Risk Factors Summary
Investing in our securities involves a high degree of risk, and you should consider all information contained in this Report before investing in our securities. Below is a summary of the principal factors that make an investment in our securities speculative or risky, all of which are further described in the “Risk Factors” section in Part I, Item 1A of this Report. This summary should be read in conjunction with the “Risk Factors” section and should not be relied upon as an exhaustive summary of the material risks facing our business.
Risks Related to Our Business, Operations and Industry
• If we fail to attract new customers and maintain our brand image, we may be unable to maintain demand for our products, which could harm our results of operations.
• If we are unable to successfully design, develop and market new products, our business may be harmed.
• Our business could be harmed if we are unable to accurately forecast our results of operations or our growth rate and demand for our products.
• We may not be able to effectively manage our growth.
• We may not be successful in expanding into additional markets.
• If we fail to compete effectively, we could lose our market position.
• Our future success depends on the continuing efforts of our management and key employees and on our ability to attract and retain highly skilled personnel and senior management.
• Unauthorized use or invalidation of our intellectual property or proprietary rights could damage our brand and harm our results of operations.
• We may be subject to liability if we infringe upon the intellectual property rights of third parties.
• Problems with, or loss of, our suppliers or an inability to obtain raw materials could harm our business and results of operations.
• 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 is subject to the risk of manufacturer concentrations.
• Our business could be harmed if we fail to execute our plans to continue expanding our supply chain, technology and certain other business processes to a large global scale.
• If we cannot maintain prices or effectively implement price increases, our margins may decrease.
• Fluctuations in the cost and availability of raw materials, equipment, labor, and transportation could cause manufacturing delays or increase our costs.
• 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.
• Adverse changes in international trade policies, tariffs and treaties, including increases in tariff rates and the imposition of additional tariffs, may materially adversely affect our business and results of operations.
• Our aspirations, disclosures, and actions related to sustainability matters expose us to risks that could adversely affect our reputation and performance.
• Climate change, and related legislative and regulatory responses to climate change, may adversely impact our business.
• If the retail partners in our wholesale channel 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, our brand as well as our results of operations and financial condition could be harmed.
• If we do not successfully navigate risks associated with, or realize sufficient return on investments in, our direct-to-consumer (“DTC”) channel, our business and results of operations could be harmed.
• Operating retail stores incurs substantial fixed costs and if we are unable to generate sales, operate our retail stores profitably, or otherwise fail to meet expectations, we may be unable to reduce such fixed costs and avoid losses or negative cash flows.
• Insolvency, credit problems or other financial difficulties that could confront our retail partners could expose us to financial risk.
• If our independent suppliers and manufacturing partners do not comply with ethical business practices or with applicable laws and regulations, our reputation, business, and results of operations could be harmed.
• 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.
• Our limited operating experience and limited brand recognition in new markets may make it more difficult to execute our international expansion plan and cause our business and growth to suffer.
• Our financial results could be harmed by currency exchange rate fluctuations.
• We may become involved in legal or regulatory proceedings and audits.
• We may be subject to product recalls, warranty liability, product liability, and other claims against us, which could adversely affect our reputation, earnings, and financial condition.
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• Our business is subject to the risk of catastrophic events and to interruption by problems such as terrorism, public health crises, cybersecurity incidents or other cybersecurity threats, or events affecting our information technology systems.
• Our results of operations are subject to seasonal and quarterly variations, which could cause the price of our common stock to decline.
• We are subject to many hazards and operational risks that can disrupt our business, some of which may not be insured or fully covered by insurance.
Risks Related to Market and Global Economic Conditions
• Adverse economic conditions, such as a downturn in the economy or inflationary conditions resulting in rising prices, could adversely affect consumer purchases of discretionary items, which could materially harm our sales, profitability, and financial condition.
• Public health crises could negatively impact our business, sales, financial condition, results of operations and cash flows.
Risks Related to Information Technology and Security
• We rely significantly on information technology, and any compromise or interruption of that technology resulting from cybersecurity incidents, data security breaches, design defects or system failures could have a material negative impact on our business.
• The integration and use of artificial intelligence (“AI”) in our business presents risks and challenges that could adversely affect our business, reputation, and results of operations.
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.
• Our indebtedness may limit our ability to invest in the ongoing needs of our business and if we are unable to comply with the covenants in our current Credit Facility, our liquidity and results of operations could be harmed.
• If our goodwill, other intangible assets, or fixed assets become impaired, we may be required to record a charge to our earnings.
• If our estimates or judgments relating to our critical accounting policies prove to be incorrect or change significantly, our results of operations could be harmed.
• Changes in tax laws or unanticipated tax liabilities could adversely affect our effective income tax rate and profitability.
Risks Related to Ownership of Our Common Stock
• Any future failure to maintain effective internal control over financial reporting could harm us.
• We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term stockholder value, and share repurchases could increase the volatility of the price of our common stock.
• Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of the Company more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our common stock.
• Provisions in our Certificate of Incorporation requiring an exclusive forum for the resolution of specified disputes between us and our stockholders could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
• 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.
Risks Related to Acquisitions, Strategic Transactions, and Stockholder Activism
• Acquisitions or investments in other companies could divert our management’s attention, result in dilution to our stockholders, and otherwise disrupt our operations and harm our results of operations.
• We may be the target of strategic transactions, which could divert our management’s attention and otherwise disrupt our operations and adversely affect our business.
• We may be the target of stockholder activism, an unsolicited takeover proposal, a proxy contest, or short sellers, which could negatively impact our business.
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WEBSITE REFERENCES
In this Annual Report on Form 10-K, we make references to our website at YETI.com. References to our website throughout this Form 10-K are provided for convenience only and the content on our website does not constitute a part of, and shall not be deemed incorporated by reference into, this Annual Report on Form 10-K.
TRADEMARKS AND SERVICE MARKS
Solely for convenience, certain trademark and service marks referred to in this Annual Report on Form 10-K appear without the ® or ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and service marks. This Annual Report on Form 10-K may also contain additional trademarks or service marks of other companies, which are the property of their respective owners.
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PART I
Item 1. Business
Overview
Headquartered in Austin, Texas, YETI is a global designer, retailer, and distributor of innovative outdoor products. From coolers and drinkware to bags and apparel, YETI products are built to meet the unique and varying needs of diverse outdoor pursuits, whether in the remote wilderness, at the beach, or anywhere life takes you. By consistently delivering high-performing, exceptional products, we have built a strong following of brand loyalists throughout the world, ranging from serious outdoor enthusiasts to individuals who simply value products of uncompromising quality and design. 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 were founded in 2006 by avid outdoorsmen, Roy and Ryan Seiders, who were frustrated with equipment that could not keep pace with their interests in hunting and fishing. By utilizing forward-thinking designs and advanced manufacturing techniques, they developed a nearly indestructible hard cooler with superior ice retention. Our original hard cooler not only delivered exceptional performance, it anchored an authentic, passionate, and durable bond among customers and our company.
Our principal corporate offices are located in Austin, Texas. Unless the context requires otherwise, references to “YETI,” the “Company,” “we,” “us,” and “our” used herein refer to YETI Holdings, Inc. and its consolidated subsidiaries.
We have a 52- or 53-week fiscal year that ends on the Saturday closest in proximity to December 31, such that each quarterly period will be 13 weeks in length, except during a 53-week year when the fourth quarter will be 14 weeks. Our fiscal year ended January 3, 2026 (“2025”) was 53 weeks. Our fiscal years ended December 28, 2024 (“2024”) and December 30, 2023 (“2023”) were 52 weeks each. 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.
Our Products
Our product portfolio consists of three categories: Coolers & Equipment; Drinkware; and Other. 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 2025, net sales of Coolers & Equipment, Drinkware, and Other represented 40%, 58%, and 2% of net sales, respectively. Refer to Note 3 of the Notes to Consolidated Financial Statements for net sales by product category.
Coolers & Equipment
Our Coolers & Equipment category consists of seven platforms: hard coolers, soft cooler bags, everyday bags, travel bags, pursuit bags, cargo and storage, and outdoor living.
Hard Coolers. Our hard coolers are built with seamless rotomolded construction or injection molding construction, making them nearly indestructible. 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 2025, we introduced the redesigned Roadie 24 within our Roadie cooler family. Our hard cooler platform includes the 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 Cooler Bags. Our soft cooler bags platform consists of our Hopper Collection and Daytrip Collection of soft cooler bags. The Hopper Collection is our line of soft cooler bags designed to be leakproof and provide superior durability and ice retention compared to ordinary soft cooler bags. The Hopper Collection includes the M15 Soft Cooler, M12 Soft Backpack Cooler, M30 Soft Cooler, M20 Backpack Cooler, and the Flip Soft Cooler. The Daytrip Collection is built for all-day use and consists of ultra-portable insulated soft cooler bags. In 2025, we expanded our Daytrip Collection with the launch of the Lunchboxes in two sizes, Lunch Bag, and Tote Bag.
Bags. Our bags offerings span three platforms covering everyday, travel, and pursuit bags. These offerings include the Panga Collection of waterproof duffel bags and backpacks, Crossroads Collection of backpacks, duffel bags, luggage, and packing cubes, Camino Carryall, and SideKick Dry gear case. In 2025, we expanded our bags offerings with the new Cayo Collection of all-weather backpacks in three sizes and Ranchero Collection of backpacks in four sizes.
Cargo and Storage. We offer a range of cargo and storage solutions including: the LoadOut GoBox in multiple sizes, LoadOut Bucket, and LoadOut Swivel Seat. In 2025, we also expanded our cargo offerings with the smaller format LoadOut GoBox.
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Outdoor Living. Our outdoor living platform includes the Trailhead Camp Chair, Lowlands Blanket, and Boomer Dog Bowls. In 2025, we also expanded our outdoor living offerings with the new Hondo Beach Chair, a limited release of the Can Crusher, and the YETI Fire Pit.
Drinkware
Our Drinkware category consists of four platforms: bottles and jugs, cups, mugs, and tumblers, tableware, coffeeware, barware, and containers, and cookware. 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.
