Yeti Holdings Poised for Growth: Buy Rating Supported by Innovation and Expansion Strategies

Yeti Holdings is poised for growth, according to William Blair analyst Phillip Blee, who maintains a Buy rating. Despite a mixed Q2 performance, the company exceeded gross margin and EPS forecasts, and management is confident in a second-half improvement. Yeti's commitment to product innovation and expansion into new categories, such as packs and luggage, is seen as a key driver for future growth.

Yeti Holdings (NYSE: YETI), the outdoor lifestyle products brand, saw its shares jump 4.9% in the afternoon session on July 2, 2025, following several analysts raising their price targets. Morgan Stanley and Raymond James both lifted their targets to $37.00, citing a potential 16.86% upside and a favorable macroeconomic environment [1]. The bullish sentiment from Wall Street was bolstered by the latest Consumer Price Index (CPI) report showing inflation holding steady, increasing investor hopes for a potential Federal Reserve interest rate cut [1]. Despite the positive market sentiment, Yeti missed Wall Street's revenue expectations in Q2 CY2025, with sales falling 3.8% year on year to $445.9 million. However, the company's non-GAAP profit of $0.66 per share was 20.4% above analysts' consensus estimates [4].

William Blair analyst Phillip Blee maintained a Buy rating on Yeti, citing strong performance and robust growth prospects. The company reported impressive Q2 sales and comparable growth, despite fluctuating demand, and provided positive guidance for the second half of the year [2]. Blee's optimistic outlook is reinforced by Yeti's ability to manage operations efficiently and capture market share. Yeti's commitment to product innovation and expansion into new categories, such as packs and luggage, is seen as a key driver for future growth.

Management attributed the Q2 performance to cautious consumer behavior, inventory constraints during a major supply chain transition, and a highly competitive promotional environment in the Drinkware segment. However, management is confident in a second-half improvement, underpinned by new product launches, ongoing supply chain improvements, and international momentum, especially in Europe and Japan [4]. The company's accelerated move to diversify manufacturing away from China is nearly complete, with less than 5% of cost of goods sold expected to be exposed to U.S. tariffs by year-end [4].

Yeti's leadership continues to focus on innovation and market expansion as primary levers for future growth. The company's Rule of 40 score of 24% and Bessemer Rule of X of 27% demonstrate its ability to balance growth and profitability—a rare feat in retail [2]. Despite short-term challenges, such as a -3.6% demand comparable growth in Q2 2025, Yeti's strong fundamentals and growth potential justify a Buy rating.

References:
[1] https://finance.yahoo.com/news/yeti-yeti-stock-know-190051600.html
[2] https://www.ainvest.com/news/arhaus-maintains-buy-rating-strong-q2-performance-growth-potential-2508/
[4] https://finance.yahoo.com/news/yeti-q2-deep-dive-soft-072215879.html