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YETI Q3 Preview: Can Shares Find New Life?

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The Zacks Consumer Discretionary sector has sailed through rough waters in 2022, down more than 35% and widely lagging behind the general market.

A company residing in the realm, YETI Holdings, Inc. (YETI - Free Report) , is slated to unveil Q3 earnings on November 10th, before the market open.

Yeti Holdings, Inc. designs, markets, and distributes products for the outdoor and recreation market under the YETI brand, primarily in the United States.

The company's products are designed for outdoor activities, including recreational and professional pursuits targeting various categories, including hunting, fishing, camping, barbecue, farm and ranch activities, and others.

Currently, the company carries a Zacks Rank #4 (Sell) with an overall VGM Score of a C. How does everything else stack up? Let’s find out.

Share Performance & Valuation

Year-to-date, YETI shares have experienced adverse price action, down more than 60% and widely underperforming the general market.

Zacks Investment Research
Image Source: Zacks Investment Research

Over the last three months, shares haven’t found much relief, down more than 30% and again underperforming the S&P 500.

Zacks Investment Research
Image Source: Zacks Investment Research

The price action of YETI shares indicates that sellers have remained primarily in control, something we’ve seen with many stocks in 2022.

Shares currently trade at a 14.5X forward earnings multiple, a fraction of its 31.9X median since IPO in late 2018 and representing a sizable 29% discount relative to its Zacks sector average of 20.2X.

The company carries a Style Score of a C for Value.

Zacks Investment Research
Image Source: Zacks Investment Research

Quarterly Estimates

A singular analyst has lowered their quarterly earnings outlook over the last several months, with the Zacks Consensus EPS Estimate of $0.60 indicating a Y/Y decline in earnings of roughly 6%.

Zacks Investment Research
Image Source: Zacks Investment Research

YETI’s top-line is in better health; the Zacks Consensus Sales Estimate of $417.8 million for the quarter suggests an improvement of more than 15% from year-ago quarterly sales of $362.6 million.

Quarterly Performance

YETI has primarily exceeded earnings expectations, penciling in nine bottom-line beats across its last ten quarters. Still, the one miss during the period came in its latest print, when the company fell short of EPS expectations by 7.4%.

Sales results paint a similar story; YETI has exceeded revenue estimates in eight of its last ten quarters but fell short of top-line expectations by 1% in its latest print. Below is a chart illustrating the company’s revenue on a quarterly basis.

Zacks Investment Research
Image Source: Zacks Investment Research

Putting Everything Together

YETI shares have underperformed the general market across several timeframes in 2022, indicating that sellers have been in control.

The company’s forward P/E ratio is well off historical levels and beneath its Zacks Consumer Discretionary sector average.

A singular analyst has lowered their earnings outlook as of late, with estimates indicating a Y/Y uptick in revenue and a decline in earnings, likely a reflection of margin compression.

The company has repeatedly beaten quarterly estimates but fell short of earnings and revenue expectations in its latest release.

Heading into the print, YETI Holdings, Inc. (YETI - Free Report) carries a Zacks Rank #4 (Sell) with an Earnings ESP Score of -4.2%.


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