Bottles and Jugs. Our bottles and jugs platform includes the Rambler Collection of bottles and jugs, Yonder Collection of water bottles and shaker bottles, and Silo Collection of jugs. In 2025, we expanded this platform with the launch of the Rambler Travel Bottle in three sizes, Yonder Shaker Bottle in two sizes, Silo Jug with Straw Cap in two sizes, Silo Jug with Chug Cap, and introduced the redesigned Rambler Jug in two sizes.
Cups, Mugs, and Tumblers. Our cups, mugs, and tumblers platform includes the Rambler Collection of Stackable Pints, Mugs, Tumblers, and Cups. In 2025, we expanded this platform with the launch of the Rambler Travel Straw Mug in three sizes and Rambler Junior Tumbler with Silicone Straw.
Tableware, Coffeeware, Barware, and Containers. Our tableware, coffeeware, barware, and containers platform offers a broad range of Rambler products, including Insulated Bowls and Food Jars, ceramic-lined Mugs and Stackable Cups, French Presses, Pitchers, Wine Chillers, Wine Tumblers, the Beverage Bucket, Colsters, and the Cocktail Shaker. In 2025, we expanded this platform with the launch of the Rambler Insulated Bowls in six sizes, Rambler Food Jars in three sizes, YETI Food Storage containers in three sizes, Rambler Ceramic Mug in two sizes, and a new size of the Rambler Ceramic Stackable Cup.
Cookware. Our cookware platform launched in 2024 with the introduction of our Cast Iron Skillet in three sizes. In 2025, we expanded this platform with the launch of a new size of our Cast Iron Skillet, the new Cast Iron Ranch Pan, and a limited release of the new Carbon Steel Pan.
Other
Our Other category consists of two platforms: apparel and other. Apparel offers an array of hats, shirts and sweatshirts, while other includes ice substitutes and other YETI branded products.
Segment Information
We operate as one reportable operating segment.
Sales Channels
We offer our products in the United States, Canada, Australia, New Zealand, the United Kingdom, Europe, and Japan, among others, through a diverse omni-channel strategy, comprised of our wholesale and our direct-to-consumer (“DTC”) channels. In 2025 and 2024, our DTC channel accounted for 60% and 59% of our net sales, respectively, and our wholesale channel accounted for 40% and 41% of our net sales, respectively. As part of our commitment to premium positioning, we maintain supply discipline, primarily sell through one-step distribution, and partner with retailers who agree to follow our terms and conditions, including compliance with our pricing policies where markets allow.
In our wholesale channel, we sell to several large retailers in the United States, including Dick’s Sporting Goods, REI, Academy Sports + Outdoors, Bass Pro Shops, Ace Hardware, Scheels, and Tractor Supply Company, and an assemblage of independent retail partners throughout the United States, Canada, Australia, New Zealand, the United Kingdom, Europe, and Japan, among others. In our international regions, our notable retailers include FGL Sports and SportChek in Canada, BCF and Rebel in Australia, and GO Outdoors in the United Kingdom. We carefully evaluate and select retail partners that have an image and approach that are consistent with our premium brand and pricing, while also seeking new retail partners that create access to unique shopping experiences or customer bases. We offer customized products with licensed marks to certain wholesale partners. Our network of independent retail partners includes outdoor specialty, hardware, sporting goods, and farm and ranch supply stores, among others. As of January 3, 2026, we sold through a diverse base of approximately 5,300 retail partners worldwide. No single customer accounted for 10% or more of our gross sales in 2025.
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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. 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. 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. We believe our control over our DTC channel provides our customers the highest level of brand engagement and further builds customer loyalty.
Our Market
Our premium products are designed for use in a wide variety of activities, from professional to recreational and outdoor to indoor, and can be used year round. 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 79% of our net sales for 2025, while our international sales represented 21% of our 2025 net sales. We continue to expand internationally and grow our presence in Canada, Australia, New Zealand, Asia, the United Kingdom, and Europe, among other countries and regions. We are expanding internationally by focusing on brand awareness, wholesale expansion, and our DTC channel. 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.
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.
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, advanced design and manufacturing processes, and leverage strategic acquisitions to create premium products that redefine consumer expectations and deliver best-in-class product 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. 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. We collaborate with our YETI Ambassadors, a diverse group of people throughout the world, comprised of elite anglers, hunters, rodeo cowboys, chefs, 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. 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 use a combination of traditional, digital, and 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. 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. 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. We do not directly source significant amounts of these raw materials and components.
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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. 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. Additionally, we work closely with our manufacturing partners regarding product quality and manufacturing process efficiency.
Many of our core products are manufactured in China, Thailand, Malaysia, Vietnam, the Philippines, Mexico, and Poland. We regularly evaluate the performance and capacity at our manufacturing partners’ facilities. We hold our manufacturers to rigorous quality and product conformance standards through frequent involvement and regular product inspecting. We own the molds and tooling used in the production of our products, create and provide the specifications for our products, and work closely with our manufacturing partners to improve production yields and efficiency. Our manufacturers do not have unique skills, technologies, processes, or intellectual property that prevent us from migrating to other manufacturing partners.
To ensure consistent product quality, we provide detailed specifications for our products and inspect finished goods both at our manufacturing partners as well as periodically upon delivery to our third-party logistics partners. As part of our quality assurance program, we have developed and implemented comprehensive product inspection and facility oversight processes that are performed by our employees and third-party service providers who work closely with our suppliers to assist them in meeting our quality standards, as well as improving their production yields and throughput.
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, Japan, and the Netherlands to support our international operations. These logistics providers manage various distribution activities, including product receipt, warehousing, certain limited product inspection activities, and coordinating outbound shipping.
We manage our inventory levels by analyzing product sell-through, forecasting demand, and placing orders with our manufacturers before we receive firm orders from customers to ensure sufficient availability.
Competition
We compete in the large outdoor and recreation market as well as other related markets. Competition in our markets is based on a number of factors, including product quality, performance, durability, styling, and price, as well as brand image and recognition. We believe that we have been able to compete successfully on the basis of our brand, superior design capabilities and product development, our DTC capabilities, as well as the breadth of our national, regional, and independent retail partners.
In the Coolers & Equipment category, we compete against established, well-known, and legacy cooler brands, such as Igloo and Coleman, numerous newer brands that have emerged after the popularity of YETI products, such as Stanley and SharkNinja, as well as private label brands. In the Drinkware category, we compete against well-known brands such as HydroFlask, Stanley, Owala, and HydroJug, as well as numerous other brands and retailers that offer competing products.
The outdoor and recreation market is highly fragmented and highly competitive, with low barriers to entry. Our current and potential competitors may be able to develop and market superior products or sell similar products at lower prices. These companies may have competitive advantages, including larger retailer bases, global product distribution, greater financial strength, superior relations with suppliers and manufacturing partners, or larger marketing budgets and brand recognition.
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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 2025, our net sales in the first, second, third, and fourth quarters represented 19%, 24%, 26%, and 31%, respectively, of our total net sales for the year. 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.
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 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. 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. For example, we have a proactive online marketplace monitoring and seller/listing termination program to disrupt online counterfeit or otherwise infringing 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. We intend to continue to seek intellectual property protection for our new products and enforce our rights against those who on these 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 enjoy life outdoors and beyond. We are proud of our unique company culture, where ideas, innovation, collaboration, and personal development are essential. We believe our brand and culture are central to our success and our ability to attract, develop, motivate, and retain highly skilled talent. 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 January 3, 2026, we employed approximately 1,390 people worldwide, representing twelve countries. Of these, approximately 83% 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 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 . 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 productive, creative, happy, and healthy.
Learning and Development . 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.
For more information regarding our programs and practices related to human capital management, please see the “People” section of our 2025 Sustainability Report (“Sustainability Report”), located on our website at www.yeti.com/wild.html. Our Sustainability Report does not constitute part of, and shall not be deemed to be incorporated by reference into, this Annual Report on Form 10-K.
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Compliance with Government Regulations
Our business activities are global and are subject to various federal, state, local, and foreign laws, rules and regulations. For example, substantially all of our import operations are subject to complex trade and customs laws, regulations and tax requirements. In addition, the countries in which our products are manufactured or imported may from time to time impose additional duties, tariffs or other restrictions on our imports or adversely modify existing restrictions. 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. Compliance with laws, rules and regulations could harm our current and future business and operations. For additional information, see Part I, Item 1A, “Risk Factors - Risks Related to Our Business, Operations and Industry,” included herein for updates to our risk factors regarding the potential impact of government regulations on our business.
Available Information
We file annual, quarterly and current reports and other documents with the United States Securities and Exchange Commission (the “ SEC ”) under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ” ). The public can obtain any documents that we file with the SEC at www.sec.gov. We also make available free of charge our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after filing such materials with, or furnishing such materials to, the SEC, on or through our website, www.YETI.com. We are not including the information contained on, or accessible through, any website as a part of, or incorporating it by reference into, this Report, unless expressly noted.
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Item 1A. Risk Factors
Our business, financial condition and operating results can be affected by a number of risks and uncertainties, whether currently known or unknown, any one or more of which could, directly or indirectly, cause our actual results of operations and financial condition to vary materially from past, or from anticipated future, results of operations and financial condition. The risks discussed below are not the only ones facing our business but do represent those risks that we believe are material to us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also adversely affect our business, financial condition and results of operations.
Risks Related to Our Business, Operations and Industry
Our business depends on maintaining and strengthening our brand to attract new customers and generating and maintaining ongoing demand for our products, and a significant reduction in such demand could harm our results of operations.
The YETI name and premium brand image are integral to the growth of our business, as well as to the implementation of our strategies for expanding our business. Our success depends on the value and reputation of our brand, which is rooted in passion for the outdoors. To sustain long-term growth, we must continue to successfully promote our products to consumers who align with the values of our brand, as well as to individuals who simply value products of uncompromising quality and design. Our ability to execute our marketing and growth strategy depends on many factors, such as the quality, design, performance, functionality, and durability of our products; the image and reputation of our e-commerce platform; the design of our retail floor spaces and our wholesale partners’ floor spaces; the impact of our communication activities, including advertising, social media, and public relations; and our management of the customer experience, including direct interfaces through customer service. Maintaining, promoting, and positioning our brand are important to expanding our customer base and will depend largely on the success of our marketing and merchandising efforts and our ability to provide consistent, high-quality customer experiences.
