YETI’s margins are excellent. Here is why this is a problem.

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The consumer goods area is brutally competitive. You put all of your heart and soul into making a great product, charge a fair price, and watch the sales flow. But if you are too much successful, you end up being undermined by someone who creates a pretty good copy of your products and sells them for less.

This is why the power of the brand is so important in this space. Few companies have mastered the task tied with Yeti Holdings (NYSE: YETI), the supplier of popular mugs and coolers. The company’s gross margins of well over 55% are proof that people are willing to pay for Yeti products.

In this five-minute video from June 29, Crazy Motley contributors Brian Stoffel and Brian Feroldi discuss their 1 hour deep dive about the company. They will find out why Yeti might struggle to increase sales without lowering those margins and the effects this could have on the company’s brand.

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Brian Feroldi has no position in any of the stocks mentioned. Brian Stoffel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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