Company Overview - Traeger (COOK) is expected to report flat earnings of $0.04 per share for the quarter ended March 2025, which represents no change from the year-ago quarter [3] - Revenues are anticipated to be $140.08 million, reflecting a decrease of 3.3% compared to the same quarter last year [3] Earnings Expectations - The consensus EPS estimate has been revised down by 7.69% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10] - The Earnings ESP (Expected Surprise Prediction) for Traeger is -9.09%, suggesting that the Most Accurate Estimate is lower than the Zacks Consensus Estimate [11] Historical Performance - Traeger has not been able to beat consensus EPS estimates in any of the last four quarters, with the last reported quarter matching expectations at $0.01 per share [12][13] Market Reaction - The stock may experience upward movement if the actual earnings exceed expectations, while a miss could lead to a decline [2] - The management's discussion during the earnings call will play a crucial role in determining the sustainability of any immediate price changes and future earnings expectations [2] Industry Context - Reynolds Consumer Products (REYN), another player in the Zacks Consumer Products - Discretionary industry, is expected to post earnings of $0.23 per share, also indicating no change from the year-ago quarter, with revenues projected at $820.18 million, down 1.5% [17] - Reynolds has an Earnings ESP of 3.23%, but with a Zacks Rank of 4 (Sell), it is difficult to predict a beat on the consensus EPS estimate [18]

Core Insights - Traeger, Inc. has launched the Flatrock 2 Zone Griddle, expanding its griddle lineup with a compact design that maintains high performance similar to the Flatrock 3 Zone [1][2][3] - The Flatrock 2 Zone features a two-zone cooking system and streamlined ignition process, enhancing the outdoor cooking experience by providing versatility and efficiency [2][3] - The product is priced at $699 and will be available on Traeger.com and select retailers in the U.S. and Canada [4] Company Overview - Traeger Grills, based in Salt Lake City, is a leader in the wood pellet grill market, known for its innovative outdoor cooking systems that allow for various cooking methods [5] - The company has recently entered the griddle category, further solidifying its position in the outdoor cooking space with versatile cooking options [5] Product Features - The Flatrock 2 Zone includes two distinct cooking zones for precise heat control, ensuring even cooking without hot or cold spots [6] - It incorporates wind-blocking technology for consistent heat coverage and U-shaped burners for reliable cooking performance [6] - The design features EZ-CLEAN™ grease management for easy cleanup and a slimmed-down size suitable for smaller spaces [6] - Customizable cookspace options are available with the Pop-And-Lock™ accessory rail and folding side shelves [6]

Core Viewpoint - Telsey Advisory Group analyst Joseph Feldman downgraded Traeger, Inc. from Outperform to Market Perform, lowering the price forecast to $2.50 from $4.00 due to challenging performance trends expected in 2025 [1] Group 1: Financial Guidance and Performance - Traeger provided disappointing guidance for 2025, forecasting flat sales at the midpoint of $595 million to $615 million, which is below the FactSet consensus of $628 million [1] - The analyst has lowered the 2025 sales forecast to $605 million from $632 million and expects adjusted EBITDA to be $75 million, down from a previous estimate of $90 million, reflecting a contraction in the adjusted EBITDA margin to 12.3% from 14.2% [5] Group 2: Market Conditions and Risks - Consumer caution due to elevated interest rates and inflation continues to affect spending on big-ticket items, which may impact Traeger's sales [2] - The guidance does not account for potential tariff impacts under the new Trump administration, which could hurt sales as around 50% of products are sourced from China [2] - Macroeconomic challenges are projected to continue affecting demand, with tariffs adding further downside risk [4] Group 3: Management Changes and Strategic Initiatives - Long-time CFO Dominic Blosil will step down at the end of the first quarter of 2025, with Joey Hord, Traeger's SVP of Finance and Strategy, set to replace him [3] - Traeger is introducing innovations like the Woodbridge line and exploring adjacent product categories, aiming to drive recurring revenues through its consumables business and grocery distribution while expanding internationally [4] - The analyst suggests that Traeger may still outperform the industry due to efforts in increasing brand awareness through marketing and customer engagement [3] Group 4: Future Projections - For 2026, the analyst projects 6% sales growth to $642 million and adjusted EBITDA of $90 million [5]

