Greetings. Welcome to YETI's First Quarter 2019 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Tom Shaw, Vice President of Investor Relations. Thank you. You may begin.

Good morning, everyone and thanks for joining us to discuss YETI Holdings first quarter 2019 results. Before we begin, we'd like to remind you that this conference call will include forward-looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. These statements are detailed in our risk factor discussions that can be found in this morning's press release as well as our filings with the SEC, all of which can be found on our website at investors.yeti.com. We undertake no obligation to revise or update any forward-looking statements or information. During our call today, we'll also reference certain non-GAAP financial information, including adjusted items. Reconciliations of GAAP to non-GAAP measures as well as the descriptions, limitations and rationale for using each measure can be found in the supplemental financial tables included in this morning's press release and in our filings. We use non-GAAP measures as a lead in some of our financial discussions as we believe they more accurately represent the true operational performance and underlying result of our business. Today's call will be led by Matt Reintjes, President and CEO of YETI; and Paul Carbone, CFO. Following our prepared remarks, we'll open the call for your questions. So with that, I'll turn the call over to Matt.

Thank you, Tom, and good morning, everyone. We appreciate you taking the time to join us on our call today. As you can see from our numbers this morning, YETI is off to get a good start in fiscal 2019. First quarter revenues were up 15%, and gross margin expanded 700 basis points. We're pleased with the continued strength and balanced performance we experienced across categories and channels during the period. Our gross margin expansion demonstrates a combination of high-quality growth, brand strength and execution of our supply chain strategy. While we continued to expand our marketing reach to drive awareness, consideration and purchase, we also meaningfully moved the bottom line forward with adjusted operating margin up 370 basis points year-over-year and 870 basis points on a 2-year basis. Shifting to our product portfolio. We have sustained the momentum we generated in 2018. While I will discuss our approach to innovation in a moment, our products continued to be well reviewed by customers and recognized across both our historical media partners and increasingly broader lifestyle outlets. For example, Outside magazine dubbed our Rambler 14-ounce mug the best mug ever made. Textbook that's WIRED Magazine named our stackable pint the best overall travel mug. Gear Patrol wrote, Who Needs Yeti's Massive New Mug? Everyone. And Conde Nast Traveler named our Rambler 26-ounce bottle as one of the best water bottles for taking on the road. Importantly, the recognition of our brand and products was not limited to the Drinkware category. The addition of our wind-blocking, waterproof and machine-washable low-lint blanket to Popular Mechanics' Ultimate Camping Gear Guide validates our approach to innovation. And you will see more evidence of this in the upcoming seasons. Recognition is also beginning to expand beyond the United States with Australia's popular homeware magazine, Inside Out,…

Thanks, Matt, and good morning, everyone. Let me begin with an overview of our strong first quarter results, followed by our updated fiscal 2019 outlook and some of the quarterly nuances for the balance of the year. Starting with the first quarter; net sales increased 15% to $155.4 million compared to $135.3 million in the year ago period. Sales reflected strong demand overall that was ahead of plan and also benefited from some originally planned second quarter wholesale orders that came through in the final weeks of the first quarter. These orders represented approximately $5 million in revenue and contributed approximately 400 basis points to growth in the period. Additionally, and as expected, our sales growth include an approximate 300 basis point unfavorable impact from the change in revenue recognition related to the Amazon Marketplace. I'll discuss this dynamic shortly as it relates to our outlook. Turning to net sales by channel; direct-to-consumer net sales for the first quarter increased 28% to $61.7 million compared to $48.3 million in the same period last year. Channel performance was led by our Drinkware category and we were pleased with the strong performance across yeti.com, YETI Custom Shop and Amazon Marketplace. Wholesale net sales for the quarter increased 8% to $93.6 million compared to $87 million last year with the increase largely coming from growth in our Coolers & Equipment sales. By category, first quarter Drinkware net sales increased 20% to $91 million compared to $75.8 million in the prior year quarter, primarily driven by the continued expansion of our Drinkware product offerings, including new colors that Matt mentioned and strengthened our customized business. For those of you keeping track, the new Rambler 24-ounce mug is back in stock after quickly selling out during its March debut on our website. Coolers & Equipment…

[Operator Instructions] Our first question is from Randy Konik with Jefferies. Please proceed.

Good morning. I have a number of questions. But Matt, I want to start off with thinking about the comments you said around international, the penetration rate doubled already what it was last year. So maybe if you could just expand upon those comments or just about initial learnings from the new markets that you penetrated. What's different about them maybe perhaps than what you're seeing in the U.S? And then give us a little more color on what you talked about with Europe? That was just that first area.

