Revenue in the third quarter rose 7% to $196.1 million, translating into adjusted net income of $20.2 million, or $0.24 per share. While that bottom-line result was on target with expectations of $0.24 per share in adjusted profit, sales fell short of the $196.2 million that analysts were modeling for. Gross margin expanded to 49.7%, while adjusted EBITDA came in at $38.4 million.
The company, which makes insulated coolers and other outdoor gear, finished the third quarter with $52.1 million in cash, but that total does not include IPO proceeds. The offering brought in net proceeds of $37.9 million, and YETI is using those proceeds in addition to cash on hand to repay $50 million in debt.
"We are pleased with our performance in the third quarter which resulted in a significant increase in both gross margin and net income," CEO Matt Reintjes said in a statement. "We continue to support and stoke a passionate customer base, design and develop superior product, and optimally balance our omni-channel distribution. Looking ahead, we remain committed to executing against our growth strategies through expanding our customer base as we drive brand awareness, introducing new and innovative products, accelerating DTC sales and expanding our international presence."
In terms of guidance, YETI expects fiscal 2018 revenue to rise 19% to 20% relative to fiscal 2017, thanks in part to growth in its direct-to-consumer sales channel. Operating margin should be 12.8% to 13.1%, and adjusted earnings per share for the year should be $0.79 to $0.82, significantly higher than the $0.28 per share in adjusted profit that the company posted last year. Capital expenditures should be $21 million to $24 million.