Financial and Operational Restrictions - The First Lien Credit Agreement imposes significant operating and financial restrictions, limiting the company's ability to incur additional debt, make investments, or engage in fundamental changes [216]. - Breaching the covenants of the First Lien Credit Agreement could lead to default, allowing creditors to accelerate debt repayment and potentially resulting in bankruptcy or liquidation [217]. Cybersecurity and Data Privacy - Cybersecurity threats are increasing, and any breach could lead to significant financial penalties, legal liabilities, and damage to the company's reputation [225]. - The company is subject to various data security frameworks and laws, and non-compliance could result in fines and restrictions that adversely affect its business [230]. - Insurance coverage for cybersecurity incidents may be limited, and significant claims could exceed available coverage, impacting financial results [231]. - The company collects and processes personal data, subjecting it to evolving legal obligations related to privacy and security, which could result in liability if not complied with [232]. - The California Consumer Privacy Act (CCPA) requires companies to provide disclosures to California consumers and allows them to opt-out of certain data disclosures, with civil penalties for violations [234]. - The General Data Protection Regulation (GDPR) imposes fines of up to €20 million or £17.5 million, or up to 4% of annual global revenue for non-compliance, whichever is greater [237]. - China's Cybersecurity Law mandates that personal information of Chinese citizens must be collected based on legitimacy, justification, and necessity, with fines up to RMB 100,000 for non-compliance [239]. - The Personal Information Protection Law (PIPL) in China can impose fines of up to RMB 50 million or 5% of the previous year's total annual revenue for violations [243]. - The Data Security Law requires important data to be stored locally in China and imposes penalties for non-compliance, including fines up to RMB 50 million [240]. - The California Privacy Rights Act (CPRA) significantly modifies the CCPA and expands consumer rights regarding sensitive personal data [236]. - The enactment of the CCPA has led to similar privacy statutes being enforced in thirteen states, with more expected to follow, increasing compliance complexity [236]. - Companies must maintain adequate security measures to comply with varying state laws on data breaches, requiring significant resource investments [236]. - The introduction of new foreign privacy laws may restrict marketing and personalization activities, adversely impacting business operations [238]. - Regulatory investigations and enforcement actions may arise from perceived failures in data privacy practices, potentially harming the company's reputation and financial condition [246]. Corporate Governance and Ownership Structure - As of March 3, 2025, funds or entities affiliated with AEA Fund, OTPP, and TCP owned approximately 60% of the voting power of the company's common stock [257]. - Certain actions by the company or its subsidiaries will require prior written consent from AEA Fund, OTPP, and TCP if they collectively own at least 30% of the outstanding shares, including transactions exceeding $250 million [257]. - The company has opted out of Section 203 of the Delaware General Corporation Law, which may affect takeover attempts and management changes [255]. - The concentration of ownership among a limited number of stockholders may conflict with the interests of other stockholders and affect market price [259]. - The company's stock price may be volatile due to various factors, including anticipated fluctuations in operating results and significant sales by existing stockholders [253]. - Future sales of shares by existing stockholders could lead to a decline in the company's stock price [261]. - The company's certificate of incorporation allows for the issuance of shares of undesignated preferred stock without further action by stockholders [260]. - The doctrine of "corporate opportunity" does not apply to certain stockholders, potentially leading to competition for beneficial opportunities [265]. - The company is classified as a "controlled company," which may limit stockholder protections and result in a board lacking a majority of independent directors [275]. - The company is an "emerging growth company," allowing it to take advantage of reduced disclosure requirements, which may affect the attractiveness of its common stock to investors [276][277]. Financial Performance and Reporting - The company has incurred approximately $40.5 million in accelerated stock-based compensation expense for the year ended December 31, 2022, and $27.5 million for the year ended December 31, 2023, due to modifications and cancellations of stock awards [273][274]. - The company is currently implementing a new product lifecycle management (PLM) system to enhance data