no assurance we will be able to detect, prevent, or fix all defects. Under certain circumstances, the CPSC, and other relevant global regulatory authorities, could require us to repurchase or recall one or more of our products.
Although we extensively and rigorously test new and enhanced products, there can be no assurance we will be able to detect, prevent, or fix all defects.
In addition, our customers have become increasingly technologically savvy and expect a seamless omni-channel experience regardless of whether they are shopping in stores or online. Innovation by existing or new competitors could alter the competitive landscape by improving the customer experience and heightening customer expectations or by transforming other aspects of their business through new technologies.
In addition, our customers have become increasingly technologically savvy and expect a seamless omni-channel experience regardless of whether they are shopping in stores or online.
If such losses are greater than expected or if we lose distribution due to a price increase, our business, financial condition and results of operations may be materially and adversely affected. 16 Table of Contents Fluctuations in the cost and availability of raw materials, equipment, labor, and transportation could cause manufacturing delays or increase our costs.
Furthermore, price increases generally result in volume losses, as consumers purchase fewer units. If such losses are greater than expected or if we lose distribution due to a price increase, our business, financial condition and results of operations may be materially and adversely affected.
In some instances, efforts to correct vulnerabilities or prevent incidents have in the past reduced, and may in the future reduce, the functionality or performance of our information technology, which could negatively impact our business. Cybersecurity incidents can also be caused by ransomware, distributed denial-of-service attacks, worms, and other malicious software programs or other attacks.
Our use of AI and our use of products and services from third parties that use AI, may increase the risks of such incidents. In some instances, efforts to correct vulnerabilities or prevent incidents have in the past reduced, and may in the future reduce, the functionality or performance of our information technology, which could negatively impact our business.
If we fail to timely and effectively obtain shipments of products from our manufacturers and deliver products to our retail partners and customers, our business and results of operations could be harmed. Our business depends on our ability to source and distribute products in a timely manner.
Our competitors could enter into restrictive or exclusive arrangements with our manufacturers that could impair or eliminate our access to manufacturing capacity or supplies. If we fail to timely and effectively obtain shipments of products from our manufacturers and deliver products to our retail partners and customers, our business and results of operations could be harmed.
Our corporate offices, one of our distribution centers, and one of our data center facilities are located in Texas, a state that frequently experiences floods and storms, and our third-party contract manufacturers ship most of our products to our distribution centers in Memphis, Tennessee, and Salt Lake City, Utah, which are susceptible to floods, earthquakes and wildfires.
For instance, several of our office and building spaces are located in Texas, a state that frequently experiences floods and storms, and our domestic distribution centers are located in Memphis, Tennessee, Salt Lake City, Utah, and Sumner, Washington, which are susceptible to natural disasters, such as floods, earthquakes and wildfires.
In 2023, our wholesale channel accounted for 40% of our net sales. No single retail partner accounted for 10% or more of our gross sales in 2023.
We sell a significant amount of our products through our wholesale channel, consisting of national, regional, and independent retail partners. In 2024, our wholesale channel accounted for 41% of our net sales. No single retail partner accounted for 10% or more of our gross sales in 2024.
If such a campaign or proposal were to be made against us, we would likely incur substantial costs, such as legal fees and expenses, and divert management’s and our Board of Director’s (the “Board”) attention and resources from our businesses and strategic plans.
Such actions or proposals can result in substantial costs, such as legal fees and expenses, and divert management’s and our Board of Director’s attention and resources from our businesses and strategic plans.
Further, if we experience any significant disruption to our financial information systems that we are unable to mitigate, our ability to timely report our financial results could be impacted, which could negatively impact our stock price.
Further, if we experience any significant disruption to our financial information systems that we are unable to mitigate, our ability to timely report our financial results could be impacted, which could negatively impact our stock price. 25 Table of Contents As part of our normal business activities, we collect, store, process, and use certain information that is confidential, proprietary or otherwise sensitive, including personal information of consumers, customers, suppliers, service providers and employees.
Forecasts are particularly challenging as we expand into new markets and geographies, develop and market new products, and face uncertainties related to consumer discretionary spending and general market conditions, including sustained high interest rates and inflation rates, and uncertainty related to geopolitical events, including the recent conflict in the Red Sea.
To ensure adequate inventory supply, we must forecast inventory needs and place orders with our manufacturers before firm orders are placed by our customers. Forecasts are particularly challenging as we expand into new markets and geographies, develop and market new products, and face macroeconomic uncertainties, including related to consumer discretionary spending, interest rates, inflation, tariffs and geopolitical events.
Additionally, laws regulating consumer products exist in states and some cities, as well as other countries in which we sell our products, and more restrictive laws and regulations may be adopted in the future. Any repurchase or recall of our products, monetary judgment, fine or other penalty could be costly and damaging to our reputation.
Any mandatory or voluntarily repurchase or recall of our products, as well as any related monetary judgment, fine, or other penalty, could be costly and damaging to our reputation and may result in large quantities of finished products that we would not be able to sell.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIncidents deemed “critical” or “high” are immediately escalated to the Chief Financial Officer, Chief Legal Officer, other senior leadership, and the Audit Committee. The Director, Cybersecurity has served in various roles in information technology and information security for over 24 years. Prior to joining YETI, he was a principal information security engineer for a global information technology consulting company.
Biggest changeIncidents deemed “critical” or “high” are immediately escalated to the Chief Financial Officer, Chief Legal Officer, other senior leadership, and the Audit Committee. Our CIO has served in various executive leadership roles for over 10 years and has over 30 years of experience in technology.
YETI also maintains a number of policies that apply to employees and contractors, including a Global Internal Data Protection and Privacy Policy, an Acceptable Use Policy, and a Password Policy. 31 Table of Contents • Insurance: YETI also maintains a cybersecurity and information security risk insurance policy. • Third Parties: YETI has processes in place to oversee and identify risks from cybersecurity threats associated with third-party vendors.
YETI also maintains a number of policies that apply to employees and contractors, including a Global Internal Data Protection and Privacy Policy, an Acceptable Use Policy, and a Password Policy. 32 Table of Contents • Insurance: YETI also maintains a cybersecurity and information security risk insurance policy. • Third Parties: YETI has processes in place to oversee and identify risks from cybersecurity threats associated with third-party vendors.
The Director, Technology Compliance holds an undergraduate degree in accounting and a master’s degree in management information systems and has attained the professional certifications of Certified Information Systems Auditor. Our Chief Legal Officer has over 13 years of experience managing risks, including risks arising from cybersecurity threats, in an officer capacity.
Our Director, Technology Compliance holds an undergraduate degree in accounting and a master’s degree in management information systems and has attained the professional certifications of Certified Information Systems Auditor. Our Chief Legal Officer has over 14 years of experience managing risks, including risks arising from cybersecurity threats, in an officer capacity.
As part of this program YETI employees are subject to reoccurring phishing exercises. The results of these exercises are used to inform the subject matter and frequency of additional training modules that employees are required to complete. In addition, employees annually receive training on data privacy and information security, including cybersecurity.
As part of this program YETI employees are subject to reoccurring phishing exercises. The results of these exercises are used to inform the subject matter and frequency of additional training modules that employees are required to complete. In addition, employees annually receive either reminders or training on data privacy and information security, including cybersecurity.
Through the practices and policies described above, including our incident response plan, our Director, Cybersecurity and Director, Technology Compliance are informed about cybersecurity threats and incidents affecting our information systems and lead the prevention, detection, mitigation, and remediation of cybersecurity threats and incidents in real time.
Through the practices and policies described above, including our incident response plan, our CIO, Director, Cyber Security and Director, Technology Compliance are informed about cybersecurity threats and incidents affecting our information systems and lead the prevention, detection, mitigation, and remediation of cybersecurity threats and incidents in real time.