We have made, and we expect that we will continue to make, significant investments in promoting our products and attracting new customers, including through the use of corporate and sports league partnerships, YETI Ambassadors, traditional, digital, and social media, original YETI films, and participation in, and sponsorship of, community events. Marketing campaigns can be expensive and may not result in the cost-effective acquisition of customers. Ineffective marketing, ongoing and sustained promotional activities, negative publicity, product diversion to unauthorized distribution channels, product or manufacturing defects, product recalls, counterfeit products, unfair labor practices, and failure to protect the intellectual property rights in our brand are some of the potential threats to the strength of our brand, and those and other factors could rapidly and severely customer confidence in us. Furthermore, these factors could cause our customers to the personal connection they feel with the YETI brand. The rapid diffusion of information through social media also heightens the risk that publicity—whether accurate or not—regarding product performance, Ambassador conduct, company policies or sourcing practices could quickly brand equity. Actions by individuals or organizations associated with YETI (including Ambassadors and influencers) that are with our brand values, whether on our platforms or theirs, could also our brand reputation and materially impact our business. Further, now that our brand is more widely known in our established markets, future marketing campaigns may not attract new customers at the same rate as past campaigns. Inflation, higher product costs or other macroeconomic factors may also affect our ability to provide products in a cost- manner and us from attracting new customers. If we are to attract new customers, to attract new customers in a cost- manner, or to drive awareness of our full product portfolio among new and existing customers, our growth could be than we expect, and our business could be .
If we are unable to successfully design, develop and market new products, our business may be harmed.
The market for our products is characterized by new product introductions, frequent enhancements, customization options, new colorways for existing products, and changing customer demands, needs and preferences. This is emphasized by the fact that our products are high-quality, durable, and do not have a natural replacement cycle. Shorter innovation cycles and the growing influence of social-media reviews further increase the risk that new products will not achieve anticipated acceptance or that our intellectual-property safeguards will be circumvented. 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. The success of our new and enhanced products depends on many factors, including anticipating consumer preferences, finding innovative solutions to consumer problems, differentiating our products from those of our competitors, maintaining the strength of our brand, onboarding new manufacturing processes and suppliers, and product lifecycle management. The design and development of our products is , and we typically have several products in development at the same time. Design or quality issues, or in launching new products, could our brand, our business, and affect our financial condition and results of operations. Any new products that we develop and market may not generate sufficient revenues to recoup their development, production, marketing, selling and other costs.
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Our business could be materially harmed if we are unable to accurately forecast our growth rate and demand for our products.
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. Our historical sales, expense levels, and profitability may not be an appropriate basis for forecasting future results. If we fail to accurately forecast customer demand, including relating to our expected growth, we may experience excess inventory levels or a shortage of products to deliver to our customers. Failure to accurately forecast our results of operations and growth rate could also cause us to make poor operating decisions, and we may not be able to adjust in a timely manner. Consequently, actual results could be materially lower than anticipated. Even if the markets in which we compete expand, we cannot assure you that our business will grow at similar rates, or at all.
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 predict 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, public health crises, or geopolitical conflicts, which could adversely affect consumer confidence and spending or production and distribution of product and raw materials.
Inventory levels in excess of customer demand may result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices or in less preferred distribution channels, which could impair our brand image and harm our gross margins. 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.
Difficulty in forecasting demand also makes it difficult to estimate our future results of operations and financial condition from period to period. A failure to accurately predict the level of demand for our products could adversely impact our profitability or cause us not to achieve our expected financial results.
We may not be able to effectively manage our growth.
As we grow our business, slower growing or reduced demand for our products, increased competition, a highly promotional environment, a decrease in the growth rate of our overall market, failure to develop and successfully market new products, or the maturation of our business or market could harm our business. We have made and expect to continue to make significant investments in our business, including in particular expanding our operations and infrastructure internationally. We also intend to continue to design, develop, and market new products and make enhancements to our existing products. If our sales do not increase at a sufficient rate to offset these increases in our operating expenses, our profitability may decline in future periods.
As we continue to expand our operations, headcount, geographical footprint, and product offerings, the scope and complexity of our business continues to increase. Consequently, we may experience difficulties in managing our growth and building the appropriate processes and controls. Future growth may increase the strain on our resources. We could experience operating difficulties, including difficulties in sourcing, logistics, recruiting, marketing, designing innovative products, and meeting consumer needs. We could also experience difficulties maintaining disclosure controls and procedures and internal controls. If we do not adapt to meet these evolving challenges, the strength of our brand may erode, the quality of our products may suffer, we may not be able to deliver products on a timely basis to our customers, and our corporate culture may be harmed.
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Our growth depends, in part, on expanding into additional consumer markets, and we may not be successful in doing so.
We believe that our future growth depends not only on continuing to reach our existing retail partners and customers but also on continuing to broaden our retail partner and customer base. 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 these international markets, we face challenges that are at times different from those we 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. We continue to evaluate and invest in sales and marketing efforts and other strategies to expand the customer base for our products, but we may not be successful. If we are not successful, our business and results of operations may be harmed.
The markets in which we compete are highly competitive and include numerous other brands and retailers that offer a wide variety of products that compete with our products; if we fail to compete effectively, we could lose our market position.
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, cookware, 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. Our competitors may be able to develop and market higher quality products that compete with our products, sell their products for lower prices, use more promotions, adapt to changes in consumers’ needs and preferences more quickly, devote greater resources to the design, sourcing, distribution, marketing, and sale of their products, or generate greater brand recognition than us. In addition, as we expand into new product categories, we have faced, and will continue to face, different and, in some cases, more formidable competition. We believe many of our competitors and potential competitors have significant competitive advantages, including longer operating histories, ability to leverage their sales efforts and marketing expenditures across a broader portfolio of products, more mature global product distribution, larger and broader bases of retail partners, more established relationships with a larger number of suppliers and manufacturing partners, brand recognition, larger or more brand ambassador and endorsement relationships, financial , larger research and development teams, larger marketing budgets, and more distribution and other resources than we do. Some of our competitors aggressively discount their products or offer other sales terms in order to market share, which could result in pricing pressures, reduced profit margins, or market share. For example, if our retail partners were to demand higher discounts, we may be to lower our gross margins on products sold through such partners. The competitive landscape is in the United States and the growth of our business in international markets may not offset any growth in the United States. If we are not to these potential competitive , effectively market our current and future products, and otherwise compete effectively our current or potential competitors, our prospects, results of operations, and financial condition could be .
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, such as AI. If we are unable to develop and continuously improve our technologies, the efforts of which typically require significant capital investments, we may not be able to provide a convenient and consistent experience to our customers, which could negatively affect our ability to compete with other retailers and could result in diminished loyalty to our brands, which could adversely impact our business.
Our future success depends on the continuing efforts of our management and key employees and on our ability to attract and retain highly skilled personnel and senior management.
We depend on the talents and continued efforts of our senior management and key employees. The loss of members of our management or key employees may disrupt our business and harm our results of operations. Furthermore, our ability to manage further expansion will require us to continue to attract, motivate, and retain additional qualified personnel. Competition for this type of personnel is intense, and we may not be successful in attracting, integrating, and retaining the personnel required to grow and operate our business effectively. There can be no assurance that our current management team or any new members of our management team will be able to successfully execute our business and operating strategies.
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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.
Our competitors have imitated or attempted to imitate, and will likely continue to imitate or attempt to imitate, our product designs and branding, which could harm our business and results of operations. Only a portion of the intellectual property used in the manufacture and design of our products is patented, and we therefore rely significantly on trade secrets, trade and service marks, trade dress, and the strength of our brand. We regard our patents, trade dress, trademarks, copyrights, trade secrets, and similar proprietary rights as critical to our success. We also rely on trade secret protection and confidentiality agreements with our employees, consultants, suppliers, manufacturers, and others to protect our proprietary rights. Nevertheless, the steps we take to protect our proprietary rights against infringement or other violation may be inadequate, and we may experience difficulty in effectively limiting the unauthorized use of our patents, trademarks, trade dress, and other intellectual property and proprietary rights worldwide. We also cannot guarantee that others will not independently develop technology with the same or similar function to any proprietary technology we rely on to conduct our business and differentiate ourselves from our competitors. Because a significant portion of our products are manufactured overseas in countries where is more prevalent, and we intend to increase our sales overseas over the long term, we may experience increased of our products. Furthermore, in generative AI and other digital technologies may the creation of highly convincing products, fake listings, and sophisticated schemes on online marketplaces and social media platforms, increasing the and cost of enforcement. use or of our patents, trademarks, copyrights, trade dress, trade secrets, or other intellectual property or proprietary rights may cause significant to our brand and our results of operations.
While we actively develop and protect our intellectual property rights, there can be no assurance that we will be adequately protected in all countries in which we conduct our business or that we will prevail when defending our patent, trademark, and proprietary rights. Additionally, we could incur significant costs and management distraction in pursuing claims to enforce our intellectual property rights through litigation and defending any alleged counterclaims. Our opportunities for obtaining and enforcing intellectual property rights may change because of changes in laws in the United States and other jurisdictions. If we are unable to protect or preserve the value of our patents, trade dress, trademarks, copyrights, or other intellectual property rights for any reason, or if we fail to maintain our brand image due to actual or perceived product or service quality issues, adverse publicity, governmental or , or other reasons, our brand and reputation could be , and our business may be .
We may be subject to liability if we infringe upon the intellectual property rights of third parties.
Third parties have sued us and may in the future sue us for alleged infringement of their proprietary rights. The party claiming infringement might have greater resources than we do to pursue its claims, and we have been, and may in the future be, forced to incur substantial costs and devote significant management resources to defend against such litigation, even if the claims are meritless and even if we ultimately prevail. If the party claiming infringement were to prevail, we could be forced to modify or discontinue our products, pay significant , or enter into expensive royalty or licensing arrangements with the prevailing party. In addition, any payments we are required to make, and any we are required to comply with as a result of such , could our reputation and financial results.
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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.