compilation and analysis related to product lifecycles, which may incur significant costs and require substantial employee attention [272]. - The company intends to retain future earnings for business operations and expansion, with no plans to declare or pay dividends in the foreseeable future [279]. - The company has made strategic acquisitions, including the purchase of Apption Labs on July 1, 2021, which may involve unforeseen operational difficulties and additional liabilities [281]. - The company has a legal obligation to maintain effective internal controls over financial reporting, with potential implications for financial statement accuracy and investor confidence [267][271]. - The company may face increased legal and financial compliance costs due to reporting requirements under the Sarbanes-Oxley Act and the Dodd-Frank Act [267]. - The company may experience a decline in share price and trading volume if analysts downgrade its shares or cease coverage [278]. - The company may incur additional costs and operational disruptions if it fails to implement necessary systems and procedures effectively [272]. Cash and Debt Management - The company had cash and cash equivalents of $15.0 million and $29.9 million as of December 31, 2024 and 2023, respectively [395]. - The outstanding debt was $403.6 million and $403.8 million as of December 31, 2024 and 2023, respectively [395]. - For every 100 basis point increase in interest rates, the company would incur approximately $4.0 million of additional annual interest expense [395]. Market and Economic Risks - The company is exposed to commodity price fluctuations, particularly in steel, which is a primary raw material for manufacturing [399]. - A 25% tariff on all steel imports will become effective on March 12, 2025, which may impact costs [399]. - The company may face adverse effects from sustained high inflation rates if selling prices do not increase accordingly [401]. - The company utilizes hedging strategies to manage currency transaction risks but cannot guarantee effectiveness [286]. - The company is subject to various legal proceedings that could materially harm its business and financial condition [283].

Financial Data and Key Metrics Changes - The company reported a 3% revenue growth in Q4 2024, with adjusted EBITDA of $18 million, up 41% from Q4 2023 [10][11][48] - Gross margin improved by 410 basis points year-over-year, reaching 40.9% in Q4 2024 [10][46] - For the full year 2024, adjusted EBITDA grew by 34%, and gross margin expanded by 540 basis points [12][43] Business Line Data and Key Metrics Changes - Grill revenues increased by 30% year-over-year to $78 million in Q4 2024, driven by strong sell-through during the holiday season and the launch of the Woodridge series [44][23] - Consumables revenue grew by 25% to $31 million, supported by increased replenishment and new distribution at Walmart [27][44] - Accessories revenue declined by 24% to $60 million, primarily due to underperformance at Meater [30][44] Market Data and Key Metrics Changes - North America revenues increased by 11%, while revenues from the rest of the world declined by 39%, largely influenced by Meater's performance [45][109] - The company noted that the grill market is expected to grow modestly by 1% to 2% in 2025, following three years of decline [70][71] Company Strategy and Development Direction - The company aims to increase brand awareness and market share, with household penetration currently at 3.6% [14][39] - Strategic initiatives include enhancing social media engagement and partnerships with culinary brands to drive brand activation [15][17] - The company plans to focus on boots-on-the-ground sales activation efforts in 2025, including a roadshow program at Costco [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's health and consumer demand for grills, despite an uncertain macroeconomic environment [38][39] - The company is guiding for revenues of $595 to $615 million in 2025, reflecting a potential decline of 2% to growth of 2% compared to 2024 [35][51] - Management acknowledged challenges related to tariffs and their impact on the business, emphasizing proactive strategies to mitigate potential effects [36][37] Other Important Information - Dom Blosil, the CFO, announced his transition out of the role, with Joey Hord set to take over [40][41] - The company ended 2024 with $15 million in cash and cash equivalents and $409 million in total debt [48][49] Q&A Session Summary Question: Expectations for the accessories business in 2025 - Management is conservatively forecasting Meater's performance and believes there are opportunities for improvement through retail expansion [60] Question: Impact of advertising spend on Meater's performance - Management noted that Q1 insights may not be indicative of future performance due to the seasonal nature of Meater's business [62] Question: Overall grill market outlook