Yes, thanks, Randy. Good morning. International remains an incredibly important part of our long-term growth strategy and we're approaching it with that mindset, which means we're not rushing headlong into markets and trying to chase it quickly. What we're trying to do is build a similar playbook that we built in the U.S., which is really a balanced focus around direct-to-consumer and wholesale, building out our ambassador roster so we have those enthusiasts that create the influence halo, driving event activations. The early reads continue to be very strong in Canada, Australia and Japan. Product receptivity has been very high. I would say the similarities we see in the U.S. are greater than the differences. We tend to see a product portfolio represented pretty balanced and consistent with what we're seeing in the U.S. We're seeing a strong receptivity to our direct-to-consumer efforts in Australia and Canada, in particular. We haven't started those direct-to-consumer efforts in Japan yet. And good placement at what I would consider a diverse wholesale partners. And so the U.S.'s experience is actually informing a lot of how our teams in Canada, Australia and our partner in Japan are expanding. One of the things that we continue to work on as -- and it's part of the build-out as we think about broadening in Asia and broadening in Europe is building out our supply chain support to be able to ready access those markets and putting in that infrastructure. But overall, we feel very good about where the business is. One of the things that you'll see later this year is we're going to be launching, as I mentioned, yeti.ca. So we have -- we're putting in a more efficient website and a more efficient fulfillment structure in Canada to be able to satisfy the growing direct-to-consumer demand in Canada. We have that in place in Australia. As we think about broadening to Europe and Asia, we have two people on the ground in Europe, right now, looking at the European market, building relationships with ambassadors and partners there and a little bit of the putting-the-ground game in, in advance of growing out fully in the market.

Got it. That's very helpful. The second kind of topic area I wanted to explore is one thing we talk about that's unique about the brand is this brand kind of resonates with pros and Joes, if you will. On the Joe side, which, I guess, I'm a Joe, a normal person, how do you think about that when you think about design philosophy and/or marketing? As an example, like the Tundra Haul, I personally wouldn't want to just carry one of your coolers. But with the Haul, it makes it very easy for myself and my wife to take it to the beach. You did -- you changed your marketing, it looks like, for Mother's Day where you showed Mom working in a garden or something like that with showing different use case for the product. So maybe give us some perspective on how you're thinking about just the design philosophy and/or marketing philosophy around needing this brand just resonating with pros and Joes, if you will.

Yes, absolutely. When you think about our products, whether you are putting our products to use in a professional capacity or you're putting our products to use in a recreational capacity, that same product translates between those two environments. It's the cooler that's used by the hunter or the angler and the ones used in the backyard barbecue. Performance same, similar function. And so it's really around creating the moments and creating the resonance with the consumer. I think when we think about that delineation is most of our consumers, even those who professionally take -- do one of the more enthusiast pursuits, they also have another half to their life. And I think what you see in our marketing a number of our, you mentioned the Mother's Day advertising and marketing, those are people who their professional life is actually the enthusiast sports that we pursue. They just have another side to their life. And so when we think about our products following the consumer through the different stages of their life, whether it's on a weekend being pursuit-driven and during the week going to work or going to the week -- during the week and through the weekend being a parent, we want our products to surround that consumer's life. And so we continue to think about our innovation in that way, we continue to think of our product that way. And the more we can keep YETI as part of your life as you move through those different phases of who you are, we think that's the best way to build the long-term success of the brand.

And the last question; Dick's Sporting Goods said on their call kind of like they're pretty excited about your brand and your products and also talked to, I assume, the apparel -- the T-shirts coming into the store that they're excited about. Not that you're going to be an apparel company, by any means, but it kind of speaks to me that the brand is just wanted in any capacity from a trucker hat to a T-shirt to the products you're built on around the coolers. So what is that telling you around what you're seeing at, let's say, DICK's Sporting Goods or consumers trying to buy products that you wouldn't normally think they would want to buy from you. What is that telling about the brand?

Yes. We've believed for a really long time that the brand halo and the brand reach and the consumer permission to expand the product portfolio under the brand is much bigger than the portfolio we have today. I think the hats and tees and the desire to engage in that way in the more wearable and apparel has been obvious to us as we built up from the very beginning, and you mentioned DICK's Sporting Goods has done a very nice job of displaying that apparel. What we're seeing is that the reaction from the market has been very positive and very receptive to the expansion of our portfolio whether that's in hard goods, soft goods or bringing some vibrancy into our apparel business.