The Audit Committee receives quarterly presentations regarding our enterprise risk management program, including reports from our Director of Cybersecurity, on information security matters (such as cybersecurity risk and developments), as well as the steps management takes to monitor and control such exposures.
The Audit Committee receives quarterly presentations regarding our enterprise risk management program, including reports from our CIO and Director, Cyber Security, on information security matters (such as cybersecurity risk and developments), as well as the steps management takes to monitor and control such exposures.
Our Chief Financial Officer has 20 years of experience managing risks at large companies. 32 Table of Contents
Our Chief Financial Officer has 20 years of experience managing risks at large companies. 33 Table of Contents
The Director, Technology Compliance has served in various roles in information technology for 11 years, including as a compliance manager for a large software company and information technology consultant for a major consulting firm.
Our Director, Technology Compliance has served in various roles in information technology for 12 years, including as a compliance manager for a large software company and information technology consultant for a major consulting firm.
Our Information Technology team (which includes our Director of Cybersecurity) and our Technology Compliance team (which includes our Director of Technology Compliance) have primary responsibility for the implementation of our cybersecurity program and the management of our responses to information technology and security risks, including risks related to cybersecurity threats.
Our Chief Information Officer (“CIO”), Director, Cyber Security (who reports to the CIO) and our Director, Technology Compliance (who ultimately reports to the Chief Legal Officer) have primary responsibility for the implementation of our cybersecurity program and the management of our responses to information technology and security risks, including risks related to cybersecurity threats.
Our Chief Financial Officer oversees our Information Technology team, which includes the Director, Cybersecurity. Our Chief Legal Officer oversees our Compliance team, which includes our Director, Technology Compliance.
Our CIO, who reports to our Chief Financial Officer, oversees our Information Technology and Cybersecurity teams, including the Director, Cyber Security. Our Chief Legal Officer oversees our Compliance team, which includes our Director, Technology Compliance.
The Director, Cybersecurity holds an undergraduate degree in information technology, a master’s degree in information systems and technology management and has attained the professional certifications of Certified Information Systems Security Professional and Certified Information Systems Auditor.
Prior to joining YETI, he was a principal information security engineer for a global information technology consulting company. Our Director, Cyber Security holds an undergraduate degree in information technology, a master’s degree in information systems and technology management and has attained the professional certifications of Certified Information Systems Security Professional and Certified Information Systems Auditor.
Added
Prior to joining YETI, he was the Senior Vice President of Consumer Technologies at a large publicly traded cosmetics company. The CIO holds a Masters of Business Administration. Our Director, Cyber Security has served in various roles in information technology and information security for over 25 years.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that our facilities, including space available through our third-party logistics providers, are in good condition and are adequate to support our current needs.
Biggest changeWe believe that our facilities, including space available through our third-party logistics providers, are in good condition and are adequate to support our current needs. Item 3. Legal Proceedings 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. Item 4.
Our primary distribution centers are leased and managed by third-party logistics providers and, as of December 30, 2023, were located in Salt Lake City, Utah, Memphis, Tennessee, Australia, Canada, the United Kingdom, New Zealand, and the Netherlands. In addition, as of December 30, 2023, we leased and operated 18 retail stores across the United States.
Our primary distribution centers are leased and managed by third-party logistics providers and, as of December 28, 2024, were located in Salt Lake City, Utah, Memphis, Tennessee, Sumner, Washington, Australia, Canada, the United Kingdom, New Zealand, Vietnam, and the Netherlands. In addition, as of December 28, 2024, we leased and operated 24 retail stores across the United States.
Item 2. Properties Our corporate headquarters are located in a 169,000 square foot leased facility in Austin, Texas, a portion of which we sublease. We also lease office and building space in Austin, Texas, Canada, China, Australia, and the Netherlands.
Item 2. Properties Our corporate headquarters are located in a 169,000 square foot leased facility in Austin, Texas. We previously subleased a portion of our corporate headquarters; however, the sublease ended in December 2024.
Added
As of December 28, 2024, we also leased office and building space in Montana, Australia, Canada, China, Germany, and the Netherlands, and additional building space in Austin, Texas.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 33 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 33 Item 6. Reserved 34 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 35 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 44 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 34 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 34 Item 6. Reserved 35 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 36 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 46 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeComparison of 5-Year Cumulative Total Return Since December 29, 2018 Assumes Initial Investment of $100 12/29/2018 12/28/2019 1/2/2021 1/1/2022 12/31/2022 12/30/2023 YETI Holdings, Inc. $ 100.00 $ 236.03 $ 462.01 $ 558.91 $ 278.74 $ 349.39 S&P 500 Index 100.00 132.97 157.02 202.09 165.49 209.00 S&P 500 Apparel, Accessories & Luxury Goods Index 100.00 121.90 107.21 111.81 61.10 59.03 The performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
Biggest changeStockholder returns over the indicated period should not be considered indicative of future stockholder returns. 34 Table of Contents Comparison of 5-Year Cumulative Total Return Since December 28, 2019 Assumes Initial Investment of $100 12/28/2019 1/2/2021 1/1/2022 12/31/2022 12/30/2023 12/28/2024 YETI Holdings, Inc. $ 100.00 $ 195.74 $ 236.79 $ 118.10 $ 148.03 $ 112.49 S&P 500 Index 100.00 118.08 151.98 124.46 157.17 199.46 S&P 500 Apparel, Accessories & Luxury Goods Index 100.00 89.78 95.23 53.83 53.70 50.56 The performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
Holders of Record As of February 15, 2024, there were approximately 53 shareholders of record of our common stock. This does not include the significant number of beneficial owners whose stock is in nominee or “street name” accounts through brokers, banks or other nominees. Dividend Policy We have not declared or paid any cash dividends on our common stock.
Holders of Record As of February 18, 2025, there were approximately 56 shareholders of record of our common stock. This does not include the significant number of beneficial owners whose stock is in nominee or “street name” accounts through brokers, banks or other nominees. Dividend Policy We have not declared or paid any cash dividends on our common stock.
The graph assumes that $100 was invested on December 29, 2018 in our common stock, the S&P 500 Index, and Standard & Poor’s 500 Apparel, Accessories & Luxury Goods Index and assumes reinvestment of any dividends, if any. Stockholder returns over the indicated period should not be considered indicative of future stockholder returns.
The graph assumes that $100 was invested on December 28, 2019 in our common stock, the S&P 500 Index, and Standard & Poor’s 500 Apparel, Accessories & Luxury Goods Index and assumes reinvestment of any dividends, if any.
We intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. 33 Table of Contents Stock Performance Graph The following graph shows a comparison of the cumulative total return for our common stock with that of the Standard & Poor’s 500 Stock Index (“S&P 500 Index”) and Standard & Poor’s 500 Apparel, Accessories & Luxury Goods Index.
Stock Performance Graph The following graph shows a comparison of the cumulative total return for our common stock with that of the Standard & Poor’s 500 Stock Index (“S&P 500 Index”) and Standard & Poor’s 500 Apparel, Accessories & Luxury Goods Index.
Added
We intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.
Added
Issuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid Per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Programs Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) (2) September 29 - November 2, 2024 — $ — — $ — November 3 - November 30, 2024 (3) 1,933,301 41.38 1,933,301 100,000,000 December 1 - December 28, 2024 — — — — 1,933,301 1,933,301 _________________________________________ (1) Average price paid per share excludes excise tax due under the Inflation Reduction Act of 2022.
Added
(2) In February 2024, YETI’s Board of Directors approved a $300.0 million share repurchase program (the “Share Repurchase Program”), excluding fees, commissions, and excise tax due under the Inflation Reduction Act of 2022 . As of December 28, 2024, $100.0 million remained available under the Share Repurchase Program.