Our products are produced by third-party contract manufacturers, typically through a series of purchase orders. Manufacturers may breach our agreements with them, including purchase orders, and we may not be able to enforce our rights under these agreements or may incur significant costs attempting to do so. We therefore face the risk that these third-party contract manufacturers may not produce and deliver our products in adequate quantities, on a timely basis or at all, or that they will fail to comply with our quality standards. We have experienced, and will likely continue to experience, operational difficulties with our manufacturers. These difficulties include reductions in the availability of production capacity, errors in complying with product specifications and regulatory and customer requirements, insufficient quality control, failures to meet production deadlines, failure to achieve our product quality standards, increases in costs of materials, and manufacturing or other business . The ability of our manufacturers to effectively our production requirements could also be impacted by manufacturer financial or to their operations caused by fire, terrorist attack, riots, natural , public health emergencies, or other events. The of any manufacturer to perform to our expectations could result in supply or for certain products and our business. If we experience significantly increased demand, or if we need to replace an existing manufacturer due to of performance, we may be to supplement or replace our manufacturing capacity on a timely basis or on terms that are acceptable to us, which may increase our costs, reduce our margins, and our ability to deliver our products on time. For certain of our products, it may take a significant amount of time to identify and qualify a manufacturer that has the capability and resources to produce our products to our specifications in sufficient volume and our service and quality control standards. In addition, our manufacturers may raise prices in the future, which would increase our costs and our margins. Any of these risks could our ability to deliver our products on time, or at all, our reputation and our relationships with our retail partners and customers, and increase our product costs thereby reducing our margins.
The capacity of our manufacturers to produce our products is also dependent upon the availability of raw materials, including rare earth minerals. 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. Any shortage of raw materials or inability of a manufacturer to produce or ship our products in a timely manner, or at all, could impair our ability to ship orders of our products in a cost-efficient, timely manner and could cause us to miss the delivery requirements of our customers. 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. 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. 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 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.
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, the Netherlands, and Vietnam to support our international operations. 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.
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We import our products and rely on the timely and free flow of goods through open and operational ports from our suppliers and manufacturers. Accordingly, we are subject to certain risks associated with our third-party contract manufacturers’ and carriers’ ability to provide products and services to meet our requirements, including labor disputes, union organizing activity, inclement weather, public health crises, and increased transportation costs. Such events could result in delayed or canceled orders by customers, unanticipated inventory accumulation or shortages, and harm to our business, results of operations, and financial condition. We are also vulnerable to risks associated with products manufactured abroad, including, among other things: (a) risks of damage, destruction, or confiscation of products while in transit to our distribution centers; and (b) transportation and other delays in shipments, including as a result of heightened security screening, port congestion, container and labor , and inspection processes or other port-of-entry or restrictions. Global events may also impact the import of our products. For example, in response to ongoing geopolitical , 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 , or both. In addition, geopolitical near key global shipping areas may shipping routes, causing and increased freight costs. Although we have continued to experience such effects with respect to the ongoing in the Red Sea, such effects have not materially impacted our business to date.
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 addition, we rely upon independent land-based and air freight carriers for product shipments from our distribution centers to our retail partners and customers who purchase through our DTC channel. We may not be able to obtain sufficient freight capacity on a timely basis or at favorable shipping rates and, therefore, may not be able to receive products from suppliers or deliver products to retail partners or customers in a timely and cost-effective manner. 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.
We are exposed to risk due to our relative concentration of business activity with certain third-party contract manufacturers of our products. Our business and operations would be negatively affected if any of our key manufacturers were to experience significant disruption affecting the price, quality, availability, or timely delivery of products. Our manufacturers could also be acquired by our competitors and may become our direct competitors, thus limiting or eliminating our access to manufacturing capacity. The partial or complete loss of our key manufacturers, or a significant adverse change in our relationship with any of these manufacturers, could result in lost sales, added costs, and distribution delays that could harm our business and customer relationships.
Our business could be harmed if we fail to execute our plans to continue expanding our supply chain, technology and certain other business processes to a large global scale.
We continually assess, and re-engineer as needed, our supply chain management, technology, and business processes to support our expanding scale. Our global expansion plans require significant investment of capital and human resources, the adaptation and evolution of many business processes and technology, and the attention of many employees who would otherwise be focused on other aspects of our business. In particular, inadequate implementation of new technology or execution of modifications or upgrades to existing technology, or poor organizational change management could harm ongoing business operations or impede new business capabilities. While executing on such technology initiatives, we need to manage key business functions globally with platforms and process at scale; ensure responsiveness, resiliency and business continuity; adopt emerging technologies; and maintain readiness to withstand and recover from cybersecurity and information technology threats. If our globalization efforts fail to produce planned efficiencies, or are not managed effectively, we may experience excess inventories, inventory shortage, late deliveries, sales, or increased costs. Any business arising from our globalization efforts, or our to effectively execute our global expansion plans, could our results of operations and financial condition.
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If we cannot maintain prices or effectively implement price increases, our margins may decrease.
Our ability to maintain prices or effectively implement price increases may be affected by several factors, including pricing pressure due to intense competition in the retail industry, effectiveness of our marketing programs, the continuing growth of our brand, general economic conditions, and changes in consumer demand. During challenging economic times, consumers may be less willing or able to pay a price premium for our branded products and may shift purchases to lower-priced or other value offerings, making it more difficult for us to maintain prices and/or effectively implement price increases. In addition, our retail partners and distributors may pressure us to rescind price increases we have announced or already implemented, whether through a change in list price or increased promotional activity. If we cannot maintain prices or effectively implement price increases for our products, or must increase promotional activity, our margins may be adversely affected. 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 affected.
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. In addition, the cost of labor at our third-party contract manufacturers and third-party logistics providers could increase significantly. Additionally, the cost of logistics and transportation fluctuates due to a number of factors, including the price of oil, available capacity, market demand, and geopolitical events. Global political conditions, threatened or actual acts of war or terrorism, instability or other disruptions in areas such as the South China Sea, 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. Any fluctuations in the cost and availability of any of our raw materials or other sourcing or transportation costs related to our raw materials or products could harm our gross margins and our ability to meet customer demand.
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.
Our reliance on suppliers and manufacturers in foreign markets creates risks inherent in doing business in foreign jurisdictions, including: (a) the burdens of complying with a variety of foreign laws and regulations, including trade and labor restrictions and laws relating to the importation and taxation of goods; (b) weaker protection for intellectual property and other legal rights than in the United States, and practical difficulties in enforcing intellectual property and other rights outside of the United States; (c) compliance with U.S. and foreign laws relating to foreign operations, including the U.S. Foreign Corrupt Practices Act (“FCPA”), the UK Bribery Act 2010 (“Bribery Act”), regulations of the U.S. Office of Foreign Assets Controls (“OFAC”), and U.S. anti-money laundering regulations, which respectively prohibit U.S. companies from making improper payments to foreign officials for the purpose of obtaining or retaining business, operating in certain countries, or maintaining business relationships with certain restricted parties as well as engaging in other corrupt and practices; (d) economic and political and acts of terrorism in the countries where our suppliers are located; (e) public health , such as pandemics and epidemics, in the countries where our suppliers and manufacturers are located; (f) transportation or increases in transportation costs; and (g) the imposition of tariffs or non-tariff on components and products that we import into the United States or other markets. Further, we cannot you that our directors, officers, employees, representatives, manufacturers, or suppliers have not engaged and will not engage in conduct for which we may be held responsible, nor can we you that our manufacturers, suppliers, or other business partners have not engaged and will not engage in conduct that could materially their ability to perform their contractual obligations to us or even result in our being held liable for such conduct. of the FCPA, the Act, OFAC restrictions, or other export control, anti-, anti-money , and anti-terrorism laws or regulations may result in or civil , and we may be subject to other related liabilities, which could our business, financial condition, cash flows, and results of operations.
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Adverse changes in international trade policies, tariffs and treaties, including increases in tariff rates and the imposition of additional tariffs, may materially adversely affect our business and results of operations.
Most of our imported products are subject to tariffs, duties, indirect taxes, quotas and non-tariff trade barriers, any of which may limit the quantity of products that we may import into the United States and other countries or may impact the cost of such products. To maximize opportunities, we rely on free trade agreements and other supply chain initiatives, and, as a result, we are subject to government regulations and restrictions with respect to our cross-border activity. Additionally, we are subject to government regulations relating to importation activities, including related to U.S. Customs and Border Protection (“CBP”) withhold release orders. The imposition of additional tariffs, taxes, duties and quotas, the withdrawal from or the material modification to trade agreements, retaliatory actions from other countries, failure to report or inaccuracies in processing transactions with CBP 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. In addition, a change in available exemptions, an increase in tariffs on countries where our products are manufactured, or retaliatory actions from other countries could constrain our supply chain and raise the cost of our products.
During 2025, the U.S. government implemented incremental tariffs on imports from many countries. Most of our products are produced in countries that were subject to these tariffs. As a result, in 2025, the cost to import our products into the United States increased, which had a material negative impact on our gross margins and results of operations in 2025. On February 20, 2026, the U.S. Supreme Court invalidated tariffs imposed under the International Emergency Economic Power Act (the “IEEPA Decision”). There remains significant uncertainty regarding the implementation of the IEEPA Decision, including the processes that will govern refund claims, the timing of any potential refunds, and the ultimate amounts, if any, that we may recover. In addition, immediately following the IEEPA Decision, the U.S. government initiated new tariffs under alternative authorities, resulting in continued tariff exposure for many of our products. There remains significant uncertainty regarding the duration and scope of these newly initiated tariffs, whether the U.S. government will pursue additional trade actions or impose further tariffs, and the impact of such conditions on our business. Any such uncertainties and developments could materially affect our business or financial results.
Tariffs have potential tangential economic impacts that may also harm our business. If businesses are forced to raise their prices in response to tariffs or other factors, higher prices for consumers may lead to a decrease in disposable consumer income and reduced consumer demand for many types of products, including ours. Demand for our products could also be harmed if the indirect impacts of tariffs cause a recession and there is a decrease in consumer discretionary spending.
Given the uncertainty regarding the scope and duration of the current and potential tariffs, as well as the potential for additional trade actions by the United States or other countries, the ultimate impact on our business and results of operations is uncertain but could continue to be material or worsen.
