YETI Holdings (YETI) had a rough Thursday. The company reported third-quarter results and then trimmed its full-year forecast, and investors responded by knocking the stock down more than 8%.

The culprit? Management pointed to uneven demand in the U.S. and Canada, and warned that cautious consumer spending and bargain hunting could stick around through the fourth quarter. In other words, shoppers are still opening their wallets, but they're doing it carefully and hunting for deals.

The quarter itself wasn't a disaster. YETI reported adjusted earnings of 91 cents per share, up from 61 cents a year earlier. Revenue rose 4.4% to $509.4 million from $487.8 million. Adjusted sales rose 6% to $517.9 million, excluding adjustments tied to the company's 2023 product recalls.

Adjusted gross profit climbed 12% to $305.5 million, and adjusted gross margin expanded 310 basis points to 59%. Lower net tariff costs contributed about 200 basis points to that improvement, while operational factors including pricing and lower inbound freight costs added another 110 basis points, partially offset by higher commodity costs.

Wholesale Growth Offsets Weaker Online Sales

Wholesale sales jumped 19% to $237.3 million, driven by demand in the U.S., Europe and Australia. That helped offset a 6% decline in direct-to-consumer sales to $272.2 million, which the company blamed on weak U.S. e-commerce sales and a shift in Amazon Prime Day timing.

By category, Drinkware sales grew 8% to $284 million, while Coolers & Equipment sales stayed flat at $215.6 million. International sales surged 19% to $119.1 million, led by Europe, Australia and Japan. U.S. sales edged up 1% to $390.3 million.

YETI also repurchased $20 million in shares during the quarter, bringing its 2026 buybacks to approximately $150 million.

YETI Cuts 2026 Forecast As Consumers Pull Back

Now for the part that spooked investors. YETI lowered its full-year adjusted earnings forecast to $2.90-$2.95 per share, down from $2.94-$3.00. Analysts expected $2.98 per share.

The company also cut its revenue forecast to $1.948 billion from $1.999 billion-$2.017 billion. Wall Street expected $2.011 billion.

YETI now expects adjusted sales growth of about 6%, down from its previous forecast of 7%-8%, reflecting softer consumer demand. International sales growth is now expected in the mid-teens, down from the previous forecast of high-teens to 20% growth, primarily due to weaker demand in Canada.

Not everything got worse. The company maintained its adjusted gross margin forecast of 57.5%-58%, and reaffirmed its free cash flow forecast of $200 million-$225 million and capital spending of $60 million-$70 million.

YETI Price Action: YETI Holdings shares were down 8.58% at $39.12 at the time of publication on Thursday, according to market data.