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During the first quarter of 2025, YETI’s Board of Directors increased the Share Repurchase Program authorization by $350.0 million, excluding fees, commissions, and excise tax due under the Inflation Reduction Act of 2022 . As of February 24, 2025, $450.0 million remained available under the Share Repurchase Program.
Added
See Note 11-Stockholders’ Equity of the Consolidated Financial Statements for additional information about the Share Repurchase Program. (3) On November 12, 2024, we entered into an accelerated share repurchase agreement (the “November ASR Agreement”) with Goldman Sachs & Co. LLC to repurchase $100.0 million of YETI’s common stock, and received an initial delivery of 1,933,301 shares of YETI’s common stock.
Added
In January 2025, the ASR Agreement was completed and we received an additional 551,955 shares of YETI’s common stock. See Note 11-Stockholders’ Equity of the Consolidated Financial Statements for additional information about the ASR Agreement.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table sets forth selected statement of operations data, and their corresponding percentage of net sales, for the periods indicated (dollars in thousands): Fiscal Year Ended December 30, 2023 December 31, 2022 Statement of Operations Net sales $ 1,658,713 100 % $ 1,595,222 100 % Cost of goods sold (1) 715,527 43 % 831,821 52 % Gross profit 943,186 57 % 763,401 48 % Selling, general, and administrative expenses 717,728 43 % 637,040 40 % Operating income 225,458 14 % 126,361 8 % Interest expense (942) — % (4,466) — % Other income (expense), net 1,430 — % (5,718) — % Income before income taxes 225,946 14 % 116,177 7 % Income tax expense (56,061) 3 % (26,484) 2 % Net income $ 169,885 10 % $ 89,693 6 % ______________________________ (1) Includes $6.4 million of inbound freight expense related to an out-of-period adjustment for year ended December 31, 2022.
Biggest changeThe following table sets forth selected statement of operations data, and their corresponding percentage of net sales, for the periods indicated (dollars in thousands): Fiscal Year Ended December 28, 2024 December 30, 2023 Statement of Operations Net sales $ 1,829,873 100 % $ 1,658,713 100 % Cost of goods sold 766,589 42 % 715,527 43 % Gross profit 1,063,284 58 % 943,186 57 % Selling, general, and administrative expenses 817,908 45 % 717,728 43 % Operating income 245,376 13 % 225,458 14 % Interest income (expense) 660 — % (942) — % Other (expense) income, net (13,188) 1 % 1,430 — % Income before income taxes 232,848 13 % 225,946 14 % Income tax expense (57,159) 3 % (56,061) 3 % Net income $ 175,689 10 % $ 169,885 10 % Year Ended December 28, 2024 Compared to Year Ended December 30, 2023 Fiscal Year Ended December 28, 2024 December 30, 2023 Change (dollars in thousands) $ % Net sales $ 1,829,873 $ 1,658,713 $ 171,160 10 % Gross profit 1,063,284 943,186 120,098 13 % Gross margin (gross profit as a % of net sales) 58.1 % 56.9 % 120 basis points Selling, general, and administrative expenses $ 817,908 $ 717,728 $ 100,180 14 % SG&A as a % of net sales 44.7 % 43.3 % 140 basis points Net Sales Net sales increased $171.2 million, or 10%, to $1,829.9 million in 2024 from $1,658.7 million in 2023.
We will reevaluate these assumptions each period, and the related reserves may be adjusted when factors indicate that the reserve is either not sufficient to cover or exceeds the estimated product recall expenses. The ultimate impact from the approved voluntary recalls could differ materially from these estimates.
We reevaluate these assumptions each period, and the related reserves may be adjusted when factors indicate that the reserve is either not sufficient to cover or exceeds the estimated product recall expenses. The ultimate impact from the approved voluntary recalls could differ materially from these estimates.
Revenue Recognition Revenue transactions associated with the sale of YETI branded coolers, equipment, drinkware, apparel and accessories comprise a single performance obligation, which consists of the sale of products to customers either through our wholesale or DTC channels.
Revenue Recognition Revenue transactions associated with the sale of YETI coolers, equipment, drinkware, apparel and accessories comprise a single performance obligation, which consists of the sale of products to customers either through our wholesale or DTC channels.
Product Recall Reserves As described in Note 11 of the Notes to Consolidated Financial Statements, in January 2023, we notified the CPSC of a potential safety concern regarding the magnet-lined closures of our Hopper M30 Soft Cooler, Hopper M20 Soft Backpack Cooler, and SideKick Dry gear case (the “affected products”) and initiated a global stop sale of the affected products.
Product Recall Reserves As described in Note 12 of the Notes to Consolidated Financial Statements, in January 2023, we notified the CPSC of a potential safety concern regarding the magnet-lined closures of our Hopper M30 Soft Cooler, Hopper M20 Soft Backpack Cooler, and SideKick Dry gear case (the “affected products”) and initiated a global stop sale of the affected products.
Gross profit reflects net sales less cost of goods sold, which primarily includes the purchase cost of our products from our third-party contract manufacturers, inbound freight and duties, product quality testing and inspection costs, depreciation expense of our molds, tooling, and equipment, and the cost of customizing products. We calculate gross margin as gross profit divided by net sales.
Gross profit reflects net sales less cost of goods sold, which primarily includes the purchase cost of our products from our third-party contract manufacturers, inbound freight and duties, product receiving testing and inspection costs, depreciation expense of our molds, tooling, and equipment, and the cost of customizing products. We calculate gross margin as gross profit divided by net sales.
Unless otherwise stated, references to particular years, quarters, months and periods refer to our fiscal years ended in December and the associated quarters, months, and periods of those fiscal years. 37 Table of Contents Results of Operations The discussion below should be read in conjunction with the following table and our consolidated financial statements and related notes contained elsewhere in this Report.
Unless otherwise stated, references to particular years, quarters, months and periods refer to our fiscal years ended in December and the associated quarters, months, and periods of those fiscal years. 38 Table of Contents Results of Operations The discussion below should be read in conjunction with the following table and our consolidated financial statements and related notes contained elsewhere in this Report.
We believe that our current operating performance, operating plan, our strong cash position, and borrowings available under our Revolving Credit Facility will be sufficient to satisfy our foreseeable liquidity needs and capital expenditure requirements, including for at least the next twelve months.
We believe that our current operating performance, operating plan, our strong cash position, and borrowings available under our Revolving Credit Facility will be sufficient to satisfy our liquidity needs and capital expenditure requirements for at least the next twelve months and the foreseeable future.
Based on our qualitative assessment performed during the fourth quarter of 2023, we determined that it is not more likely than not that the fair value of each reporting unit is lower than its carrying value; therefore, the quantitative impairment test was not required.
Based on our qualitative assessment performed during the fourth quarter of 2024, we determined that it is not more likely than not that the fair value of each reporting unit is lower than its carrying value; therefore, the quantitative impairment test was not required.
A 10% change in our estimated reserve for sales returns, discounts, and miscellaneous claims for 2023 would have impacted net sales by $1.2 million.
A 10% change in our estimated reserve for sales returns, discounts, and miscellaneous claims for 2024 would have impacted net sales by $1.2 million.
Net sales for 2023 were materially adversely impacted by the stop sale of the soft coolers included in the recalls initiated during the first quarter of 2023. In addition, net sales for 2023 include $25.3 million of sales related to gift card redemptions in connection with recall remedies.
Net sales for 2023 were materially adversely impacted by the stop sale of the soft coolers included in the recalls initiated during the first quarter of 2023. In addition, net sales for 2024 and 2023 include $8.8 million and $25.3 million, respectively, of sales related to gift card redemptions in connection with recall remedies.
Recent Accounting Pronouncements For a description of recent accounting pronouncements, see “ Recently Adopted Accounting Pronouncements ” and “ Recent Accounting Guidance Not Yet Adopted ” in Note 1 of the Notes to Consolidated Financial Statements included herein.