Our aspirations, disclosures, and actions related to sustainability 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 sustainability matters continue to evolve rapidly (for definitional purposes, our references to “sustainability” are intended to encompass a range of topics including human capital, governance, and climate). Failure to meet these expectations or to comply with emerging sustainability regulations could adversely affect our reputation, access to capital, and business opportunities. We announce initiatives related to sustainability matters from time to time and have established and publicly announced certain sustainability goals. These statements reflect our current plans and aspirations and are not guarantees that we will be able to achieve them. Our ability to achieve any sustainability objective is subject to numerous risks, many of which are outside of our control. 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 could expose us to increased from the investment community as well as enforcement authorities. In addition, we could be for the scope of our sustainability initiatives or goals.
Different stakeholder groups have divergent or conflicting views on sustainability matters, simultaneous demands for greater transparency and reduced administrative cost, and a proliferating patchwork of climate-related disclosure mandates, which increase the risk that any action or lack thereof with respect to sustainability matters will be perceived negatively by at least some stakeholders and adversely impact our reputation and business. If we do not successfully manage sustainability-related expectations, or if there is perceived non-compliance across these varied stakeholder interests, we may face scrutiny, reputational risk, lawsuits, or market access restrictions from these parties regarding our sustainability initiatives.
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Globally, a lack of harmonization and the rapid evolution in relation to sustainability legal and regulatory reform across the jurisdictions in which we may operate may affect our future implementation of, and compliance with, sustainability standards and requirements. Standards for tracking and reporting sustainability matters are relatively new and continue to evolve. Collecting, measuring, and reporting sustainability information and metrics can be difficult and time consuming. 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 us and other companies in the same industry. In addition, our processes and controls may not comply with evolving standards for identifying, measuring and reporting sustainability metrics, including sustainability-related disclosures that may be required of public companies by the SEC and other regulators, and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future, and could cause us to undertake initiatives to such new criteria.
If our sustainability practices do not meet evolving investor or other stakeholder expectations and standards, then our reputation, our ability to attract or retain employees, and our attractiveness as an investment, business partner, acquiror or supplier could be negatively impacted. Further, our failure or perceived failure to pursue or fulfill our goals and objectives or to satisfy various reporting standards on a timely basis, or at all, could have similar negative impacts or expose us to government enforcement actions and private litigation.
Climate change, and related legislative and regulatory responses to climate change, may adversely impact our business.
The focus of, and levels of concern from, federal, state and local governments, non-governmental organizations and our customers, consumers and investors regarding climate change and other environmental matters continue to evolve. New governmental requirements or changing consumer preferences could negatively impact our ability to obtain raw materials or increase our acquisition and compliance costs, which could make our products more costly, less attractive to consumers than other competitive products or reduce consumer demand. 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.
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. Physical risks related to these events could disrupt the operation of our supply chain and the productivity of our manufacturers, increase our production costs, impose capacity restraints or impact the types of products that consumers purchase. These events could also compound adverse economic conditions and impact consumer confidence and discretionary spending. As a result, the physical effects of climate change could have a long-term adverse impact on our business and results of operations.
If the retail partners in our wholesale channel cease to promote or carry our current products or choose not to promote or carry new products that we develop, or if 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.
We sell a significant amount of our products through our wholesale channel, consisting of national, regional, and independent retail partners. Because we are a premium brand, our sales depend, in part, on retail partners effectively displaying our products, including providing attractive space and point of purchase displays in their stores, and training their sales personnel to sell our products. 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 or prioritize other brands with higher margins, we may experience lower gross margins on products sold to such partners. Our relationships with these retail partners are important to the authenticity of our brand and the marketing programs we continue to deploy. Our failure to maintain these relationships with our retail partners or financial difficulties experienced by these retail partners could materially harm our business.
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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 customers’ purchases of our products. We do not receive long-term purchase commitments from many of our retail partners, and orders received from our retail partners are often cancellable. Factors that could affect our ability to maintain or expand sales in our wholesale channel include: (a) failure to accurately identify the needs of our customers; (b) a lack of customer acceptance of new products or product expansions; (c) unwillingness of our retail partners and customers to attribute premium value to our new or existing products or product expansions relative to competing products; (d) failure to obtain shelf space from our retail partners; (e) new, well-received product introductions by competitors; (f) damage to our relationships with retail partners due to brand or reputational harm; (g) delays or defaults on our retail partners’ payment obligations to us; (h) store closures, decreased foot traffic, or other effects resulting from public health ; and (i) economic conditions, including levels of consumer discretionary spending, which may be impacted by high inflation, and interest rates.
We cannot assure you that our retail partners will continue to carry our current products or carry any new products that we develop. If these risks occur, they could harm our brand as well as our results of operations and financial condition.
If we do not successfully navigate risks associated with, or realize sufficient return on investments in, our DTC channel, our business and results of operations could be harmed.
A majority of our net sales are through our DTC channel, which includes the Amazon Marketplace. Changes to policies, algorithms, fee structures, brand protection programs, or other terms imposed by third-party e-commerce platforms, as well as delisting, reduced discoverability, or limitations on marketplace participation, could adversely affect our sales and brand visibility. In addition, we may be exposed to increased risks of counterfeit or gray-market products, fraudulent listings, or negative product reviews on third-party platforms, any of which could harm our reputation and results of operations.
The level of customer traffic and volume of customer purchases through our country- and region-specific YETI websites or other e-commerce initiatives are substantially dependent on our ability to provide a content-rich and user-friendly website, a hassle-free customer experience, sufficient product availability, and reliable, timely delivery of our products. If we are unable to maintain and increase customers’ use of our website, allocate sufficient product to our website, and sustain sales through our website, our continued DTC channel growth, our business, and results of operations could be harmed. Furthermore, any adverse change in our relationship with Amazon, including restrictions on the ability to offer products on the Amazon Marketplace or termination of the relationship, could adversely affect our continued DTC channel growth, our business, and results of operations.
Our DTC business subjects us to numerous other risks, including, but not limited to, (i) U.S. or international resellers purchasing our merchandise and reselling it outside of our control, (ii) failure of our DTC operating and support systems, including computer viruses, theft of customer information, privacy concerns, telecommunication failures and electronic break-ins and similar disruptions, (iii) credit card fraud, (iv) diversion of sales from our wholesale customers, (v) difficulty recreating the in-store experience through e-commerce channels, (vi) liability for online content, (vii) changing patterns of consumer behavior and (viii) intense competition from other online retailers. 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 have a number of country- and region-specific YETI websites and have plans to continue expanding our e-commerce platform. Expanding into additional countries and regions may impose different and evolving laws governing the operation and marketing of e-commerce websites, as well as the collection, storage, and use of information on customers interacting with those websites. 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.
Operating retail stores incurs substantial fixed costs and if we are unable to generate sales, operate our retail stores profitably, or otherwise fail to meet expectations, we may be unable to reduce such fixed costs and avoid losses or negative cash flows.
We have and may continue to expand our existing DTC channel by opening new retail stores. Opening and operating retail stores requires substantial financial commitments, including fixed costs, and our ability to operate them profitably depends on a number of factors, many of which are beyond our control. These factors include the ability to identify and secure suitable locations and the ability of these locations to attract and maintain customer traffic; our ability to secure leases on favorable terms, accurately predict profitability, obtain permits and regulatory approvals, hire and train qualified personnel, ensure timely construction and inventory supply, and integrate new stores into our supply chain and operational infrastructure; nearby competition; consumer demand; and general economic and business conditions affecting consumer confidence and spending. We may not generate sufficient sales from these stores to justify their expenses, which could harm our business and profitability.
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Insolvency, credit problems or other financial difficulties that could confront our retail partners could expose us to financial risk.
We sell to the large majority of our retail partners on open account terms and do not require collateral or a security interest in the inventory we sell them. Consequently, our accounts receivable with our retail partners are unsecured. Insolvency, credit problems, or other financial difficulties confronting our retail partners could expose us to financial risk. These actions could expose us to risks if they are unable to pay for the products they purchase from us. While we believe that our exposure to concentrations of credit risk with respect to trade receivables is mitigated by our large retail partner base, and we make allowances for credit losses, we nevertheless run the risk of our retail partners not being able to meet their payment obligations, particularly in a future economic downturn. If a material number of our retail partners were not able to meet their payment obligations, our results of operations could be .
Financial difficulties of our retail partners could also cause them to reduce their sales staff, use of attractive displays, number or size of stores, and the amount of floor space dedicated to our products. Further, economic conditions resulting in diminished liquidity or credit availability, increases in inflation rates, rising interest rates, declines in consumer confidence, declines in economic growth, or uncertainty about economic stability, may lead to a material reduction in sales of our products by our retail partners. Any reduction in sales by, or loss of, our current retail partners or customer demand, or credit risks associated with our retail partners, could harm our business, results of operations, and financial condition.
If our independent suppliers and manufacturing partners do not comply with ethical business practices or with applicable laws and regulations, our reputation, business, and results of operations could be harmed.
Our reputation and our customers’ willingness to purchase our products depend in part on our suppliers’, manufacturers’, and retail partners’ compliance with ethical employment practices, such as with respect to child labor, wages and benefits, forced labor, discrimination, safe and healthy working conditions, and with all legal and regulatory requirements relating to the conduct of their businesses. We do not exercise control over our suppliers, manufacturers, and retail partners and cannot guarantee their compliance with ethical and lawful business practices. 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.
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.
For our DTC sales, as well as for sales to certain retail partners, we accept a variety of payment methods, including credit cards, debit cards, electronic funds transfers, electronic payment systems, and gift cards. Accordingly, we are, and will continue to be, subject to significant and evolving regulations and compliance requirements, including obligations to implement enhanced authentication processes that could result in increased costs and liability and reduce the ease of use of certain payment methods. For certain payment methods, including credit and debit cards, as well as electronic payment systems, we pay interchange and other fees, which may increase over time. We rely on independent service providers for payment processing, including credit and debit cards. If these independent service providers become unwilling or unable to provide these services to us, or if the cost of using these providers increases, our business could be harmed. We are also subject to payment card association operating rules and agreements, including data security rules and agreements, certification requirements, and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, or if our data security systems are or compromised, we may be liable for incurred by card issuing banks or customers, subject to and higher transaction fees, our ability to accept credit or debit card payments from our customers, or process electronic fund transfers or facilitate other types of payments. Any to comply could significantly our brand, reputation, business, financial condition and results of operations.