for 2025 - Management expects modest growth in the grill market, with Traeger gaining market share in 2024 [70][72] Question: Strategy for lower price point grills - The company plans to continue leveraging successful promotions at lower price points while introducing the Woodridge series at a premium price [76] Question: Inventory levels and tariff anticipation - The increase in inventory was primarily tied to the Woodridge launch rather than anticipatory tariffs [79] Question: Long-term leverage goals - The company aims to maintain leverage at or below three turns, with a focus on debt paydown and EBITDA growth [90][93] Question: Update on manufacturing partners in Vietnam - The company is progressing with its second global manufacturing partner in Vietnam and expects to be in mass production soon [97][98] Question: Recent trends in international sales - The decline in international sales is largely due to Meater's performance, which significantly impacts the overall numbers [109]

Core Insights - Traeger reported revenue of $168.64 million for the quarter ended December 2024, reflecting a year-over-year increase of 3.2% and surpassing the Zacks Consensus Estimate of $164.62 million by 2.44% [1] - The company's EPS was $0.01, a significant improvement from -$0.08 in the same quarter last year, although it matched the consensus EPS estimate [1] Revenue Breakdown - Net sales from Grills reached $78 million, exceeding the three-analyst average estimate of $62.12 million, marking a year-over-year increase of 30.2% [4] - Net sales from Consumables were $30.70 million, surpassing the average estimate of $26.97 million, representing a year-over-year growth of 24.8% [4] - Net sales from Accessories totaled $60 million, falling short of the estimated $75.76 million, indicating a decline of 24.1% compared to the previous year [4] Stock Performance - Traeger's shares have declined by 7.1% over the past month, while the Zacks S&P 500 composite has decreased by 3.5% during the same period [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Traeger reported quarterly earnings of $0.01 per share, matching the Zacks Consensus Estimate, and showing improvement from a loss of $0.08 per share a year ago [1] - The company achieved revenues of $168.64 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 2.44% and up from $163.48 million year-over-year [2] Financial Performance - Traeger has not surpassed consensus EPS estimates over the last four quarters, with the latest quarter reflecting a loss of $0.06 per share as expected [1] - The company has topped consensus revenue estimates four times in the last four quarters [2] Stock Performance - Traeger shares have declined approximately 6.3% since the beginning of the year, contrasting with the S&P 500's decline of 0.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.07 on revenues of $150.24 million, and for the current fiscal year, it is $0.18 on revenues of $624.28 million [7] - The trend of estimate revisions for Traeger is mixed, which may change following the recent earnings report [6] Industry Context - The Consumer Products - Discretionary industry, to which Traeger belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, which may impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry outlook can materially affect stock performance [5][8]

Financial Data and Key Metrics Changes - The company reported a 3% revenue growth in Q4 2024, with adjusted EBITDA of $18 million, up 41% from Q4 2023 [10][11][48] - Gross margin improved by 410 basis points year-over-year, reaching 40.9% [10][46] - For the full year 2024, adjusted EBITDA grew by 34%, and gross margin expanded by 540 basis points [12][44] Business Line Data and Key Metrics Changes - Grill revenues increased by 30% year-over-year to $78 million in Q4, driven by strong sell-through during the holiday season and the launch of the Woodridge series [23][44] - Consumables revenue grew by 25% to $31 million, supported by increased replenishment and new distribution at Walmart [27][44] - Accessories revenue declined by 24% to $60 million, primarily due to underperformance at Meater [30][44] Market Data and Key Metrics Changes - North America revenues increased by 11%, while revenues from the rest of the world declined by 39%, largely influenced by Meater's performance [45][109] - The company noted a significant demand for lower-priced grills, confirming the strategy to focus on accessible price points [24][76] Company Strategy and Development Direction - The company aims to increase brand awareness, with household penetration at only 3.6%, indicating a significant long-term growth opportunity [14] - Strategic partnerships and brand activation efforts, including collaborations with culinary brands, are part of the growth strategy [17][26] - The company plans to double its roadshow program at Costco in 2025 to enhance consumer education and brand