Recent Accounting Pronouncements For a description of recent accounting pronouncements, see “ Recently Adopted Accounting Pronouncements ” and “ Recent Accounting Guidance Not Yet Adopted ” in Note 1 of the Notes to Consolidated Financial Statements included herein. 45 Table of Contents
Our domestic national and regional specialty retailers include Dick’s Sporting Goods, REI, Academy Sports + Outdoors, Bass Pro Shops, Ace Hardware, Scheels, and Tractor Supply Company. We sell our products in our DTC channel to customers on YETI.com, country and region-specific YETI websites, and YETI Authorized on the Amazon Marketplace, as well as in our retail stores.
Our domestic national and regional specialty retailers include Dick’s Sporting Goods, REI, Academy Sports + Outdoors, Bass Pro Shops, Ace Hardware, Scheels, and Tractor Supply Company. We sell our products in our DTC channel to customers through our websites and YETI Authorized on the Amazon Marketplace, as well as in our retail stores.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the year ended December 31, 2022 , which was filed with the SEC on February 27, 2023. Business Overview Headquartered in Austin, Texas, YETI is a global designer, retailer, and distributor of innovative outdoor products.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the year ended December 30, 2023 , which was filed with the SEC on February 26, 2024. Business Overview Headquartered in Austin, Texas, YETI is a global designer, retailer, and distributor of innovative outdoor products.
We did not record any goodwill or indefinite-lived intangible assets impairment charges during the years ended December 30, 2023, December 31, 2022 and January 1, 2022.
We did not record any goodwill or indefinite-lived intangible assets impairment charges during the years ended December 28, 2024, December 30, 2023 and December 31, 2022.
A discussion of our results of operations for the year ended December 31, 2022 compared to the year ended January 1, 2022 is included in Part II, Item 7.
A discussion of our results of operations for the year ended December 30, 2023 compared to the year ended December 31, 2022 is included in Part II, Item 7.
Product Recall Update In January 2023, we notified the Consumer Products Safety Commission (“CPSC”) of a potential safety concern regarding the magnet-lined closures of our Hopper M30 Soft Cooler, Hopper M20 Soft Backpack Cooler, and SideKick Dry gear case (the “affected products”) and initiated a global stop sale of the affected products.
Consumer Product Safety Commission (“CPSC”) of a potential safety concern regarding the magnet-lined closures of our Hopper M30 Soft Cooler, Hopper M20 Soft Backpack Cooler, and SideKick Dry gear case (the “affected products”) and initiated a global stop sale of the affected products.
Financing Activities The decrease in cash used in financing activities in 2023 compared to 2022 was primarily driven by repurchases of common stock in the prior year period. Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP.
Financing Activities The increase in cash used in financing activities in 2024 compared to 2023 was primarily due to repurchases of common stock. Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP.
The ultimate costs from the approved voluntary recalls could differ materially from this estimate, and as such, changes in the estimate may have a material impact on our financial condition, results of operations, and cash flows. 41 Table of Contents Cash Flows from Operating, Investing and Financing Activities The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated (in thousands): Fiscal Year Ended December 30, 2023 December 31, 2022 Cash flows provided by (used in): Operating activities $ 285,942 $ 100,894 Investing activities (72,824) (56,910) Financing activities (13,596) (122,628) Operating Activities Cash flows related to operating activities are dependent on net income, non-cash adjustments to net income, and changes in working capital.
The ultimate costs from the approved voluntary recalls could differ materially from this estimate, and as such, changes in the estimate may have a material impact on our financial condition, results of operations, and cash flows. 42 Table of Contents Cash Flows from Operating, Investing and Financing Activities The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated (in thousands): Fiscal Year Ended December 28, 2024 December 30, 2023 Cash flows provided by (used in): Operating activities $ 261,386 $ 285,942 Investing activities (131,448) (72,824) Financing activities (209,217) (13,596) Operating Activities Cash flows related to operating activities are dependent on net income, non-cash adjustments to net income, and changes in working capital.
The table of our material cash requirements above excludes unrecognized tax benefits as we are unable to reasonably predict the timing of settlement of liabilities, if any, related to unrecognized tax benefits. As of December 30, 2023, we had unrecognized tax benefits of $17.6 million.
The table of our material cash requirements above excludes unrecognized tax benefits as we are unable to reasonably predict the timing of settlement of liabilities, if any, related to unrecognized tax benefits. As of December 28, 2024, we had unrecognized tax benefits of $21.2 million.
Our fiscal years 2023, 2022 and 2021 ended on December 30, 2023, December 31, 2022 and January 1, 2022, respectively, and were 52 weeks each.
Our fiscal years 2024, 2023 and 2022 ended on December 28, 2024, December 30, 2023 and December 31, 2022, respectively, and were 52 weeks each.
If actual or expected future returns and discounts were significantly greater or lower than the reserves we had established, we would record a reduction or increase to net sales in the period in which we made such determination.
Actual returns and discounts in any future period are inherently uncertain and thus may differ from our estimates. If actual or expected future returns and discounts were significantly greater or lower than the reserves we had established, we would record a reduction or increase to net sales in the period in which we made such determination.
We fund our working capital, which primarily consists of inventory and accounts receivable, and our capital investments from cash flows from operating activities, cash on hand, and borrowings available under our Revolving Credit Facility. Pursuant to our new share repurchase plan described below, we also plan to use cash to repurchase shares of our common stock.
We fund our working capital and our capital investments from cash flows from operating activities, cash on hand, and borrowings available under our Revolving Credit Facility. Pursuant to our Share Repurchase Program described below, we use cash to repurchase shares of our common stock.
Current Liquidity As of December 30, 2023, we had a cash balance of $439.0 million, $77.1 million of working capital (excluding cash), and $300.0 million of borrowings available under the Revolving Credit Facility. Credit Facility Our Credit Facility provides for a $300.0 million Revolving Credit Facility and an $84.4 million term loan (“Term Loan A”).
Current Liquidity As of December 28, 2024, we had a cash balance of $358.8 million, $88.5 million of working capital (excluding cash), and $300.0 million of borrowings available under the Revolving Credit Facility. Credit Facility Our Credit Facility provides for a $300.0 million Revolving Credit Facility and an $84.4 million term loan (“Term Loan A”).
We discuss the net sales of our products in our two primary categories: Coolers & Equipment and Drinkware. Our Coolers & Equipment category includes hard coolers, soft coolers, bags, outdoor equipment, and cargo, as well as accessories and replacement parts for these products. Our Drinkware category is primarily composed of our stainless-steel drinkware products and related accessories.
Our Coolers & Equipment category includes hard coolers, soft coolers, bags, outdoor equipment, and cargo, as well as accessories and replacement parts for these products. Our Drinkware category is primarily composed of our stainless-steel drinkware products and related accessories.
As of December 30, 2023, our reserve for estimated recall expenses, including the expected cost of returns, was $13.1 million.
As of December 28, 2024, our reserve for estimated recall expenses, including the expected cost of returns, was $12.1 million.
At December 30, 2023, we had $82.3 million principal amount of indebtedness outstanding under the Term Loan A and no outstanding borrowings under the Revolving Credit Facility. The weighted average interest rate for borrowings under Term Loan A was 6.83% during the year ended December 30, 2023.
At December 28, 2024, we had $78.0 million principal amount of indebtedness outstanding under the Term Loan A and no outstanding borrowings under the Revolving Credit Facility. The weighted average interest rate for borrowings under Term Loan A was 7.09% during the year ended December 28, 2024.
At December 30, 2023, we were in compliance with all covenants and expect to remain in compliance with all covenants under the Credit Facility. 40 Table of Contents Share Repurchase Program On February 1, 2024, our Board of Directors authorized the repurchase of up to $300 million (exclusive of fees and commissions) of YETI’s common stock.
