Could YETI Be the Next Big Buyout? Here’s What You Need to Know After the Skechers Deal!

The buzz around YETI Holdings Inc. (NYSE:YETI) has intensified in the wake of Skechers’ blockbuster acquisition deal. Skechers recently announced it would be acquired by 3G Capital for $63 per share in cash—a 30% premium to its 15-day volume-weighted average price. Following this news, Jefferies drew parallels between Skechers and YETI, suggesting that the latter shares several appealing traits such as a strong innovation pipeline, global expansion, and robust brand loyalty. With YETI closing out 2024 with $1.84 billion in sales, 21% EPS growth, and $220 million in free cash flow, the brand’s performance paints a picture of a premium lifestyle company that's highly attractive to private equity or strategic buyers. The company has ramped up innovation, deepened its global footprint, and executed targeted acquisitions—all while maintaining financial discipline. These developments raise the question: Could YETI be the next high-profile acquisition in the consumer goods space?

Strong Brand Equity & Consumer Loyalty

YETI’s most defensible moat lies in its brand equity, which continues to resonate deeply across its core consumer base. In a December 2024 U.S. owner study, a staggering 95% of customers reported they have recommended YETI to peers—marking the seventh consecutive year at this level. This loyalty is no accident. YETI has invested significantly in community engagement, event participation, and premium partnerships that reinforce its brand ethos. With over 200 global brand ambassadors and participation in 200+ consumer events, YETI has embedded itself in the cultural fabric of outdoor enthusiasts, sports fans, and premium travelers. The brand’s presence at events like the European Outdoor Film Tour and NFL playoffs, and collaborations with Red Bull Racing and collegiate teams like Notre Dame and Ohio State, showcase how deeply its identity aligns with high-performance lifestyles. These efforts not only sustain existing customer loyalty but also introduce the brand to newer demographics globally. The breadth of exposure amplifies customer acquisition and reinforces YETI’s positioning as a premium, lifestyle-centric brand. Such brand resilience is a compelling asset for potential acquirers seeking a company with enduring consumer affinity, especially in a landscape where brand trust can significantly reduce marketing costs and drive pricing power. As private equity firms like 3G Capital look for scalable brand assets with sticky customer bases, YETI’s consistent consumer endorsement and high-margin positioning make it a prime target.

Innovation-Driven Growth & Strategic Acquisitions

YETI’s appeal as an acquisition target is significantly bolstered by its proven ability to drive innovation and execute strategic M&A to accelerate growth. In 2024 alone, the company launched 24 new products and introduced multiple new colorways across its portfolio—evidence of a dynamic product roadmap. Categories like Drinkware, Coolers & Equipment, and Bags have seen consistent performance, with the Roadie and Tundra coolers showing sustained success. The company also made notable acquisitions such as Mystery Ranch and Butter Pat, enabling rapid expansion into cast iron cookware and new backpack designs. Furthermore, its recent acquisition of IP for a powered cooler system positions YETI to tap into technology-integrated products, opening new revenue streams. YETI’s approach to M&A has been disciplined—targeting companies or assets that accelerate initiatives already present in its pipeline. This ensures minimal integration risk and rapid product rollouts. For instance, the Bozeman pack, which combines YETI and Mystery Ranch design elements, quickly sold out in 2024 and has inspired a new range launching in 2025. Acquirers looking for companies with self-sustaining innovation engines and the operational capability to execute on them will find YETI especially attractive. This innovation-first ethos, paired with strong commercialization, reduces reliance on any single category or seasonal cycle and boosts long-term valuation potential. Moreover, it offers immediate product line extension opportunities for an acquirer with broader retail or distribution infrastructure.

Global Expansion With Omnichannel Strength

YETI has shown it is not just a U.S.-centric story but a rapidly emerging global brand. International sales grew 30% in 2024 to $339 million, now accounting for 18% of total revenue—a jump from 16% in the previous year. The company’s international expansion strategy has proven effective, particularly in markets like Australia, the U.K., and Germany. It ended 2024 with a retail footprint of over 1,000 doors in Europe and reported a robust 27% international growth rate in Q4 alone. Importantly, YETI is only in the early stages of international growth, offering significant white space, especially in Asia. The brand’s official entry into Japan in January 2025—with local market activation events and wholesale groundwork—highlights its ambition to establish a strong presence in Asia-Pacific, a region with high affinity for premium lifestyle goods. From a channel perspective, YETI’s omnichannel model is also a key asset. Direct-to-consumer (DTC) sales grew 10% in Q4, comprising 68% of quarterly revenue. Meanwhile, the wholesale channel grew 3% and continued to show strong sell-through. With a mix of YETI.com, Amazon, corporate sales, and physical retail stores, the company has created multiple consumer touchpoints that enhance brand engagement and reduce dependency on any single sales channel. This flexibility is crucial in today's shifting retail environment. For potential buyers, this means reduced operational risk and a faster pathway to global scale, especially if they already possess international distribution or e-commerce infrastructure.

Healthy Financials & Consistent Cash Flow Generation

From a financial standpoint, YETI represents a well-managed, cash-rich, and fundamentally strong business that checks all the boxes for a strategic or private equity acquirer. The company closed 2024 with $359 million in cash and generated $220 million in free cash flow—its second consecutive year crossing the $200 million threshold. It reported an 18% increase in operating income to $309 million and 21% EPS growth to $2.73. Margins remain healthy, with gross margins for the year expanding by 170 basis points to 58.6%, aided by lower freight and product costs. Despite macro pressures and product recall-related headwinds, YETI continued to expand both top and bottom lines. The company also repurchased $200 million worth of shares in 2024—approximately 6% of its outstanding float—demonstrating capital discipline and confidence in long-term value creation. Its 2025 outlook remains cautiously optimistic, targeting 5–7% top-line growth and $200 million in additional free cash flow. Notably, the Board authorized an additional $350 million in share repurchases, further highlighting financial flexibility. Importantly, YETI maintains a conservative debt profile, with only $78 million in debt against a strong cash reserve. This pristine balance sheet offers any acquirer a clean starting point with low refinancing risk and ample room for leveraged expansion if desired. These characteristics are particularly attractive to financial sponsors aiming to unlock value via leverage or strategic buyers looking to scale operations without overextending their balance sheet.

Final Thoughts

Source: Yahoo Finance

YETI’s stock performance has been rather poor over the past 6 months making it significantly cheaper for potential suitors. The company’s LTM EV/ EBITDA is down from 11.51x in June 2024 to 7.81x today, making it an even more attractive target. Moreover, the company’s rising brand momentum, global footprint, innovation track record, and cash-generating financial model underscore its attractiveness, especially in light of the recent Skechers-3G Capital deal. It does face its fair share of risks including macroeconomic pressures, FX headwinds, and intensifying category competition—especially in Drinkware. However, when we look at the broader picture, we agree with Jefferies’ assessment about YETI being a very attractive acquisition target especially in the current market scenario.