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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.
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. There are, however, significant costs and risks inherent in selling our products in international markets, including: (a) failure to effectively translate and establish our core brand identity, particularly in markets with a less-established heritage of outdoor and recreational activities; (b) time and difficulty in building a widespread network of retail partners; (c) increased shipping and distribution costs, which could increase our expenses and reduce our margins; (d) potentially lower margins in some regions; (e) longer collection cycles in some regions; (f) increased competition from local providers of similar products; (g) compliance with fragmented and rapidly evolving foreign laws and regulations, including regarding taxes, duties, consumer protection, product safety, privacy, and digital marketing; (h) establishing and maintaining effective internal controls at foreign locations and the associated increased costs; (i) increased counterfeiting and the uncertainty of protection for intellectual property rights in some countries and practical difficulties of enforcing rights abroad; (j) compliance with anti-bribery, anti-, sanctions, and anti-money laws, such as the FCPA, the Act, and OFAC regulations, by us, our employees, and our business partners; (k) currency exchange rate fluctuations and related effects on our results of operations; (l) economic , including inflation, or political in foreign economies and markets; (m) compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; (n) workforce uncertainty in countries where labor is more common than in the United States; (o) business resulting from geopolitical actions, including war and terrorism, natural , including earthquakes, typhoons, floods, and fires, public health emergencies, including the outbreak of a pandemic or other public health ; (p) the imposition of tariffs on products that we import into international markets that could make such products more expensive compared to those of our competitors; (q) that our ability to expand internationally could be impacted by the intellectual property rights of third parties that with or are to ours; (r) backlash American brands in international markets; and (s) other costs and risks of doing business internationally. In addition, stakeholder and regulatory expectations for supply chain and traceability, including documentation of origin, materials, and labor practices, may be and complex to implement. We may be to fully trace all inputs through multi-tier supply chains, which could increase the risk of shipment , , or reputational if any supplier is to be non-compliant.
These and other factors could harm our international operations and, consequently, harm our business, results of operations, and financial condition. Further, we may incur significant operating expenses as a result of our planned international expansion, and it may not be successful. In our expansion efforts we at times encounter obstacles we did not face in the our existing markets, including cultural and linguistic differences, differences in regulatory environments, labor practices and market practices, difficulties in keeping abreast of market, business and technical developments, and preferences of foreign customers. Consumer demand and behavior, as well as tastes and purchasing trends, also often differ internationally. As a result, we may not be able to successfully penetrate or operate in new markets, or our sales in new markets or the margins on those sales may not be in line with those we anticipate. We also at times encounter challenges due to limited brand recognition, leading to delayed or limited acceptance of our products by customers in these markets and increased marketing and customer acquisition costs to establish our brand. Accordingly, if we are to expand internationally or manage the complexity of our global operations, we may not the expected benefits of this expansion and our financial condition and results of operations could be .
Our financial results and future growth have been, and could in the future be, harmed by currency exchange rate fluctuations.
As our international business grows, our results of operations have been and could in the future be adversely impacted by changes in foreign currency exchange rates. Revenues and certain expenses in markets outside of the United States are recognized in local foreign currencies, and we are exposed to gains or losses from the translation of those amounts into U.S. dollars for consolidation into our financial statements. 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. As a result, foreign currency exchange rate fluctuations may adversely impact our results of operations.
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We may become involved in legal or regulatory proceedings and audits.
Our business requires compliance with many laws and regulations, including labor and employment, sales and other taxes, customs, and consumer protection laws and ordinances that regulate retailers generally and/or govern the importation, promotion, and sale of merchandise, and the operation of stores and warehouse facilities. Failure to comply with these laws and regulations could subject us to lawsuits and other proceedings, and could also lead to damage awards, fines, and penalties. We are periodically involved in, and may in the future be, subject to legal proceedings, regulatory investigations, and audits, including those related to consumer protection, employment, intellectual property, tort and product safety. The outcome of some of these legal proceedings, audits, and other contingencies could require us to take, or refrain from taking, actions that could harm our operations or require us to pay substantial amounts of money, harming our financial condition and results of operations. Additionally, defending against these lawsuits and proceedings may be necessary, which could result in substantial costs and of management’s attention and resources, our business, financial condition, and results of operations. Any pending or future legal or regulatory proceedings and audits could our business, financial condition, and results of operations.
We may be subject to product recall, warranty liability, product liability, and other claims against us, which could adversely affect our reputation, earnings, and financial condition.
Our products expose us to product recall and warranty liability claims if the products we manufacture, sell, or design actually or allegedly fail to perform as expected. 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 United States Consumer Products Safety Commission, other relevant global regulatory authorities, or other country, state, or city laws (in existence now or in the future) could require us to repurchase or recall one or more of our products. 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 to sell. For example, in 2023 we initiated a global stop sale and voluntary of our Hopper M30 Soft Cooler, Hopper M20 Soft Backpack Cooler, and SideKick Dry gear case. These actions us to substantial costs, including product remedies, legal and advisory fees, and -related logistics costs. Further, if we are to develop a product solution for any potential safety associated with a product , we may not be to sell the redesigned products for a significant period of time, if ever, and may face substantial costs associated with the development of such features and implementation of the . In addition to potential impacts, the occurrence of any material in our products could us to liability for warranty , which could be in excess of our current reserves, and if our warranty reserves are to cover future warranty on our products, our financial condition and operating results may be .
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. In addition to the risk of monetary judgments or other penalties that may result from product liability claims, such claims could result in negative publicity that could harm our reputation in the marketplace, adversely impact our brand, or result in an increase in the cost of producing our products. As a result, these types of claims could have a material adverse effect on our business, results of operations, and financial condition.
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Our business is subject to the risk of earthquakes, fire, power outages, floods, and other catastrophic events, and to interruption by problems such as terrorism, public health crises, cybersecurity incidents or other cybersecurity threats, or events affecting our information technology systems.
Our business is vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, terrorist attacks, acts of war, riots, public health crises, and similar events. For example, a significant natural disaster, such as an earthquake, fire, or flood, could result in substantial losses or other costs, and our insurance coverage may be insufficient or unavailable to compensate us for losses that may occur. 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 addition, many of the facilities of our suppliers and where our manufacturers produce our products are located in parts of Asia that frequently experience typhoons and earthquakes. Facilities of third-party logistics providers located in other countries that warehouse and distribute our finished products internationally also face local extreme weather conditions. Acts of terrorism, civil and public health could also cause in our or our suppliers’, manufacturers’, and logistics providers’ businesses or the economy as a whole. These could certain domestic and international supply chains and affect the flow or availability of certain of our products. We may not have sufficient protection or recovery plans in some circumstances, such as natural affecting Texas or other locations where we have operations or store significant inventory. Our business could also be affected by or of our information technology systems, which could occur for a number of reasons, including cybersecurity or other cybersecurity , system , or to maintain or upgrade information technology systems. See the risk factor titled “We rely significantly on information technology, and any compromise or of that technology resulting from cybersecurity , data security , design or system could have a material impact on our business” for further information .
Our results of operations are subject to seasonal and quarterly variations, which could cause the price of our common stock to decline.
Historically, we have experienced our net sales to be highest in our fourth quarter, with the first quarter generating the lowest sales. We expect that this seasonality will continue to be a factor in our results of operations and sales. 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. In addition, we may not be able to adjust our spending in a timely manner to compensate for any unexpected shortfall in our sales. As a result of these seasonal and quarterly fluctuations, we believe that comparisons of our results of operations between different quarters within a single fiscal year, or across different fiscal years, are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of our future performance. In the event that any seasonal or quarterly fluctuations in our net sales and results of operations result in our failure to meet our forecasts or the forecasts of the research analysts that may cover us in the future, the market price of our common stock could fluctuate or .
We are subject to many hazards and operational risks that can disrupt our business, some of which may not be insured or fully covered by insurance.
Our operations are subject to many hazards and operational risks inherent to our business, including: (a) general business risks; (b) product liability; (c) product recall; and (d) damage to third parties, our infrastructure, or properties caused by fires, floods and other natural disasters, power losses, telecommunications failures, terrorist attacks, riots, public health crises, human errors, and similar events. Although we maintain various insurance policies, such coverage may not be available or sufficient to cover all losses or liabilities, including those arising from product recalls, cybersecurity incidents, catastrophic events, climate-related physical events, or prolonged business interruption. Coverage may be subject to significant exclusions, sublimits, high deductibles, retroactive dates, -made , or insurer risk, and premiums and retentions may increase materially. We may not be to obtain or renew insurance on commercially reasonable terms, in amounts, or at all. A significant or , or a claim in excess of our coverage limits, could affect our business, financial condition, and results of operations.
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Risks Related to Market and Global Economic Conditions
Our net sales and profits depend on the level of customer spending for our products, which is sensitive to general economic conditions and other factors; adverse economic conditions, such as a downturn in the economy or inflationary conditions resulting in rising prices, could adversely affect consumer purchases of discretionary items, which could materially harm our sales, profitability, and financial condition.
Because our products are discretionary purchases, our business is highly sensitive to changes in economic conditions and consumer spending trends. There are a number of factors that influence consumer spending, including actual and perceived economic conditions, consumer confidence, disposable consumer income, consumer credit availability, unemployment, and tax rates. Consumers also have discretion as to where to spend their disposable income and may choose to purchase other items or services if we do not continue to provide authentic, compelling, and high-quality premium products at appropriate price points. As global economic conditions continue to be volatile and economic uncertainty remains, trends in consumer discretionary spending also remain unpredictable and subject to declines. While some of these conditions have negatively impacted consumer discretionary spending behavior, we continue to see strong consumer demand for our products. Worsening declines in discretionary consumer spending could result in a reduction in demand for our products, decreased prices, and harm to our business and results of operations. Moreover, consumer purchases of discretionary items, such as our products, tend to during periods when disposable income is lower or during other periods of economic or uncertainty, which may our growth more than we anticipate. For example, inflationary conditions resulting in rising prices, including the prices of our products, and increased interest rates could lead to in discretionary spending by consumers, resulting in a reduction in demand for our products, and in turn may materially impact our sales, , and financial condition. economic conditions in markets in which we sell our products, particularly in the United States, may materially our sales, , and financial condition.