Very helpful. Thanks guys.

Our next question is from Jim Duffy of Stifel. Please proceed. Jim are you there? Please check and see if your line is muted? Okay. We will move on to our next question from Sharon Zackfia with William Blair. Please proceed.

Hi, good morning. Hopefully you can hear me.

We can.

Okay, perfect. So Two questions; I guess, first on tariffs. If you could quantify, are you expecting an increase at all this year or did you kind of take that out of the guidance? And if so, what was the benefit if you could quantify that? And then, secondarily, is there any way you can measure kind of the pace of new customer acquisition for YETI and how that's trending or what percent of your sales at this point are new versus repeat customers?

Great. Let me start. So on tariffs, our original guidance that we talked to you about in February had tariffs starting -- ticking up to 25% in March 1. Our revised guidance that we put out this morning, our updated guidance, has tariffs going up to 25% in the beginning of June. So it's unknown with how the 10% for May and obviously March that we actualize through it. Tariffs continue year-over-year to be a negative, and in the first quarter, impacted gross margin by about 70 basis points to the negative at the 10% and we would see that continue and then increase when we go to -- if we go to 25%. But right now, our outlook assumes they go to 25% the beginning of June.

Sharon, it's Matt. I'll take the second question. As we think about understanding our evolving customer base, because of our balance between direct-to-consumer and wholesale, we have a bit of our business that's an anonymous purchase through the wholesale channel so whether it's repeat customers or new customers. What we do are a number of things. Our twice-a-year brand study and our once-a-year owner study gives us some window into that. Those studies will be coming out of the field collectively in the second quarter and so we'll have some further insights into what we see in the mix and the shift in our customer, some information that we've shared in the past. We continue to see healthy growth in our email database of unique buyers. So that gives us some window into the balance being -- we obviously have the direct purchases on yeti.com and YETI Custom Shop. We continue to like the balance of receptivity we're getting. As I mentioned on the call, the Falcon results and the traffic that we drove with heavy traffic to yeti.com and the balance of new to yeti.com versus existing, all those things lead us to believe we're continuing to not only cultivate the brand fans but that we're continuing to acquire and expand. And I think as we think about geographic expansion, we continue to see very good growth in the markets that we're targeting that happen to be in the most urban dense -- population-dense markets in the U.S. So we'll continue to see all the dynamics that we like to see as far as that balance of stoking and fostering our legacy and historical customers and acquiring new.

Our next question is from Robby Ohmes with Bank of America Merrill Lynch. Please proceed.

I actually wanted to see if I could get you guys to talk a little bit more about the 2019 revenue outlook and just maybe to give us some color or how to think about a couple things. So when I take the $5 million out, it looks like wholesale grew about 2% in the first quarter. And then I want to check, Paul, the Amazon was 300 basis points unfavorable to D2C in the first quarter, did I -- is that correct?

You're right on the $5 million. If you take that out, that would give you wholesale at about plus 2%. The Amazon Marketplace accounting shift or revenue recognition was approximately 300 basis points to the total company.

Got you. And does that flow through -- is that a wholesale or a D2C impact?

That would be a D2C impact.

So D2C grew -- if I take that out, so D2C grew 31% if I add back that 300 basis points in the first quarter?

I would add back, D2C was 60% -- 40% of the business. So you would have to actually gross that up. So I have D2C if you would add that back, about -- growing about 34%.

Got it, that's great. And then so my question is just any color you can give us on how to think about the rest of 2019. Some things going on. On the wholesale side, you're lapping strong growth at DICK's Sporting Goods. Should we be thinking, you kind of mentioned that you're going to lead with -- that 2019 is going to be led by D2C. Maybe some color on how much D2C is going to lead it relative to wholesale? Should we be thinking low single-digit wholesale growth for this year, and some color on lapping the strong growth at DICK's Sporting Goods? And another question would be just the Camino Carryall, kind of a separate question. Is that more of a wholesale product for the independent channel? Or is that a big DICK's Sporting Goods item? Or is that really mostly a driver on D2C?

