Shares of cooler company Yeti (YETI -10.35%) tumbled to close Thursday down 10.4% after the company reported mixed earnings this morning.
Heading into the report, analysts forecast Yeti would earn $0.54 per share on sales of $462.8 million. Yeti beat the earnings estimate with a $0.66-per-share adjusted profit, but missed on sales, reporting only 445.9 million.
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Yeti's Q2 earnings
Revenue declined 4% year over year, with Yeti complaining of "caution from consumers and our retail partners" causing rivals to discount prices, as well as inventory constraints that affected supply.
Earnings were either up or down, depending on what kind of earnings you focus on. Adjusted profits, which back out one-time items, were down 6% at the aforementioned $0.66. Earnings as calculated according to generally accepted accounting principles (GAAP), though, rose 3% -- but only to $0.61.
Management described its free cash flow as "robust."
Is Yeti stock a buy?
And yet... according to Yeti's cash-flow statement, free cash flow for the first half of this year was negative $39 million -- an improvement from the $69.3 million in cash burned in the first half of 2024 to be sure, but far from what I'd describe as "robust." So why use that word?
Well, when describing its guidance for the rest of this year, Yeti clarified that after a slow start, it expects to end 2025 with between $150 million and $200 million in positive free cash flow. And that's up significantly from its prior projection of $100 million to $125 million. So apparently, there's something going on behind the scenes (and off the cash-flow statement), that has management feeling optimistic.
For the time being, though, investors seem displeased with Yeti's numbers. And for the time being, I can't blame them.