At December 28, 2024, we were in compliance with all covenants and expect to remain in compliance with all covenants under the Credit Facility. 41 Table of Contents Share Repurchase Program On February 1, 2024, our Board of Directors authorized the repurchase of up to $300.0 million (exclusive of fees and commissions) of YETI’s common stock (the “Share Repurchase Program”), excluding fees, commissions, and excise tax due under the Inflation Reduction Act of 2022 .
Net sales in our channels were as follows: • DTC channel net sales increased $80.0 million, or 9%, to $997.7 million in 2023 from $917.7 million in 2022, driven by both Drinkware and Coolers & Equipment categories.
Net sales in our channels were as follows: • DTC channel net sales increased $89.9 million, or 9%, to $1,087.6 million in 2024 from $997.7 million in 2023, primarily driven by growth in both Coolers & Equipment and Drinkware categories.
Additionally, we offer customized products with licensed trademarks and original artwork through our corporate sales program, at YETI.com and certain country-specific YETI websites. Our corporate sales program offers customized products to corporate customers for a wide-range of events and activities, and in certain instances may also offer products to re-sell.
Additionally, we offer customized products with licensed marks and original artwork primarily through our DTC channel, including our corporate sales channel, on our websites, and at select retail stores. Our corporate sales program offers customized products to corporate customers for a wide-range of events and activities, and in certain instances may also offer products to re-sell.
We review goodwill and indefinite-lived intangible assets for impairment annually or whenever events or changes in circumstances indicate the carrying amount may be impaired. In conducting our annual impairment test, we first review qualitative factors to determine whether it is more likely than not that the fair value of the asset, or reporting units, is less than its carrying amount.
In conducting our annual impairment test, we first review qualitative factors to determine whether it is more likely than not that the fair value of the asset, or reporting units, is less than its carrying amount.
SG&A expenses included a favorable impact of $11.4 million in 2023 primarily related to recall reserve adjustments, and an unfavorable impact of $31.9 million in 2022 in connection with the initial recognition of the recall reserves, as discussed above.
SG&A expenses included an unfavorable impact of $1.8 million in 2024 and a favorable impact of $11.4 million in 2023 primarily related to recall reserve adjustments, as discussed above.
We may accept, and have at times accepted, returns outside our terms of sale at our sole discretion. We may also, at our sole discretion, provide our retail partners with sales discounts and allowances. We record estimated sales returns, discounts, and miscellaneous customer claims as reductions to net sales at the time revenues are recorded.
We may also, at our sole discretion, provide our retail partners with sales discounts and allowances. We record estimated sales returns, discounts, and miscellaneous customer claims as reductions to net sales at the time revenues are recorded. We base our estimates upon historical experience and trends, and upon approval of specific returns or discounts.
The reserve for the estimated product recall expenses of $13.1 million and $94.8 million is included within accrued expenses and other current liabilities on our consolidated balance sheet as of December 30, 2023 and December 31, 2022, respectively.
The reserve for the estimated product recall expenses of $12.1 million and $13.1 million is included within accrued expenses and other current liabilities on our consolidated balance sheet as of December 28, 2024 and December 30, 2023, respectively. Business Combinations We account for business combinations using the acquisition method of accounting.
Selling, General, and Administrative Expenses SG&A expenses increased by $80.7 million, or 13%, to $717.7 million in 2023 from $637.0 million in 2022. As a percentage of net sales, SG&A expenses increased 340 basis points to 43.3% in 2023 from 39.9% in 2022.
Selling, General, and Administrative Expenses SG&A expenses increased by $100.2 million, or 14%, to $817.9 million in 2024 from $717.7 million in 2023. As a percentage of net sales, SG&A expenses increased 140 basis points to 44.7% in 2024 from 43.3% in 2023.
DTC channel net sales included an unfavorable impact of $7.3 million in 2023 primarily related to recall reserve adjustments, and an unfavorable impact of $6.2 million in 2022 in connection with the initial recognition of the recall reserves.
DTC channel net sales included an unfavorable impact of $8.3 million in 2024 and $7.3 million in 2023 primarily related to recall reserve adjustments.
Revenue from wholesale transactions is generally recognized at the time products are shipped based on contractual terms with the customer. Revenue from our DTC channel is generally recognized at the point of sale in our retail stores and at the time products are shipped for e-commerce transactions and corporate sales based on contractual terms with the customer.
Revenue from our DTC channel is generally recognized at the point of sale in our retail stores and at the time products are shipped for e-commerce transactions and corporate sales based on contractual terms with the customer. 43 Table of Contents Revenue is recognized net of estimates of variable consideration, including product returns, customer discounts and allowances, sales incentive programs, and miscellaneous claims from customers.
Net sales included an unfavorable impact of $21.7 million in 2023 primarily related to recall reserve adjustments, and an unfavorable impact of $38.4 million in 2022 in connection with the initial recognition of the recall reserves, as discussed above. Excluding these recall-related impacts, sales increased 3% primarily due to volume growth in our DTC channel.
Net sales included an unfavorable impact of $8.8 million in 2024 and $21.7 million in 2023 primarily related to recall reserve adjustments, as discussed above. Excluding these recall-related impacts, sales increased 9% primarily due to volume growth in both our DTC and Wholesale channels.
Although such effects have not materially impacted our business to date, such conditions could worsen. A worsening of any of the macroeconomic trends discussed herein may adversely impact our business, operations, and financial results in the future. We will continue to monitor and, if necessary, mitigate the effects of the macroeconomic environment on our business.
Although such conditions have not materially impacted our business to date, the continuation or worsening of these conditions may materially impact our operations and financial results in 2025. A worsening of any of the macroeconomic trends or uncertainties discussed herein may adversely impact our business, operations, and financial results in the future.
YETI has no obligation to repurchase any amount of our common stock, and such repurchases may be suspended or discontinued at any time.
YETI has no obligation to repurchase any amount of our common stock, and such repurchases may be suspended or discontinued at any time. As of December 28, 2024, $100.0 million remained available under the Share Repurchase Program.
Product warranty costs are estimated based on historical and anticipated trends and are recorded as cost of goods sold at the time revenue is recognized. We elected to account for shipping and handling as fulfillment activities, and not as separate performance obligations. Shipping and handling fees billed to customers are included in net sales.
We elected to account for shipping and handling as fulfillment activities, and not as separate performance obligations. Shipping and handling fees billed to customers are included in net sales. All shipping and handling activity costs are recognized as selling, general and administrative expenses at the time the related revenue is recognized.
Inventory Inventories are comprised primarily of finished goods and are carried at the lower of cost (weighted-average cost method) or market (net realizable value). We make ongoing estimates relating to the net realizable value of inventories based upon our assumptions about future demand and market conditions.
We make ongoing estimates relating to the net realizable value of inventories based upon our assumptions about future demand and market conditions. If the estimated net realizable value is less than cost, we reflect the lower value of that inventory.
Due to customer demand and inventory constraints, we have not historically taken material adjustments to the carrying value of our inventory. Our inventory valuation reflects adjustments for anticipated inventory losses that have occurred since the last physical inventory. We estimate inventory shrinkage based on historical trends from physical inventory counts and cycle counts.
This methodology recognizes inventory exposures at the time such losses are identified rather than at the time the inventory is actually sold. Due to customer demand and inventory constraints, we have not historically taken material adjustments to the carrying value of our inventory. Our inventory valuation reflects adjustments for anticipated inventory losses that have occurred since the last physical inventory.
The increase in the effective tax rate was primarily due to a lower tax benefit from our export sales deductions and an unfavorable tax impact related to stock-based compensation in 2023. Liquidity and Capital Resources General Our cash requirements have principally been for working capital purposes, long-term debt repayments, and capital expenditures.
