Expectations Reset, Execution Ahead; Key Takeaways From YETI's Investor Day

Last Thursday, we attended YETI's Investor Day hosted at the company's headquarters in Austin, TX. Overall we thought the tone of the day was particularly constructive as management provided greater clarity on the company's strategy to deliver strong top and bottom line growth. Although there was plenty of emphasis on the shift lower in the company's LT sales algorithm, we think this helped eliminate an overhang as the high end of the algorithm appeared aspirational to many. In addition, we think investors likely viewed the updated EPS outlook as encouraging, particularly as it would imply meaningful upside to current Street estimates looking ahead (+LDD to +High Teens CAGR vs. Street numbers implying +HSD growth looking ahead). Should YETI execute on these targets, we think the risk/reward would appear attractive at current levels, but in an environment where the external environment remains uncertain, we think investors will likely wait for greater comfort that these updated targets