Robby, let me start with the sales and then Matt will give a little bit more color overall and then on the Camino. So let me start by saying we feel really good about how we started the year, particularly with our top line performance and margin expansion. We also recognize it's early in the year, and in absolute dollar terms, it's the smallest quarter. So we are maintaining our full year top line outlook at 11.5% to 13% growth while raising the bottom line and the EPS guidance as you saw this morning. With that, our expectations of the first half and the second half haven't changed. So we still continue to expect double-digit sales growth in the second half of the business, end of the year. And overall, with the shifting between Q1 and Q2, as we talked about with the wholesale orders, we expect to be on our original plan for the first half. That's how we think about the balance of the year. From a direct-to-consumer versus wholesale, while we don't give an outlook at that level, I would turn everyone back to our long-term guidance, direct-to-consumer in the mid-20s and wholesale in the mid-single digits, which is in line with what you had expressed.

And then, Robby, let me take the Camino topic. It remains a product in a category -- or family of products that we're really excited about. We just moved that product into the wholesale channel in late Q1, including at our largest national accounts and at select of our specialty retailers. It continues to be a product that we like the performance in our direct-to-consumer channels and it's early days in the wholesale channel. But it's something that we spent about a year really building up momentum in our direct-to-consumer channels. Built up, as I've talked in the past, north of 1,000, 4.9-star reviews on it and then are just now bringing in the channel and something that we're excited as we move into the gifting season in Q2 and the beginning of summer. A product that -- not only the specific product we feel very good about, but what it opens up for YETI as we move forward.

Thanks, Paul. And thanks, it was really helpful and I already -- I just ordered my carryall so I'm looking forward to get it.

Our next question is from Alexandra Walvis with Goldman Sachs. Please proceed.

Good morning. This is Brooke [ph] on for Alex. I wanted to ask a quick clarifying question on the wholesale timing shift that occurred in 1Q. Can you provide some color on which product lines that that delivery over-indexed to you between Coolers & Equipment versus Drinkware versus other?

It was evenly spread between Coolers & Equipment and the Drinkware. The Other was a small -- there was some of that, but it was a small piece. But it was evenly spread between the two categories.

And if I could just ask a quick follow-up; can you comment on sell-through trends at wholesale? How comfortable are you with the level and quality of inventory in the wholesale market by category?

While we don't comment directly on sell-through trends at retailers, we watch it every single week. We're very comfortable with the inventory levels. It's something, as we have talked about, we have visibility to approximately 75% of our business with direct sell-through either between the direct-to-consumer business or where we see it in POS. So we're very happy with sell-throughs. And certainly, going into our busiest time of the year, moms, dads and grads and the beginning of summer, are comfortable where inventory is in the wholesale channel.

I would just add that most of our conversations this time of year are around inventory levels from it: do we have enough and are we ready for -- or are we ready for those moms, dads, grads and beginning of summer.

Thank you so much and best of luck into the next quarter.

Thank you.

Our next question is from Dan Weaver [ph] with Raymond James. Please proceed.

Thanks. Can you -- perhaps I missed this, but can you let us know how much the $5 million of revenue that shifts to 1Q, how much did that benefit operating profit or earnings per share?

Thanks for the question, Dan. We didn't bring it down to that level, but I would say you can imagine at our gross margin rate, the incremental cost of that because it was wholesale didn't have a lot of outbound freight. So I would take a relative flow-through of probably 30% of that $5 million after the gross margin piece.

So you're saying after the extra gross profit there was a 30% flow-through?

I'm sorry, 30% flow-through on the top line inclusive of gross margin.

Inclusive. And then so that will be a challenge then on the Q2, that one?

Correct.

Second question I have is regarding the retail store rollout with the extra store opening in Denver late this year. If the retail store rollout proves successful, what would you say is the art of the possible on store openings in 2020 and 2021?

So we've talked about opening 4 to 6 stories a year with investors in this group. I would say our point of view today hasn't changed. We're excited about our opening in Charleston. We're excited about the opening in Chicago. And really, would say, that's a question as we round out the back half of this year, have those two openings, work on Denver. No, I wouldn't say we have any different point of view today, but we are excited about the retail rollout and look to get those stores opened.

And then just a final question I have. As retail, over the next few years, becomes a larger part of the business, what kind of changes are there in supply chain and/or IT will be needed to support the retail store network?

So our supply chain continues to evolve even with our growing direct-to-consumer business. So we will continue evolving that piece of it. From an IT perspective, we look to -- there's POS and there's really in-store technology that we are testing a little bit. You'll see some of it in the Chicago store, some of it in the Charleston store. So we have the team here focused on that. And overall, as we build up our team to support the retail rollout in marketing, supply chain, IT, store operations, that's all on our road map as we continue to open more stores.

Okay, great. Thank you.

Our next question is from Kimberly Greenberger with Morgan Stanley. Please proceed.