Public health crises could negatively impact our business, sales, financial condition, results of operations and cash flows.
Public health crises, including pandemics, epidemics, or infectious disease outbreaks, and related required or voluntary measures to limit transmission could cause, business slowdowns or shutdowns in affected areas and significant disruption in the financial markets both globally and in the United States. The emergence of a pandemic, epidemic, or infectious disease outbreak could, among other things, lead to:
• temporary retail store closures or reduced operating hours and/or decreased retail traffic;
• disruptions at our distribution centers, third-party manufacturing partners and other vendors, due to illness-related facility closures, or measures taken by federal, state or local governments to reduce the spread of illness, reductions in operating hours, labor shortages, and real time changes in operating procedures, including for additional cleaning and disinfection procedures; and
• significant disruption of global financial markets that could adversely affect our ability to access capital in the future.
For example, a future public health crisis could lead to constraints across domestic and international supply chains, such as port congestion, transportation delays, and labor and container shortages, that affect product flow and availability, and could increase demand for e-commerce in ways that strain fulfillment operations and small-parcel networks, potentially causing delivery delays.
The emergence of a pandemic, epidemic or infectious disease outbreak, including any required or voluntary actions to help limit the spread of illness, could impact our ability to carry out our business and could materially adversely impact global economic conditions, our business, results of operations, cash flows and financial condition. Such events could materially increase our costs, negatively impact our sales and damage our results of operations and liquidity, possibly to a significant degree. The extent of the impact of such events on our business and financial results cannot be predicted.
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Risks Related to Information Technology and Security
We rely significantly on information technology, and any compromise or interruption of that technology resulting from cybersecurity incidents, data security breaches, design defects or system failures could have a material negative impact on our business.
We depend on our information technology systems, as well as those of third parties, to design and develop new products, process financial and accounting information, manage inventory and our supply chain, operate our websites, host and manage our services, support our remote-working employees, store data, process transactions, respond to user inquiries, and conduct and manage various other operational activities. Any of these information technology systems could fail or experience a service interruption for a number of reasons, including cybersecurity threats, system failures, design defects, or failure to maintain or upgrade information technology systems.
Although we have taken steps to protect the security of our information technology systems and the data maintained in those systems, we have, from time to time, experienced cybersecurity threats to our data and systems, including malware, phishing, and attempts to exploit vulnerabilities in third-party software and services on which we rely. It is possible that our safety and security measures will not prevent our systems from functioning improperly or becoming damaged. It is also possible that our safety and security measures will not prevent the improper access or disclosure of personally identifiable information such as in the event of a cybersecurity incident. Incidents may include social engineering or impersonation of authorized users, efforts to discover and exploit design flaws, bugs, security vulnerabilities or security weaknesses, intentional or acts by employees or other insiders with access privileges, acts of or by third parties or . Our use of AI and our use of products and services from third parties that use AI as well as our expansion into countries with data protection standards, may increase the risks of such . In some instances, efforts to correct or prevent have in the past reduced, and may in the future reduce, the functionality or performance of our information technology, which could impact our business. Cybersecurity can also be caused by ransomware, distributed -of-service attacks, worms, and other software programs or other attacks. Such 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, to detect, or designed to remain dormant until a triggering event, and may continue for an extended period of time. In addition, some of our suppliers, vendors, service providers, cloud solution providers and customers have in the past experienced, and may in the future experience, such , which could in turn our business. While we maintain cybersecurity insurance, such insurance policies may not cover any or all of the resulting financial .
Any material disruption or slowdown of our systems or those of third parties that we depend upon could cause information, including data related to orders, to be lost or delayed. Such loss or delay of information could result in delays in the delivery of products to retailers and customers. We could also lose sales, which could in turn reduce demand for our products, harm our brand and reputation, and cause our sales to decline. In addition to disruptions due to cybersecurity incidents, we may experience such disruptions due to significant increases in user volume, system failures, design defects or failure to maintain or upgrade information technology systems. We periodically implement modifications and upgrades to our systems, including making changes to legacy systems, replacing legacy systems with successor systems with new functionality, automating processes and acquiring new systems with new functionality. While we invest in developments to our technology and systems, there is a risk that our investments may not ultimately result in the rate of return we expect. Furthermore, remediation and repair of any , or of our key information systems could require significant capital investments. In addition, the implementation of new information technology systems or any remediation of our key information systems often require investment of capital and human resources, the re-engineering of business processes, and the attention of many employees who would otherwise be focused on other areas of our business. Further, if we experience any significant to our financial information systems that we are to mitigate, we could sales and profits, experience reputational , or our ability to timely report our financial results could be impacted, which could impact our stock price.
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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. Our customers’ personal information may include names, addresses, phone numbers, email addresses, payment card data, and payment account information, as well as other information. 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. Any unauthorized access or data acquisition, despite security measures in place to protect such information, or other failure on the part of us or third parties to maintain the security of such data could result in business disruption, damage to our reputation, financial obligations to third parties, legal obligations, fines, penalties, regulatory proceedings and private litigation with potentially large costs. Such access or data acquisition could also result in in confidence in our Company and other competitive , and thus could have a material effect on our business. Depending on the nature of the information compromised, we may also have obligations to notify users, law enforcement, government entities, or payment companies about the and may need to provide some form of remedy, such as refunds, for the individuals affected by the . Privacy laws, rules, and regulations are constantly evolving in the United States and abroad and sometimes are from one jurisdiction to another. Further, as we expand internationally, we are subject to additional privacy rules, such as the European Union’s General Data Protection Regulation, many of which are significantly more than those in the United States. Complying with these evolving obligations is , and any to comply could give rise to media attention and other publicity, our customer and consumer relationships and reputation, and result in sales, , or lawsuits, and may our business.
The integration and use of AI in our business presents risks and challenges that could adversely affect our business, reputation, and results of operations.
We have in the past and may in the future incorporate AI solutions into our business operations. For example, we have adopted AI solutions to enhance or automate internal processes, for custom image generation and moderation, for marketing and search analytics, to launch a conversational shopping assistant, among other uses. We also use products and services from third parties that use integrated AI technology. AI is an emerging technology, and we cannot be sure that our use of AI will increase efficiency or provide any other benefits. The use of AI tools and technology presents many challenges and risks to our business, including the risk of bias, miscalculations, data errors and other unintended consequences. Unintended or improper use of AI may lead to regulatory issues, reputational or financial harm, and operational disruptions. The use of AI may also increase the risks to us of data breaches, malware, ransomware, data and theft, or the handling of sensitive information, which could result in financial and regulatory consequences. The rapid development and adoption of AI and AI-adjacent technology, and of AI’s competitive use cases, may make it more for us to compete in our industry. Our competitors may have implementing and using AI technology than us, which could our ability to compete effectively and could affect our results of operations. Further, we may become reliant on AI technology and tools in the future. The legal, regulatory and compliance environment surrounding the design and use of AI technology is evolving and complex. Our obligation to comply with the evolving regulatory landscape could entail significant costs and affect our business. In addition, there has been a significant increase in AI-related and government regulatory actions targeting the design, deployment and other uses of AI, and liability under numerous areas of the law, such as consumer protection, product liability, privacy, intellectual property, securities and . The occurrence of any of these risks could have an effect on our business, reputation and results of operations.
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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.
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 our business does not generate sufficient cash flow from operations to fund these activities and sufficient funds are not otherwise available from our current or future credit facility, we may need additional equity or debt financing. Global economic factors affecting the financial and credit markets, such as diminished liquidity and credit availability, sustained high interest rates and inflation, declines in consumer confidence, declines in economic growth, and uncertainty about stability could impact our ability to obtain financing. If such financing is not available to us at all or on satisfactory terms, our ability to operate and expand our business or to respond to competitive pressures could be harmed. Moreover, if we raise additional capital by issuing equity securities or securities convertible into equity securities, the ownership of our existing stockholders may be diluted. The holders of new securities may also have rights, preferences or privileges which are senior to those of existing holders of common stock. In addition, any indebtedness we incur may subject us to covenants that restrict our operations and will require interest and principal payments that could create additional cash demands and financial risk for us.
Our indebtedness may limit our ability to invest in the ongoing needs of our business and if we are unable to comply with the covenants in our current Credit Facility, our liquidity and results of operations could be harmed.
As of January 3, 2026, we had $73.8 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). The Credit Facility is jointly and severally guaranteed by certain of our wholly-owned subsidiaries and any of our future subsidiaries that become guarantors, together, which we refer to as the Guarantors, and is also secured by a first-priority lien on substantially all of our assets and the assets of the Guarantors, in each case subject to certain customary exceptions. We may, from time to time, incur additional indebtedness under the Credit Facility.
The Credit Facility places certain conditions on us, including, subject to certain conditions, reductions and exceptions, requiring us to utilize a portion of our cash flow from operations to make payments on our indebtedness, reducing the availability of our cash flow to fund working capital, capital expenditures, development activity, return capital to our stockholders, and other general corporate purposes. Our compliance with this condition may limit our ability to invest in the ongoing needs of our business. For example, complying with this condition:
• increases our vulnerability to adverse economic or industry conditions;
• limits our flexibility in planning for, or reacting to, changes in our business or markets;
• makes us more vulnerable to increases in interest rates, as borrowings under the Credit Facility bear interest at variable rates;
• limits our ability to obtain additional financing in the future for working capital or other purposes; and
• potentially places us at a competitive disadvantage compared to our competitors that have less indebtedness.
The Credit Facility places certain limitations on our ability to incur additional indebtedness. However, subject to the qualifications and exceptions in the Credit Facility, we may incur substantial additional indebtedness under that facility. The Credit Facility also places certain limitations on our ability to enter into certain types of transactions, financing arrangements and investments, to make certain changes to our capital structure, and to guarantee certain indebtedness, among other things. The Credit Facility also places certain restrictions on the payment of dividends and distributions and certain management fees. These restrictions limit or prohibit, among other things, and in each case, subject to certain customary exceptions, our ability to: (a) pay dividends on, redeem or repurchase our stock, or make other distributions; (b) incur or guarantee additional indebtedness; (c) sell stock in our subsidiaries; (d) create or incur liens; (e) make acquisitions or investments; (f) transfer or sell certain assets or merge or consolidate with or into other companies; (g) make certain payments or prepayments of indebtedness subordinated to our obligations under the Credit Facility; and (h) enter into certain transactions with our affiliates.