The increase in income tax expense was primarily due to higher income before income taxes. Liquidity and Capital Resources General Our cash requirements have principally been for working capital purposes, long-term debt repayments, and capital expenditures.
Our variable expenses, including outbound freight, online marketplace fees, third-party logistics fees, and credit card processing fees, will vary as they are dependent on our sales volume and our channel mix. Our DTC channel variable SG&A costs are generally higher as a percentage of net sales than our wholesale channel distribution costs. Fiscal Year.
Our distribution and fulfillment costs include costs of our third-party warehousing and logistics operations, outbound freight costs, costs of operating on third-party DTC marketplaces, and credit card processing fees. Certain distribution and fulfillment costs will vary as they are dependent on our sales volume and our channel mix.
Our DTC channel represented 60% and 58% of total net sales in 2023 and 2022, respectively. 38 Table of Contents • Net sales in our wholesale channel decreased $16.5 million, or 2%, to $661.0 million in 2023 from $677.5 million in 2022.
Our DTC channel represented 59% and 60% of total net sales in 2024 and 2023, respectively. • Net sales in our wholesale channel increased $81.3 million, or 12%, to $742.3 million in 2024 from $661.0 million in 2023.
Coolers & Equipment net sales included an unfavorable impact of $21.7 million in 2023 primarily related to recall reserve adjustments, and an unfavorable impact of $38.4 million in 2022 in connection with the initial recognition of the recall reserves.
Coolers & Equipment net sales included an unfavorable impact of $8.8 million in 2024 and $21.7 million in 2023 primarily related to recall reserve adjustments. The increase in Coolers & Equipment net sales was primarily driven by strong performance in bags, soft coolers, and hard coolers.
The actual amount of customer returns and customer allowances, which is inherently uncertain, may differ from our estimates. 42 Table of Contents The duration of contractual arrangements with our customers is typically less than 1 year. Payment terms with wholesale customers vary depending on creditworthiness and other considerations, with the most common being net 30 days.
We determine these estimates based on contract terms, evaluations of historical experience, anticipated trends, and other factors. The actual amount of customer returns and customer allowances, which is inherently uncertain, may differ from our estimates. The duration of contractual arrangements with our customers is typically less than 1 year.
Selling, general, and administrative ( “ SG&A ” ) expenses consist primarily of marketing costs, employee compensation and benefits costs, costs of our outsourced warehousing and logistics operations, costs of operating on third-party DTC marketplaces, professional fees and services, non-cash stock-based compensation, cost of product shipment to our customers, depreciation and amortization expense, and general corporate infrastructure expenses.
Selling, general, and administrative ( “ SG&A ” ) expenses consist primarily of marketing costs, employee compensation and benefits costs, including non-cash stock-based compensation, distribution and fulfillment costs, depreciation and amortization expense, and general corporate infrastructure expenses.
The increase in SG&A expenses resulted from: • an increase in variable expenses of $39.7 million (increasing SG&A as a percent of sales by 190 basis points) primarily associated with higher DTC channel sales, and comprised of higher distribution costs including higher outbound freight rates, online marketplace fees, third-party logistics fees, and credit card processing fees; • an increase in non-variable expenses of $84.3 million (increasing SG&A as a percent of sales by 420 basis points) comprised of higher employee costs, mainly due to incentive compensation, investments in headcount to support future growth, and non-cash stock-based compensation expense, as well as investments in marketing expenses, warehousing costs, facility costs, and other operating expenses; which were partially offset by • the lower impact of the recall reserves, which favorably impacted SG&A expenses by $43.3 million (decreasing SG&A as a percent of sales by 270 basis points). 39 Table of Contents Non-Operating Expenses Interest expense was $0.9 million in 2023, compared to $4.5 million in 2022.
The increase in SG&A expenses resulted from: • an increase in employee compensation and benefits of $39.9 million (increasing SG&A as a percent of sales by 130 basis points) mainly due to investments in headcount to support future growth and non-cash stock-based compensation expense; • an increase in general and administrative expenses of $20.4 million (increasing SG&A as a percent of sales by 50 basis points) mainly due to higher technology expenses, asset impairments, occupancy costs, and professional fees; • an increase in marketing and advertising expenses of $14.6 million (increasing SG&A as a percent of sales by 10 basis points); • the net impact of the recall reserves adjustments, which unfavorably impacted SG&A expenses by $13.2 million (increasing SG&A as a percent of sales by 80 basis points); and • an increase in distribution and fulfillment expenses of $12.8 million (decreasing SG&A as a percent of sales by 110 basis points) primarily due to higher online marketplace fees and third-party logistics fees associated with higher net sales, partially offset by lower outbound freight.
Net sales in our two primary product categories were as follows: • Drinkware net sales increased $75.8 million, or 8%, to $1,023.0 million in 2023 from $947.2 million in 2022, primarily driven by strong demand for the continued expansion and innovation of our Drinkware product offerings, including Rambler straw lid mugs, Rambler and Yonder bottles, specialty coffee cups and tabletop solutions, as well as new seasonal colorways. • Coolers & Equipment net sales decreased $15.0 million, or 2%, to $597.5 million in 2023 from $612.5 million in 2022.
Our wholesale channel represented 41% and 40% of total net sales in 2024 and 2023, respectively. 39 Table of Contents Net sales in our two primary product categories were as follows: • Drinkware net sales increased $71.2 million, or 7%, to $1,094.2 million in 2024 from $1,023.0 million in 2023, primarily driven by demand for the continued expansion and innovation of our Drinkware product offerings and new seasonal colorways. • Coolers & Equipment net sales increased $101.1 million, or 17%, to $698.6 million in 2024 from $597.5 million in 2023.
Gross profit included an unfavorable impact of $13.3 million in 2023 primarily related to recall reserve adjustments, and an unfavorable impact of $97.0 million in 2022 in connection with the initial recognition of the recall reserves, as discussed above.
Gross margin increased 120 basis points to 58.1% in 2024 from 56.9% in 2023. Gross profit included an unfavorable impact of $8.1 million in 2024 and $13.3 million in 2023 primarily related to recall reserve adjustments, as discussed above.
Product Introductions and Updates During the first quarter of 2023, we expanded our cargo offerings with the launch of the new LoadOut GoBox in three sizes, introduced the new stackable Rambler Lowball, built new customization capabilities for our Yonder bottles, and introduced new seasonal colorways.
Product Introductions and Updates During the first quarter of 2024, we expanded our Drinkware offerings with the launch of the new Yonder Bottle with Straw Cap in two sizes, and expanded the Rambler Stackable cup family with the addition of three new sizes.
The increase in cash received for working capital was primarily due to a decrease in inventory and an increase in accounts payable and other accrued expenses, partially offset by an increase in accounts receivable. Investing Activities The increase in cash used in investing activities in 2023 compared to 2022 was primarily related to increased purchases of intangible assets.
The decrease in cash provided by operating activities in 2024 compared to 2023 was primarily due to an increase in cash used by working capital driven by lower accounts payable and accrued expenses balances and higher account receivable balances in 2024.
All shipping and handling activity costs are recognized as selling, general and administrative expenses at the time the related revenue is recognized. Sales taxes collected from customers and remitted directly to government authorities are excluded from net sales and cost of goods sold. Our terms of sale provide limited return rights.
Sales taxes collected from customers and remitted directly to government authorities are excluded from net sales and cost of goods sold. Our terms of sale provide limited return rights. We may accept, and have at times accepted, returns outside our terms of sale at our sole discretion.
Payment is due at the time of sale for retail store transactions and at the time of shipment for e-commerce transactions. Certain products that we sell include a limited warranty which does not meet the definition of a performance obligation within the context of the contract.