awareness [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's health despite macroeconomic uncertainties, with expectations for modest growth in the grill market in 2025 [38][70] - The company is preparing for potential impacts from tariffs, with ongoing strategies to mitigate risks [36][37] - For fiscal year 2025, the company is guiding revenues of $595 to $615 million, reflecting a potential decline or slight growth compared to 2024 [35][51] Other Important Information - Dom Blosil, the CFO, announced his transition out of the role, with Joey Hord set to take over [40][41] - The company ended 2024 with $15 million in cash and cash equivalents and $409 million in total debt [48][49] Q&A Session Summary Question: Expectations for the accessories business in 2025 - Management is conservatively forecasting Meater's performance and believes there are opportunities for improvement through retail expansion [60] Question: Impact of advertising spend on Meater's performance - Management noted that Q1 insights may not be indicative of future performance due to Meater's revenue concentration in Q4 [62] Question: Overall grill market expectations for 2025 - Management expects modest growth in the grill market, with a potential increase in prices and a return to a more normalized replacement cycle [70][71] Question: Strategy for lower price point grills - The company plans to continue leveraging the success of lower-priced models while introducing the Woodridge series at a premium price point [76] Question: Inventory levels and tariff anticipation - The increase in inventory was primarily due to the Woodridge launch, not specifically for tariff anticipation [79] Question: Long-term leverage goals and free cash flow expectations - The long-term goal is to maintain leverage at or below three turns, with free cash flow expected to be similar to 2024 [90][91]

"I am pleased with our solid finish to Fiscal 2024. In the fourth quarter, our grill revenues were better than expected, driven by healthy consumer demand at retail as well as load in of our new Woodridge series of wood pellet grills. We again saw significant gross margin expansion, which allowed us to exceed our Fiscal Year 2024 Adjusted EBITDA guidance. Qverall, we made a lot of progress on our key strategic initiatives in 2024. This includes increasing brand awareness and market share, investing into our ...

Revenue Performance - Total revenues increased 3.2% to $168.6 million in Q4 2024, compared to $163.5 million in Q4 2023[4] - Grill revenues surged 30.2% to $78.0 million in Q4 2024, driven by higher unit volumes[8] - Full year 2024 total revenues decreased 0.3% to $604.1 million, compared to $605.9 million in 2023[9] - North America revenues increased 11.2% in Q4 2024, while Rest of World revenues decreased 38.6%[5] - The company expects total revenue for Fiscal Year 2025 to be between $595 million and $615 million[18] Profitability Metrics - Gross margin improved to 40.9%, up 410 basis points from 36.8% in the prior year[6] - Adjusted EBITDA for Q4 2024 was $18.4 million, up from $13.0 million in Q4 2023[8] - Full year 2024 adjusted EBITDA increased 34.1% to $81.9 million from $61.1 million in 2023[12] - Gross profit for Q4 2024 increased to $68,890,000, up 14.0% from $60,137,000 in Q4 2023[23] - Adjusted EBITDA for Q4 2024 increased to $18,361,000, compared to $12,982,000 in Q4 2023, reflecting a margin improvement from 7.9% to 10.9%[32] Net Loss and Expenses - Net loss narrowed to $7.0 million in Q4 2024, compared to a net loss of $24.0 million in Q4 2023[8] - Net loss for the year ended December 31, 2024 was $34,008,000, a significant improvement compared to a net loss of $84,402,000 in 2023[25] - Total other expense for Q4 2024 was $8,705,000, a decrease from $11,582,000 in Q4 2023[23] - The company reported a comprehensive loss of $40,612,000 for the year ended December 31, 2024, compared to $96,725,000 in 2023[23] - Stock-based compensation expenses decreased to $4,837,000 in Q4 2024 from $6,023,000 in Q4 2023[32] Cash Flow and Operating Activities - Cash provided by operating activities for the year was $23,888,000, down from $64,042,000 in 2023[25] - Cash, cash equivalents, and restricted cash at the end of the period was $14,981,000, down from $29,921,000 at the end of 2023[25] Interest and Shares - The company incurred interest expense of $33,500,000 for the year ended December 31, 2024, compared to $31,275,000 in 2023[25] - Interest expense increased to $8,192,000 in Q4 2024 from $7,867,000 in Q4 2023[32] - Weighted average diluted shares outstanding increased to 129,174,440 in Q4 2024 from 125,094,571 in Q4 2023[32] Earnings Per Share - The company reported a basic and diluted net loss per share of $0.05 for Q4 2024, compared to $0.19 in Q4 2023[23] - The company reported a net loss per diluted share of $0.05 in Q4 2024, improving from a loss of $0.19 per diluted share in Q4 2023[32]