Contradictions Unveiled: Analyzing Tariff Impacts and Supply Chain Strategies in 2025 Q1 Earnings Call

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Supply Chain Transformation and Diversification:
- YETI Holdings has accelerated efforts to shift drinkware production out of China, with plans to have 90% of U.S. drinkware capacity ex-China by the end of 2025.
- This transformation aims to minimize exposure to China, diversifying the global supply chain and reducing tariff impacts.

Product Innovation Pipeline:
- The company anticipates over 30 new product introductions in 2025, compared to 24 in 2024, despite some products being supply constrained or launching outside the U.S.
- The focus on innovation is driven by the need to support YETI's brand strength and long-term growth potential.

Financial Impact of Tariffs and Supply Chain Disruptions:
- YETI expects inventory supply disruptions to impact 2025 growth by 300 basis points due to accelerated supply chain diversification.
- The expected gross margin decline of 450 basis points is primarily due to tariffs, with approximately 90% of the impact related to China.

International Business Expansion:
- Sales outside the U.S. grew 22% to $79.9 million in Q1, despite FX headwinds.
- Growth is driven by initiatives to increase brand awareness, expand distribution networks, and ramp up omni-channel models.