Certain products that we sell include a limited warranty which does not meet the definition of a performance obligation within the context of the contract. Product warranty costs are estimated based on historical and anticipated trends and are recorded as cost of goods sold at the time revenue is recognized.
General Components of Our Results of Operations Net Sales . Net sales are comprised of wholesale channel sales to our retail partners and sales through our DTC channel. Net sales in both channels reflect the impact of product returns as well as discounts for certain sales programs or promotions.
Net sales in both channels reflect the impact of product returns as well as discounts for certain sales programs or promotions. We discuss the net sales of our products in our two primary categories: Coolers & Equipment and Drinkware.
Wholesale channel net sales included an unfavorable impact of $14.4 million in 2023 primarily related to recall reserve adjustments, and an unfavorable impact of $32.2 million in 2022 in connection with the initial recognition of the recall reserves.
Wholesale channel net sales included an unfavorable impact of $0.6 million in 2024 and $14.4 million in 2023 related to recall reserve adjustments. The increase in our wholesale channel sales was primarily driven by both Coolers & Equipment and Drinkware categories, as well as a net favorable impact of $13.8 million related to the recall reserves.
Material Cash Requirements For 2024, we expect capital expenditures for property and equipment to be approximately $60 million, primarily to support investments in technology, new product innovation, expansion of our custom portfolio and capacity, and retail stores investments.
See Note 11-Stockholders’ Equity of the Consolidated Financial Statements for additional information about the Share Repurchase Program. Material Cash Requirements For 2025, we expect capital expenditures for property and equipment to be between $60.0 million and $70.0 million, primarily to support investments in technology, new product innovation, and our supply chain.
The increase in cash provided by operating activities in 2023 was primarily due to an increase in cash received for working capital, and to a smaller extent, net income, adjusted for non-cash items, including the impact of our voluntary recalls, for the periods compared.
The increase in cash provided by operating activities was partially offset by an increase in net income and the impact of non-cash items.
(“Mystery Ranch”), a designer and manufacturer of durable load-bearing backpacks, bags, and pack accessories, and Butter Pat Industries, LLC (“Butter Pat”), a designer and manufacturer of cast iron cookware. We plan to integrate Mystery Ranch and Butter Pat operations and products into our business to further expand our capabilities in the cookware and bags categories.
In our Coolers and Equipment category, we launched the LoadOut Swivel Seat and a limited release of the first Mystery Ranch-inspired Bozeman pack. 36 Table of Contents Acquisitions During the first quarter of 2024, we completed the acquisitions of Mystery Ranch, a designer and manufacturer of durable load-bearing backpacks, bags, and pack accessories, and Butter Pat Industries, LLC (“Butter Pat”), a designer and manufacturer of cast iron cookware.
There is significant uncertainty regarding how macroeconomic trends, including sustained high levels of inflation and higher interest rates, will impact consumer demand. While some of these conditions have negatively impacted consumer discretionary spending behavior, we continue to see strong consumer demand for our products.
See Part I, Item 1A “Risk Factors - Risks Related to Our Business, Operations and Industry.” 37 Table of Contents Macroeconomic Conditions There remains significant uncertainty regarding how macroeconomic conditions, including sustained high levels of inflation and higher interest rates, will impact consumer demand.
The total unfavorable impact to operating income related to the recalls was $1.9 million in 2023. As of December 30, 2023 and December 31, 2022, our reserve for estimated recall expenses was $13.1 million and $94.8 million, respectively.
As of December 28, 2024 and December 30, 2023, our reserve for estimated recall expenses was $12.1 million and $13.1 million, respectively. The ultimate impact from the recalls may differ materially from our estimates, and may harm our business, financial condition and results of operations.
We perform physical inventory counts and cycle counts throughout the year and adjust the shrink provision accordingly. Historically, physical inventory shrinkage has not been significant. 43 Table of Contents Valuation of Goodwill and Indefinite-Lived Intangible Assets Goodwill and intangible assets are recorded at cost, or at their estimated fair values at the date of acquisition.
We estimate inventory shrinkage based on historical trends from physical inventory counts and cycle counts. We perform physical inventory counts and cycle counts throughout the year and adjust the shrink provision accordingly. Historically, physical inventory shrinkage has not been significant.
Income tax expense was $56.1 million in 2023, compared to $26.5 million in 2022. Our effective tax rate for 2023 was 25% compared to 23% for 2022. The increase in income tax expense was primarily due to an increase in earnings before taxes in 2023.
The change versus the prior year period was primarily due to unrealized foreign currency losses on intercompany balances in the current period versus unrealized foreign currency gains on intercompany balances in the prior year. Income tax expense was $57.2 million in 2024, compared to $56.1 million in 2023. Our effective tax rate was 25% for both 2024 and 2023.
The following table summarizes current and long-term material cash requirements for contractual and other obligations as of December 30, 2023 (in thousands): Material Cash Requirements Total 2024 2025 2026 2027 2028 Thereafter Long-term debt principal payment $ 82,266 $ 4,219 $ 4,219 $ 4,219 $ 4,219 $ 65,390 $ — Interest $ 26,783 6,520 6,187 5,896 5,582 2,598 — Operating lease obligations $ 107,279 18,571 21,236 17,612 13,280 9,427 27,153 Finance leases $ 6,003 2,300 2,360 1,011 176 156 — Other non-cancellable agreements (1) $ 154,013 73,867 50,515 21,900 6,198 1,533 — Total $ 376,344 $ 105,477 $ 84,517 $ 50,638 $ 29,455 $ 79,104 $ 27,153 _________________________________________ (1) We have entered into commitments for service and maintenance agreements related to our management information systems, distribution contracts, advertising, sponsorships, and licensing agreements.
The following table summarizes current and long-term material cash requirements for contractual and other obligations as of December 28, 2024 (in thousands): Material Cash Requirements Total 2025 2026 2027 2028 2029 Thereafter Long-term debt principal payment $ 78,047 $ 4,219 $ 4,219 $ 4,219 $ 65,390 $ — $ — Interest 15,597 4,797 4,532 4,267 2,001 — — Operating lease obligations 110,490 24,034 20,582 15,767 11,718 8,940 29,449 Finance leases 3,536 2,315 973 142 106 — — Other non-cancellable agreements (1) 166,765 64,707 53,305 21,046 14,957 11,498 1,252 Total $ 374,435 $ 100,072 $ 83,611 $ 45,441 $ 94,172 $ 20,438 $ 30,701 _________________________________________ (1) We have entered into commitments for service and maintenance agreements related to our management information systems, distribution contracts, advertising, sponsorships, and licensing agreements.
During the second quarter of 2023, we expanded our drinkware offerings with the launch of the new Rambler beverage bucket, introduced new color-matched straw lid Rambler bottles and our first ever cast iron skillet, and continued to expand our seasonal colorways.
During the third quarter of 2024, we expanded our Drinkware category with the launch of our new Cast Iron Skillet in three sizes, our new Rambler Pitcher in two sizes, as well as the full release of our Flask and Shot Glasses. We also introduced new seasonal colorways.
The ultimate impact from the recalls may differ materially from our estimates, and may harm our business, financial condition and results of operations. See Part I, Item 1A “Risk Factors - Risks Related to Our Business, Operations and Industry.” In addition, our 2023 sales were materially adversely impacted by the stop sale of the affected products.
The total unfavorable impact to operating income related to the recalls was $1.9 million in 2023. In addition, our sales from the first to the third quarter of 2023 were materially adversely impacted by the stop sales of the affected products. In the fourth quarter of 2023, we introduced our redesigned and improved versions of the affected products.
The decrease was primarily driven by higher interest income, partially offset by an increase in interest expense due to higher interest rates on our outstanding long-term debt. Other income, net was $1.4 million in 2023, compared to other expense of $5.7 million in 2022. The increase in other income, net was due to foreign currency gains on intercompany balances.