Thank you so much, good morning. So Matt, I wanted to ask about marketing. It's obviously ramping and it seems to be having a really nice knock-on effect to your revenue growth. If you think about the trajectory of marketing expenditures here over the next several years, I would imagine you continue to expect to ramp it. Ultimately, if you look out several years, ideally, where would you like to see marketing expense settle as a percentage of revenue?

Thanks, Kimberly for the question. And this is one of those questions where I hope our CMO is not on the call and listening in. Your observations are right. We continue to ramp our marketing. What I would say is we are becoming and continue to be laser-focused on being more and more efficient and more and more direct with our marketing spend and targeting the audiences that we want. With Melisa coming onboard, she's been onboard for about 4 months, a big part of what she's done over the last 4 months is looked at all of our historical spend. And before we start to think about ramping spend, we're thinking about the efficiency, effectiveness and the productivity of the spend we have. As Paul has mentioned previously, in the next couple of years, we'll see a bit of deleverage as we continue to spend into it and grow in these new markets. But as we continue to drive the long-term guidance of 10% to 15% top line, we believe that that gives enough air cover for us to continue to spend and expand our marketing absolute dollars while also keeping our long-term marketing spend around 8%.

Okay, perfect. And then I wasn't sure if there were any other product launches that you've got coming this year that you feel comfortable previewing for us. If not, obviously we understand that. Then I just had one other question for Paul.

We're going to continue to be coy about future product launches, and I know it remains top of mind for everybody. We're excited about how the markets receive products. You may have seen this week, we launched our LoadOut GoBox. The early receptivity and our notifications on our yeti.com website, the early reviews on the product that we're seeing from the media have been very strong. So we feel good about both the cadence with which we launch products, how we're evolving into creating awareness and buzz and momentum around it. And I think if you stay tuned to the rest of 2019 and into 2020, we're excited about what we have in the pipeline.

And then, Paul, given that tariffs are, I think, in your plan, starting June and going forward, you've got tariffs, I think you said going to 25%. If the tariffs rate does not move higher to 25% and they remain at 10% for the rest of the year, could you -- is it fair to assume that the 70 basis points -- or actually, I guess, it would be bigger, it'd be more like 100 basis points of benefit in that go-forward plan, is that the right way to think about it or is there a better way to think about it?

I think that's the right way to think about it. We do -- you are correct, we do have tariffs going to 25% in the beginning of June in our plan. If they stay at 10% relative to the plan, we will have favorability. The 70 basis points that I mentioned was actually the year-over-year negative impact at 10%. So in theory, that would continue at a state of 10% but it won't tick up. So there will be gross margin benefit, as we've talked about if it stays at 10%. And then we will internally discuss that that'll flow, can we invest some of that to drive the business. And that will be on a month-by-month decision that Matt and I, as we go through the entire business and P&L, as we talk about how do we continue to invest in the business to drive the top line.

I would add a couple things to that. One, the pushout of the 25% or the maintenance of the 10% hasn't changed anything about our strategy to move our bag and soft cooler supply chain. That's a process and project that's well underway. In fact, in April, I was visiting factories outside of China that are producing -- already in production with our new products. So that project -- that strategic project is well underway and continues to be happening and going at a quick rate regardless of the tariff settle-out.

Got it. Great, thank you for the color.

Our next question is from John Kernan with Cowen and Company. Please proceed.

Good morning, guys and Congrats on all the momentum. Wanted to talk customer acquisition and marketing spend and what you're seeing there in non-heritage markets. If you could talk to how the brand's evolving in some of the non-heritage market, that would be great.

John, as we continue to think about, with Melisa onboard, as I just mentioned a few minutes ago, she's been with us about 120 days now, which I think almost makes her as a pro at YETI, we continue to look strategically at how we honor, respect the core of what has made the YETI brand over the last 12 years and continue to open the aperture of the brand to bring more audiences in. So as we've shifted over the last number of years from being heritage over-indexed to more balanced nationally, we've also continue to invest in our heritage markets, heritage pursuits and then add on our non-heritage markets. Some of that's through media outlet selection, some of it's through messaging and imagery, some of it's through how we position the same products to different consumers for different end-use cases or different end-use environments. So we've seen really good, as I mentioned on the call, really good receptivity to our products in our non-heritage markets. We're continuing to see the dynamic of the consumer embracing YETI even if they're coming into the brands newer versus some of our legacy. And as we get through the second quarter and get through our owner study and our brand study, we'll get more information on evolution of our consumer base and the impact on our awareness. But what we have seen is good growth in our unaided awareness in our non-heritage market, particularly in some of the targeted markets. So we're excited about where that's going and the brand receptivity.

