B.Riley reaffirmed its Neutral stance on Yeti Holdings Inc. (NYSE: NYSE:YETI), maintaining a price target of $45.00. The decision follows the observation of Yeti's participation in Amazon (NASDAQ:AMZN)'s Prime Big Deal Days earlier in the week, where the company offered a selection of products at discounted rates.
Yeti Holdings showcased a range of items, focusing on their drinkware product suite, during the sales event. The products, including seasonal hues like Cosmic Lilac and Power Pink, alongside more traditional colors such as Charcoal, were available at a 20% discount. This rate was noted as the lowest among key competing drinkware brands that took part in the event.
Competitors such as Stanley and Hydro Flask, which is owned by Helen of Troy Ltd., also participated in the Prime Big Deal Days. However, Owala was less involved, offering discounts on only a few accessories and ancillary products, including items like dog bowls.
B.Riley's stance on Yeti Holdings remains cautious despite the promotional efforts. The firm cites ongoing concerns about challenges facing consumers and the increasing competition in the market as reasons for their caution. These factors are expected to continue affecting the company's performance in the near future.
In other recent news, Yeti Holdings Inc. reported a robust second quarter for fiscal 2024, with sales growing by 9% to reach $464 million, primarily driven by a 14% increase in the coolers and equipment category and international market expansions. The company's gross profit rose by 14% to $268 million, and operating income increased by 19% to $80 million. Yeti also revised its full-year sales forecast upwards, now expecting an 8%-10% increase.
On the other hand, Canaccord Genuity maintained a Hold rating on Yeti Holdings, citing the company's strategy of introducing new limited-edition colors for its drinkware products. The firm's analysis indicates that Yeti's organic Master Stock Keeping Units (SKUs) have grown by 14% YTD, including the addition of color options and products from recent acquisitions.
Furthermore, Canaccord Genuity maintained its Hold rating on Yeti Holdings stock, expressing caution due to increasing competition in Yeti's core markets and a weakening consumer spending environment. Despite acknowledging Yeti's better-than-expected performance year-to-date and recent product innovations, the firm remains watchful of the challenges Yeti may face.
InvestingPro Insights
To complement B.Riley's analysis of Yeti Holdings Inc. (NYSE: YETI), recent data from InvestingPro offers additional perspective on the company's financial position and market performance.
According to InvestingPro Tips, Yeti holds more cash than debt on its balance sheet, which could provide a financial cushion as it navigates the competitive landscape and consumer challenges noted by B.Riley. This strong liquidity position is further supported by the fact that Yeti's liquid assets exceed its short-term obligations.
In terms of market performance, InvestingPro data indicates that Yeti has shown a strong return over the last month. This recent positive momentum could be partially attributed to the company's strategic participation in events like Amazon's Prime Big Deal Days, where it offered competitive discounts on its popular drinkware products.
It's worth noting that while B.Riley maintains a cautious stance, InvestingPro Tips highlight that analysts predict the company will be profitable this year, and it has been profitable over the last twelve months. This profitability, combined with Yeti's strong balance sheet, may provide some reassurance to investors despite the challenging market conditions.
For readers interested in a more comprehensive analysis, InvestingPro offers 5 additional tips about Yeti Holdings, providing a deeper understanding of the company's financial health and market position.
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