The Credit Facility requires us to comply with certain covenants, including financial covenants regarding our total net leverage ratio and interest coverage ratio. Fluctuations in these ratios may increase our interest expense. 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.
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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 the debt under the Credit Facility were to be accelerated, we may not have sufficient cash or be able to sell sufficient collateral to repay this debt, which would immediately and materially harm our business, results of operations, and financial condition. The threat of our debt being accelerated in connection with a change of control could make it more difficult for us to attract potential buyers or to consummate a change of control transaction that would otherwise be beneficial to our stockholders.
If our goodwill, other intangible assets, or fixed assets become impaired, we may be required to record a charge to our earnings.
We may be required to record future impairments of goodwill, other intangible assets, or fixed assets to the extent the fair value of these assets falls below their book value. Our estimates of fair value are based on assumptions regarding future cash flows, gross margins, expenses, discount rates applied to these cash flows, and current market estimates of value. Estimates used for future sales growth rates, gross profit performance, and other assumptions used to estimate fair value could cause us to record material non-cash impairment charges, which could harm our results of operations and financial condition. Sustained inflation, a downturn in consumer discretionary spending, or significant adverse changes in trade policy could reduce expected cash flows and trigger future impairment reviews or charges.
If our estimates or judgments relating to our critical accounting policies prove to be incorrect or change significantly, our results of operations could be harmed.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity and the amount of sales and expenses that are not readily apparent from other sources. Our results of operations may be harmed if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors and could result in a decline in our stock price.
Changes in tax laws or unanticipated tax liabilities could adversely affect our effective income tax rate and profitability.
We are subject to income taxes in the United States (federal and state) and various foreign jurisdictions. Our effective income tax rate can be adversely affected by a number of factors, including changes in the valuation of deferred tax assets and liabilities, changes in tax laws and regulations or their interpretations and application, and the outcome of income tax audits in various jurisdictions around the world.
The Organization for Economic Co-Operation and Development enacted model rules for a new global minimum tax framework, also known as Pillar Two, and certain governments globally have enacted, or are in the process of enacting, legislation to address Pillar Two. 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. We regularly assess all of these matters to determine the adequacy of our income tax provision, which is subject to significant judgment.
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.
As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal controls. Section 404 of the Sarbanes-Oxley Act of 2002 requires that we evaluate and determine the effectiveness of our internal control over financial reporting and provide a management report on our internal controls on an annual basis. If we have material weaknesses in our internal control over financial reporting, we may not detect errors on a timely basis and our consolidated financial statements may be materially misstated.
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Additionally, even if we conclude our internal controls are effective for a given period, we may in the future identify one or more material weaknesses in our internal controls, in which case our management will be unable to conclude that our internal control over financial reporting is effective. Our independent registered public accounting firm is required to issue an attestation report on the effectiveness of our internal control over financial reporting every fiscal year. Even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm may conclude that there are material weaknesses with respect to our internal controls or the level at which our internal controls are documented, designed, implemented or reviewed.
If we are unable to conclude that our internal control over financial reporting is effective or if our auditors were to express an adverse opinion on the effectiveness of our internal control over financial reporting because we had one or more material weaknesses, investors could lose confidence in the accuracy and completeness of our financial disclosures, which could cause the price of our common stock to decline. Irrespective of compliance with Section 404, any failure of our internal control over financial reporting could have a material adverse effect on our reported operating results and harm our reputation. Internal control deficiencies could also result in a restatement of our financial results.
We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term stockholder value, and share repurchases could increase the volatility of the price of our common stock.
Pursuant to the share repurchase program originally authorized by our Board of Directors in February 2024 (the “Share Repurchase Program”), we are authorized to repurchase 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 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. The timing of repurchases pursuant to our Share Repurchase Program could affect our stock price and increase its volatility. We cannot guarantee that we will repurchase shares, and there can be no assurance that any share repurchases will enhance stockholder value because the stock price of our common stock may decline below the levels at which we effected repurchases.
Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of the Company more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our common stock.
Provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws may have the effect of delaying or preventing a change in control or changes in our management. 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 (as defined therein) be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;
• 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 Chair 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.
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These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors, which is responsible for appointing the members of our management. In addition, we have opted out of the provisions of Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”), which generally prohibit a Delaware corporation from engaging in any of a broad range of business combinations with any interested stockholder for a period of three years following the date on which the stockholder became an interested stockholder. However, our Amended and Restated Certificate of Incorporation provides substantially the same limitations as are set forth in Section 203 but also provides that Cortec Group Fund V, L.P., our controlling stockholder at the time of our initial public offering, and its affiliates and any of their direct or indirect transferees and any group as to which such persons are a party do not constitute “interested stockholders” for purposes of this provision.
Our Amended and Restated Certificate of Incorporation provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for substantially all disputes between us and our stockholders and our Amended and Restated Bylaws provide that the federal district courts of the United States are the exclusive forum for complaints asserting a cause of action under the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Our governing documents provide that, unless we consent to the selection of an alternative forum, (i) the Court of Chancery of the State of Delaware is the sole and exclusive forum for: (a) any derivative action or proceeding brought on our behalf; (b) any action asserting a claim of breach of fiduciary duty owed by any of our stockholders, directors, officers, or other employees to us or to our stockholders; (c) any action asserting a claim arising pursuant to the DGCL; or (d) any action asserting a claim governed by the internal affairs doctrine; and (ii) the federal district courts of the United States are the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act of 1933, as amended. The choice of forum provisions do not apply to any actions arising under the Exchange Act. These exclusive forum provisions will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and stockholders of YETI will not be deemed to have waived our compliance with these laws, rules and regulations. The choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for with us or our directors, officers, or other employees, or may increase the costs to such individual in pursuing any such claim, particularly with respect to subject to our state choice of forum provision if they do not reside in or near the State of Delaware, which may such lawsuits us and our directors, officers, and other employees. Further, the enforceability of similar forum provisions in other companies’ organizational documents has in the past been in legal proceedings, and it is possible that a court could find any of our forum provisions to be inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings. 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 our business, results of operations, and financial condition.
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.
As a holding company, our principal source of cash flow is distributions from our subsidiaries. Therefore, our ability to fund and conduct our business, service our debt, and pay dividends, if any, depends on the ability of our subsidiaries to generate sufficient cash flow to make upstream cash distributions to us. Our subsidiaries are separate legal entities, and although they are wholly owned and controlled by us, they have no obligation to make any funds available to us, whether in the form of loans, dividends, or otherwise. The ability of our subsidiaries to distribute cash to us is also subject to, among other things, restrictions that may be contained in our subsidiary agreements (as entered into from time to time), availability of sufficient funds in such subsidiaries and applicable laws and regulatory restrictions. Claims of any creditors of our subsidiaries generally have priority as to the assets of such subsidiaries over our claims and claims of our creditors and stockholders. To the extent the ability of our subsidiaries to distribute dividends or other payments to us is limited in any way, our ability to fund and conduct our business, service our debt, and pay dividends, if any, could be harmed.
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Risks Related to Acquisitions, Strategic Transactions, and Stockholder Activism
We have acquired and may in the future acquire or invest in other companies, which could divert our management’s attention, result in dilution to our stockholders, and otherwise disrupt our operations and harm our results of operations.
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. 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. We also may not achieve the anticipated benefits from such acquisitions due to a number of factors, including: (a) an inability to integrate or benefit from acquisitions in a profitable manner; (b) unanticipated costs or liabilities associated with the acquisition; (c) the incurrence of acquisition-related costs; (d) the diversion of management’s attention from other business concerns; (e) the loss of our or the acquired business’ key employees; or (f) the issuance of dilutive equity securities, the incurrence of debt, or the use of cash to fund such acquisitions.
In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually. If our acquisitions do not yield expected returns, we may be required to take charges to our results of operations based on this impairment assessment process, which could harm our results of operations.
We may be the target of strategic transactions, which could divert our management's attention and otherwise disrupt our operations and adversely affect our business.
Other companies may seek to acquire us or enter into other strategic transactions. We will consider, discuss, and negotiate such transactions as we deem appropriate. The consideration of such transactions, even if not consummated, could divert management’s attention from other business matters, result in adverse publicity or information leaks, and could increase our expenses.
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, public companies—including those in our industry—have experienced a significant increase in various forms of stockholder activism, such as direct engagement, public campaigns, letter-writing efforts, shareholder proposals, proxy contests, and unsolicited takeover bids. We have previously been, and may in the future be, the subject of such activities. Stockholder activism can be disruptive and may result in substantial costs, including legal, advisory, and public relations fees and expenses, regardless of the outcome. Activist campaigns may divert the attention of our Board of Directors, management, and employees from the execution of our business strategy and day-to-day operations.
Activists may seek to effect changes in our governance, management, strategic direction, capital allocation, or business operations that may not align with the interests or strategies of all stockholders. Such campaigns can create actual or perceived uncertainties as to our future strategy, direction, or leadership. Any such uncertainties or concerns could result in the loss of potential business opportunities, harm our business and financial relationships, and harm our ability to attract or retain investors, customers and employees. In addition, activist campaigns—whether successful or net—may result in increased volatility in our stock price, negative publicity, or reputational harm, and may trigger or accelerate other adverse actions, such as litigation, regulatory inquiries, or short selling. Short sellers or other market participants may also attempt to public perception of YETI through selective disclosures, , or social media campaigns, which could further impact our stock price and reputation.
Responding to activism or related campaigns may require significant time and resources from our management and Board, and there can be no assurance that we will be able to effectively respond to or mitigate the impact of such activities. Any of the foregoing could adversely affect our business, financial condition, results of operations, and the market price of our common stock. Responding to such matters may also strain our governance and risk management resources and exacerbate other risks described in this section.
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