Traeger's Weak Sales Outlook & Tariff Risks Weigh on Growth, Analyst Downgrades Stock

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]