Yeti Holdings (NYSE: YETI) - American company, which sells goods for outdoor activities. The pandemic has become an opportunity for the company to improve its business performance. AND, surprisingly, all the same prerequisites continue to play into the hands of the company even now.
What do they earn
Yeti Holdings designs and sells outdoor products, but the production is in other companies. According to the company's annual report, the distribution of its revenue is as follows:
- Drinking containers - 58%.
- Coolers and equipment — 41%. Various bags and containers for storing food at a certain temperature, also it is camping and picnic equipment.
- Other - 1%. T-shirts, Caps, ice substitutes and openers.
53% sales of the company are carried out directly - through its website or third-party marketplaces. Wholesale channels account for 47% are various retail chains such as Dick's Sporting Goods, Lowe's and Williams Sonoma.
Almost all sales of the company fall on the United States, other countries give only 6% proceeds.
In general, the guys are great
Pandemic spurred Yeti's business: the actual closure of the ability to travel to the general public has led to an increase in domestic tourism, not only in the United States, but also in many other countries. As a result, Yeti's revenue also increased., and profit, and final margin.
To a large extent, the company helped, that it is strong in online sales: growth of orders through this channel in 2020 made up 50%, which is particularly impressive compared to the 3% drop in sales through wholesale buyers..
4 neighborhood 2020 the company also came out very strong, although at that time quarantine in the United States and the rest of the world was no longer total. This point indicates the future prospects of the business..
It's been more than a year since the pandemic began and quarantines of varying degrees of severity were imposed around the world.. Quarantine is periodically canceled, to re-enter back. So it seems to me, that this situation will last for a very long time: U.S. Airport Congestion Rates Are Recovering at a Sna-Tortoise Pace, and news about the suspension of flights from one country to another appears regularly. So active tourism within a region or country is still very relevant..
I think, the company can still count on at least a year - and maybe, and two - the same strong growth in sales.
Sales of the company through channels
| 2015 | 2020 | |
|---|---|---|
| Wholesale | 92% | 47% |
| Direct sales to customers | 8% | 53% |
| Sales in general | 469 million | 1,09 billion |
Comparison of company sales, million dollars
| 4 neighborhood 2019 | 4 neighborhood 2020 | Percent growth | |
|---|---|---|---|
| Coolers and equipment | 102 | 134 | 31% |
| Drinking containers | 192 | 236 | 23% |
| Wholesale | 149 | 158 | 6% |
| Direct sales | 149 | 218 | 46% |
There are those, who cares
Yeti is a successful and fairly marginal business with a well-developed online sales system and good brand awareness.. In this regard, the company could be bought by one of the larger retail players in the field of sportswear and accessories.. For example, it could be adidas or nike.
Both companies are not so well accustomed to online sales, like yeti: physical stores still play a leading role in sales, although things are different here. Adidas sales for 2020 fell on 16,1%, and in 4 quarter 2020 - on 5% compared to the same period 2019 of the year. Nike's sales have grown in general thanks to more developed online channels., but not much: on 4% behind 9 Months, ended 28 February 2021, and on 3% in the last quarter. With the success of Yeti it is not comparable.
In absolute and relative numbers, Yeti doesn't look very expensive.: P / E in the area 47 can be justified by good business performance and high potential for the development of sales of the company outside the United States. Now Yeti has almost no such sales., but the above-mentioned companies export capacities are developed very well. The capitalization of Yeti itself is now relatively small., 7,35 billion dollars, and buy the company for 12 billion is quite a feasible task for a giant like Nike.
Followers on Instagram, million people
| The North Face | 4,8 |
| Patagonia | 4,6 |
| Moncler | 3,5 |
| Lululemon Athletica | 3,4 |
| Yeti | 1,6 |
| Canada Goose | 0,6 |
| Hydro Flask | 0,6 |
| Barbour | 0,5 |
| Columbia | 0,4 |
International sales in revenue
| Yeti | 6% |
| Under Armour | 28% |
| Lululemon Athletica | 28% |
| VF | 41% |
| Nike | 59% |
Your concentration has peeled off
According to the company's annual report, on Amazon account for 14% Yeti sales. It's not great., because Amazon is a troubled company. She is famous for, what copies goods, placed on its site, and then promotes its products to the detriment of themes, from whom she copied the goods. So here you have to be prepared for that., that Yeti will have nasty conversations with Amazon.
You should also consider that, that Yeti does not have its own production and the company depends on the factories of its counterparties. And there may be problems with that., because now the factories are loaded on the most "I can't", and Yeti's quarterly reporting could be affected by that, that she may not be able to deliver the goods on time.
Resume
Yeti is a very interesting issuer. Despite the rapid growth of quotations since the beginning of the pandemic , stocks have risen by almost 100%, - I think, that these shares still have good upside potential due to the company's good business foundation.
