Michael McMullen: Yes. Martin, thank you for the question. So I think, first of all, we were pleased to return to growth in both soft and hard coolers. In soft coolers, obviously it was related to having the recall products back in our lineup but in hard coolers, there was an element of a sell-in compare in wholesale. But at the same time, during Q1, we were also comping against the EOL transition promo, that was an issue in Q4 that we called out. But like we mentioned in our prepared remarks, we saw growth in C&E on both a sell-in and a sell-through basis. But I think the key point is that Q1 is our smallest quarter and there’s a seasonality aspect in coolers to consider. But as we look forward, as we enter the seasonally higher period, we think we’re in a really good position to win in coolers.
We’ve got our entire assortment back in the market of soft coolers and we’ve got new innovation coming in hard coolers. We do believe there’s some sensitivity to higher price point items in the market that still exist. But for the demand that is in the market, we believe we’re in a really great position to go win it. From a competitive standpoint, I think like we’ve said all along, we’ve got — we’ve had competitors in all categories for years. We believe we’ve got the best products in the market and we’re in a good position to win.
Unidentified Analyst: Great. And just kind of on our last thought about sort of softness in high-end items, have the targeted price cuts on certain Roadie and Tundra products help this for demand? And should we anticipate any additional pricing actions as well as any future innovation, will that be at lower price points, just to combat affordability?
Michael McMullen: Yes. I think — so just to touch on the second question, the — we introduced, as Matt called out, we talked about 2 new products, a lower price point — our lowest price point wheeled cooler and then a new entry point hard cooler for the category. I wouldn’t say that’s being done in response to anything happening in the market. This is us just completing what we believe is a full portfolio of the products that meets a number of use cases out there. So I wouldn’t characterize this as being done in response to anything that’s happening in the market. And I think the same thing goes for the price reductions. I mean what we did in Q1 was — and we talked about this last quarter, it was really in response to the new innovation that was coming and making sure that our pricing stack made sense is that the price to value as you go up the portfolio makes sense in the consumer’s mind.
So in terms of what happened in Q1, it was a select number of SKUs. It wasn’t the entire portfolio but it was largely in line with what we expected. We saw the elasticity on a unit basis that we expected and we were pleased with the results.
Operator: Our next question comes from Randy Konik from Jefferies.
Randy Konik: Matt, I wanted to ask a question around innovation. When I think about, let’s say, the last couple of years, I’ve thought about incremental growth being derived a lot from, let’s say, additional color ways to the assortment. But more recently, it appears to me and I could be wrong, that there’s been a sizable impact from form factor changes in innovation as it relates to, let’s say, the french press, or the cocktail shaker, coffee ceramic products, etcetera, on the Drinkware side. Can you maybe kind of give us that — your perspective there on that innovation around as it relates to form factor changes versus color? Because I think what would be interesting there is, if, in fact, a lot of the incremental growth is coming from form factor changes, it just provides a lot more kind of opportunity and changes for existing and new customers to buy into more and more YETI products? I just want to get your perspective there.
Matthew Reintjes: Randy, thanks for the question. I think it’s a combination of things. You’re correct. And as we have continued to scale, as we continue to draw on new audiences domestically and globally into the brand, we’ve seen opportunity to expand our product portfolio within our 2 big groups. Drinkware has expanded. We think in a really thoughtful kind of powerful way as you know from following our story. We focus on our productivity and the leverage we get on each SKU we launch. And the same with C&E, we’ve driven innovation within hard coolers, within soft coolers, expansion of our cargo business, the expansion of our bags, the addition of M&A to drive an accelerant there. And so we do think that it gives us the opportunity to address more consumer needs and more points in time or more points in their day.
So that form factor change, I think you’re going to continue to see a rhythm of us doing that as we expand and diversify the product portfolio. And we think that’s a really impactful way to grow the business. Color does play an important role in not just customer acquisition but also repeat purchase. As people build out their YETI ownership, what we see is that people want more color. They want to add into their portfolio and that’s not just a Drinkware thing, that’s actually across the range. What we really work to do is find a balance in those things. We don’t want to chase smaller and smaller opportunity and more and more bespoke. We want to continue to put big consumer-relevant items out there in form factor, big consumer relevant items out there as it relates to color.
And that’s a formula that’s worked for us. And as we continue to grow and scale the business, it’s a formula we’re seeing work not only in the U.S. but around the world.
Randy Konik: Yes. Very helpful. And then last question and related to that, just give us your long-term vision then around how you think about the MYSTERY RANCH acquisition and product set and then also your ambition around cookware. Just give us your thoughts there again on the long term, that would be very helpful.
Matthew Reintjes: Thanks, Randy. Two things and we’ve said this before, we think those are two very large, highly fragmented categories, very global in nature, both bags and cookware. We think there is an opportunity to leverage YETI’s commercial go-to-market the way we tell brand stories, the way we do our product marketing, the way we cultivate our consumer base. We think it’s a really attractive opportunity in both of those to drive further ownership of YETI repeat purchase further use cases. So I think what you’re going to see in both those instances and I talked about this on the call, we’ll have our real first entry into cookware, the kind of top end of cast-iron later this year. In bags, as we look at taking the some of the ingredients and the capabilities and the talent that came along with the Mystery Ranch acquisition and we combine that with some of the materials and talent and designs that we had at YETI, is bringing that together and really building out our bags portfolios as we think about the opportunity in active and every day and in travel.
And so with the team that we put in place around both of those things, we’re really excited about what that can mean underneath the YETI brand umbrella. And we talk all the time, our focus is on what the TAM is for the YETI brand. And we think both of those categories fit really well underneath that.
Operator: And now we have a question from Anna Glaessgen from B. Riley.
Anna Glaessgen: I think last year, you noted that the introductions of tumbler has brought a lot of new customers into the fold. Can you talk about how these new customers are engaging with the brand? Are you seeing repeat purchase behavior? Any color on that would be great.
Matthew Reintjes: Anna, this is Matt. A couple of things I would say and a little bit to the prior question from Randy. As we keep expanding the product portfolio in what I would call useful ways to the consumer and thoughtful ways for them to engage, we’ve also continued to diversify our consumer base. And as we said in our prepared remarks, the value of our customers continues to go up. The returning and newly acquired customers from a value perspective, we like that dynamic where we can give them more product that’s useful to them. I think when you look at the expansion, what we’re seeing is people diving deeper into our product portfolio, people coming back and repeat purchasing their favorite product. And that’s part of our marketing efforts, it’s part of our product marketing efforts.