The change versus the prior year period was primarily due to an increase in interest income. Other expense, net was $13.2 million in 2024. Other income, net was $1.4 million in 2023.
Removed
During the fourth quarter of 2023, we introduced our redesigned and improved SideKick Dry gear case as well as our Hopper M30 Soft Cooler and Hopper M20 Soft Backpack Cooler, and also launched two new sizes with the Hopper M15 Soft Cooler and the Hopper M12 Soft Backpack Cooler (collectively, the “Hopper M Series Soft Cooler line”).
Added
In our Coolers and Equipment category, we expanded our bag offerings with two new sizes of the SideKick Dry. We also introduced new seasonal colorways. During the second quarter of 2024, we continued the expansion of our Drinkware offerings with the launch of our new Rambler French Press in two sizes, the limited release of our Flask and Shot Glasses.
Removed
We believe the improved design of the SideKick Dry gear case and Hopper M Series Soft Cooler line adequately addresses the potential safety concerns caused by the magnet-lined closures of the previous-generation products, which were affected by the product recalls discussed below.
Added
In our Coolers and Equipment category, we expanded our hard cooler offerings with two new sizes within our Roadie cooler family. We also introduced new seasonal colorways.
Removed
We also continued the expansion of our drinkware offerings with the launch of specialty coffee Rambler cups and mugs, introduced a third size of our Rambler Straw Mugs, a new stackable Rambler mug, and our first ever wine chiller and cocktail shaker as part of our tabletop solutions. 35 Table of Contents 2024 Acquisitions During the first quarter of 2024, we completed the acquisitions of Mystery Ranch, Ltd.
Added
During the fourth quarter of 2024, we continued the expansion of our Drinkware category with the launch of our new Rambler Pour Over and Food Storage containers in three sizes, and introduced new seasonal colorways.
Removed
See Note 14—Subsequent Events of the Notes to Consolidated Financial Statements included herein for additional information about these acquisitions. Credit Facility Amendment On March 31, 2023, we amended our senior secured credit agreement (the “Credit Facility”), leaving the material terms of the Credit Facility substantially unchanged, with the exception of certain changes to implement the replacement of LIBOR with SOFR.
Added
During 2024, we integrated Butter Pat, expanding the cookware offerings in our Drinkware category. We also integrated Mystery Ranch operations and products into our business, expanding the bags offerings in our Coolers & Equipment category. During the fourth quarter of 2024, we acquired powered cooling technology patents to develop a unique powered cooler platform.
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On June 22, 2023, we amended our Credit Facility to, among other matters, extend its maturity to June 22, 2028 and increase the commitments under the revolving credit facility (the “Revolving Credit Facility”) from $150.0 million to $300.0 million. For additional information on the Credit Facility, see “Liquidity and Capital Resources - Credit Facility” below.
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See Note 2- Acquisitions of the Notes to Consolidated Financial Statements included herein for additional information about these acquisitions. Product Recall Update In January 2023, we notified the U.S.
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We have developed solutions to address the potential safety concern of the affected products. In the fourth quarter of 2023, we introduced our redesigned and improved versions of the affected products. 36 Table of Contents Macroeconomic Conditions During 2021 and 2022, we experienced challenges associated with the complex and uncertain macroeconomic environment in which we operate.
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During 2024, we experienced higher than anticipated consumer recall participation rates. Based on such experience and trends, we reevaluated our prior assumptions and adjusted our estimated product recall reserve. As a result, we increased the estimated recall expense reserve by $9.9 million during 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+4 added−4 removed3 unchanged
Biggest changeBased on the balance outstanding under our Term Loan A at December 30, 2023, we estimate that a 1% increase or decrease in underlying interest rates would increase or decrease annual interest expense by $0.8 million and $0.9 million for the years ended December 30, 2023 and December 31, 2022, respectively. 44 Table of Contents Inflation Risk Inflationary factors such as increases in the cost of our product and overhead costs may adversely affect our operating results.
Biggest changeBased on the balance outstanding under our Term Loan A at December 28, 2024, we estimate that a 1% increase or decrease in underlying interest rates would increase or decrease annual interest expense by $0.8 million for both the years ended December 28, 2024 and December 30, 2023.
Although inflationary pressures and global supply chain disruption, such as higher inbound transportation costs, did not have a material negative impact on our gross margin in 2023, sustained cost increases, or other inflationary pressures in the future, may have an adverse effect on our ability to maintain or improve current levels of gross margin and SG&A expenses as a percentage of net sales if the selling prices of our products do not increase with these increased costs, or we cannot identify cost efficiencies.
Although inflationary pressures and global supply chain disruption, such as higher inbound transportation costs, did not have a material negative impact on our gross margin in 2024, sustained cost increases, or other inflationary pressures in the future, may have an adverse effect on our ability to maintain or improve current levels of gross margin and SG&A expenses as a percentage of net sales if the selling prices of our products do not increase with these increased costs, or we cannot identify cost efficiencies.
The nature and amount of our long-term debt can be expected to vary as a result of future business requirements, market conditions, and other factors. We may elect to enter into interest rate swap contracts to reduce the impact associated with interest rate fluctuations, but as of December 30, 2023, we have not entered into any such contracts.
The nature and amount of our long-term debt can be expected to vary as a result of future business requirements, market conditions, and other factors. We may elect to enter into interest rate swap contracts to reduce the impact associated with interest rate fluctuations, but as of December 28, 2024, we have not entered into any such contracts.
However, we do not believe there is a significant direct correlation between petroleum or natural gas prices and the costs of our products.
However, we do not believe there is a significant direct correlation between petroleum or natural gas prices and the costs of our products. Foreign Currency Risk We operate in international markets and transact in multiple currencies.
During 2023, net sales from our international entities accounted for 16% of our consolidated net sales, and therefore we do not believe exposure to foreign currency fluctuations would have a material impact on our net sales.
During 2024, net sales from our international entities accounted for 19% of our consolidated net sales, and therefore we do not believe exposure to foreign currency fluctuations has had a material impact on our net sales. Our international businesses operate in functional currencies other than the U.S. dollar (primarily the Canadian dollar, Australian dollar, and Euro).
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Foreign Currency Risk Our international sales are primarily denominated in the Canadian dollar, Australian dollar, Euro, British pound, and New Zealand dollar and any unfavorable movement in the exchange rate between the U.S. dollar and these currencies could have an adverse impact on our revenue.
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Inflation Risk Inflationary factors such as increases in the cost of our product and overhead costs may adversely affect our operating results.
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A portion of our operating expenses are incurred outside the Unites States and are denominated in foreign currencies, which are also subject to fluctuations due to changes in foreign currency exchange rates. In addition, our suppliers may incur many costs, including labor costs, in other currencies.
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As such, we are subject to foreign currency fluctuation risks related our revenue and operating expenses denominated in currencies other than the U.S. dollar. A weakening of currencies relative to the U.S. dollar can have a negative impact to our financial results. Conversely, strengthening of currencies relative to the U.S. dollar can improve financial results.
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To the extent that exchange rates move unfavorably for our suppliers, they may seek to pass these additional costs on to us, which could have a material impact on our gross margin. In addition, a strengthening of the U.S. dollar may increase the cost of our products to our customers outside of the United States.
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We have also experienced, and will continue to experience, fluctuations in our net income as a result of gains (losses) on the settlement and the re-measurement of monetary assets and liabilities denominated in currencies that are not the local currency (primarily consisting of our intercompany balances).
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Our operating results and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates. 45 Table of Contents
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For these intercompany balances at the end of December 28, 2024, a hypothetical 10% decrease in foreign currency exchange rates would result in an increase in our unrealized net loss of approximately $10.6 million. 46 Table of Contents

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