My final question is, just can you talk about some of the learnings you've had so far with the store in Austin? Obviously, you're not talking about a store in Denver. Just anything you've been learning as you kind of refine that brick-and-mortar model?

John, as we think about when we opened that store 2-plus years ago, we thought about it as a brand showcase. We built a quintessential flagship store. It was sparsely populated with product, it was long on storytelling. It represented all the things that are the YETI brand and the history of YETI, but it wasn't a retail space. And that was intentional. At the time, our business was 90-plus percent wholesale. We were thinking about this as a showpiece or a touch-and-feel museum for all things that are YETI. What's interesting is the consumer quickly told us we want to buy things from you. And to the point, I've used this story in the past, we didn't have price tags in the store when we opened it back in 2017. So one of the things that over the last couple of years that's really helped inform as we think about new stores is how to merchandise a store appropriately, how to tell products -- the balance between product stories and brand stories, how to use the store even if it's just to create consumer awareness around your assortment that then benefits our omnichannel, which is something we've seen here in Austin to broadly benefit our omnichannel, both our wholesale partners and our direct-to-consumer channels. So there are a number of learnings. We also built out a purposeful retail team that's helping lead that rollout. And so I would say if we were ignorant three years ago, we're significantly more informed and that information is actually making a material difference in how we think about the store rollout.

Thanks a lot, thank you.

And our final question is from Brett Andress with KeyBanc Capital Markets. Please proceed.

Good morning, thanks for squeezing me in. Paul, first, just a housekeeping. You talked about the tariff favorability, but can you maybe quantify the amount of favorability if it stays at 10% for the remainder of 2019?

So, if it stays at that level for the balance of the year, so in the second quarter, it would be -- it would stay at the 70 basis points, I would say for the full year, it might be $4 million to $5 million. Then there would be offset of what happens, and we've talked about this extensively, what happens if currency changes, so there are these pieces of the offset as well and then the decision if we take that to invest it or flow it through to the bottom line.

Understood. And then if I could follow up on a question that was asked earlier on the new products that you've introduced so far in 2019. Obviously, the beer mug sold out already at one point. But if you look at the success of those products, does it look like you're going to meet your criteria for wholesale distribution at some point later in the year?

I think if you look at our recent track record, we've selectively launched things on yeti.com and kept them on yeti.com. We've put things, as I mentioned on a call in 2018, the three examples of products that we brought to market on yeti.com and then ultimately turn them into omnichannel products, the wine tumbler, the Camino Carryall and the Haul. We like that, the approach we've seen. There are also some things that we will launch like the GoBox that will go broadly into omnichannel right away. So I think we're going to continue to be thoughtful about the product family, what the product is, where our current assortment is in the wholesale channel and how it fits into that, both match with the wholesale channel and also the ability to merchandise, story tell and represent the brand. So it's a pretty dynamic process that our team goes through with every product launch. We think about how it fits into the storytelling in the direct-to-consumer channel, how it fits in the storytelling from a wholesale channel perspective.

Got it. And the last one, on the YETI Custom Shop integration that you guys did in early April, I guess, the shutdown, is that going to have a negative impact in 2Q? And then, conversely, I guess, how has that integration played out? I mean, have you seen any uptake or higher conversion rates towards custom product from that? Just any color there.

Sure. We're very excited about the conversion and having a single purchase path for the consumer, so it was really a consumer-facing project. The shutdown over the weekend is all incorporated in our full year outlook as it was when we gave it in beginning of February as well. We are seeing nice conversion with the one path -- the one purchase path and Drinkware customization has increased along the lines of the way we planned it. So with this project, we planned an increase and we are achieving our internal plan of what we expected this project to deliver. So we're very, very, very happy, and I would say that we would like to thank the teams. This is yeoman's work on a lot of YETIzens to merge these and bring it together into a single path, really for the consumer; this was a consumer-facing project. It was a very, very long weekend of business teams here, IT teams and I know I share that with Matt of thanking everyone for their efforts and the consumer is responding very positively.

Got it, thank you.

This concludes our question-and-answer session. I will now turn the call back over to Matt for closing remarks.

Thank you. Thank you all, again, for joining us. We continue to be very excited about the future of YETI and look forward to speaking to everyone in August. Have a wonderful week.

Thank you. This concludes today's conference. You may disconnect your lines at this time, and have a wonderful day.