Financial Data and Key Metrics Changes - The company reported a 3% increase in sales to $125 million, driven by growth in grills and consumables categories [5][20] - Adjusted EBITDA rose by 12% year-over-year to $14 million, reflecting successful expense reduction initiatives [5][25] - Gross profit decreased to $49 million from $52 million, with gross profit margin contracting 360 basis points to 38.7% due to tariff impacts [22][25] Business Line Data and Key Metrics Changes - Grill revenues increased by 2%, primarily due to higher average selling prices from pricing increases implemented earlier [21] - Consumables revenues grew by 12% to $25 million, driven by strong sell-through of wood pellets and expanded distribution [18][21] - Accessories revenues decreased by 4% to $24 million, largely due to lower MEATER sales, although Traeger branded accessories saw over 20% growth [19][21] Market Data and Key Metrics Changes - The overall grill market is slightly down, influenced by higher price points and interest rates affecting consumer discretionary spending [51][52] - The company is maintaining its market share despite a challenging environment, with unaided brand awareness increasing by 100 basis points [54] Company Strategy and Development Direction - The company is focused on Project Gravity, aiming for $50 million in cumulative run rate savings by optimizing channels and enhancing operational efficiency [10][26] - The strategy includes exiting unprofitable channels, such as the Costco roadshow, and shifting to a distributor model in European markets [12][14] - The company plans to redirect its website traffic to retail partners to improve consumer experience and profitability [13][30] Management's Comments on Operating Environment and Future Outlook - Management reiterated guidance for fiscal year 2025, expecting revenues between $540 million and $555 million, down 8%-11% [17][28] - The company anticipates continued pressure on unit volumes due to pricing increases but expects growth in consumables [28] - Management expressed confidence in navigating the current environment while laying groundwork for sustainable growth [29][55] Other Important Information - A non-cash impairment charge of $75 million was recorded due to a sustained decrease in stock price, resulting in a net loss of $90 million for the quarter [24][25] - The company has liquidity of $167 million with no outstanding borrowings, indicating a solid financial position [25] Q&A Session Summary Question: Clarification on exiting DTC and redirecting traffic - Management explained that the decision to exit direct-to-consumer (DTC) was based on cost inefficiencies and a desire to improve consumer experience through retail partners [30][31] Question: Revenue loss from phase two distribution strategy - The company expects to walk away from approximately $60 million in revenue but anticipates recapturing this through other channels [39][40] Question: Margin profile of the distributor model in Europe - While there will be a margin impact from the distributor model, the overall cost structure improvements will offset this loss [42] Question: Elasticity response to pricing changes - Management noted that pricing increases led to a decline in unit volumes, but promotional strategies will continue to be employed to manage inventory and profitability [44] Question: Assessment of the overall grill market - The company views the current year as a category growth year despite slight market declines, with expectations for a robust replacement cycle in the future [51][52]

Financial Performance - Revenue for Q3 2025 reached $125 million, a 2.7% increase compared to $122 million in Q3 2024[9, 22] - Gross margin was 38.7% in Q3 2025, compared to 42.3% in Q3 2024[9, 24] - Adjusted EBITDA was $13.8 million, representing an 11.0% margin, compared to $12 million and 10.1% margin in Q3 2024[9, 24] - Adjusted net loss was $7 million in Q3 2025, compared to $4 million in Q3 2024[24] Revenue Mix & Growth Pillars - Grills accounted for 61% of revenue, consumables 19%, and accessories 20%[10, 11] - Consumables revenue increased by approximately 12% in Q3 2025[13] - Accessories line realized double-digit growth[13] Project Gravity - Project Gravity aims for $50 million in annualized run-rate savings once fully implemented by the end of 2026[6, 15, 16] - Phase 1 includes a reduction in force and MEATER centralization, yielding approximately $30 million in savings[16] - Phase 2 includes channel optimization and other productivity measures, yielding approximately $20 million in savings[6, 16] Tariff Mitigation & Balance Sheet - The company is diversifying production outside of China to mitigate tariff risks, expecting a meaningful production shift by the end of 2026[14] - Liquidity at the end of Q3 2025 was $167 million, compared to $177 million in Q3 2024[18] - Net debt was $398 million, compared to $399 million in Q3 2024[18] Fiscal Year 2025 Guidance - Total revenue is projected to be between $540 million and $555 million[26] - Gross margin is expected to be between 40.5% and 41.5%[26] - Adjusted EBITDA is guided to be between $66 million and $73 million[26]

Traeger (COOK) FY Conference Summary Company Overview - Traeger is a Salt Lake City-based company founded in 1986, specializing in premium pellet grills and cooking platforms, including flat top griddles [2][3] - The company has seen significant market share and household penetration growth since the mid-2000s, particularly during the pandemic [2] Financial Performance - The company reported a pullback in revenues due to a timing shift between Q1 and Q2, but sell-through results were satisfactory [4] - Full-year revenue is expected to decline year-over-year, primarily due to pricing adjustments in response to tariffs [5] - The management is focused on profitability, aiming to offset approximately 80% of tariff exposure [5][6] Tariff Impact and Supply Chain - Traeger faces a blended tariff rate in the low 30% range, impacting pricing and overall business operations [8] - The company is implementing a cost management initiative called Project Gravity, targeting $30 million in annual savings [9] - Currently, 80% of grills are sourced from China, with plans to diversify supply chains to Vietnam to mitigate risks [14][15] Market Dynamics - The grill industry is experiencing a downturn, with volumes below 2019 levels due to a pullback in consumer spending post-pandemic [22][27] - The company holds a 3.5% household penetration rate, indicating significant growth potential, especially in regions with lower brand awareness [25][34] Consumer Behavior - Consumer purchasing behavior has shifted towards seeking value and lower price points, impacting sales of higher-priced grills [20][30] - The company believes that the long-term outlook remains positive, as Americans continue to enjoy grilling [28][30] Product Strategy - Traeger aims to maintain a premium brand image while introducing products at more accessible price points to attract a broader consumer base [31][32] - The company is focused on education and awareness to overcome consumer hesitance regarding pellet grills [34][36] Meter Acquisition - The Meter business, acquired in 2021, has faced challenges due to increased competition but is being centralized to improve efficiency and capitalize on synergies with Traeger products [39][41] Deleveraging Strategy - Deleveraging is a priority, with plans to improve EBITDA and utilize excess free cash flow to pay down debt [44][46] Consumer Sentiment - Current consumer sentiment is cautious, particularly regarding big-ticket purchases, influenced by high interest rates and economic uncertainty [50][52] Conclusion - Traeger is positioned for long-term growth despite current challenges, with a focus on profitability, supply chain diversification, and consumer education to enhance market share and household penetration [38][48]

Financial Data and Key Metrics Changes - The company reported second quarter revenues of $145 million, a decline of 14% year-over-year, with adjusted EBITDA of $14 million compared to $27 million in the same period of 2024 [23][28]. - The net loss for the second quarter was $7 million, compared to a net loss of $3 million in 2024, with adjusted net loss of $2 million or $0.01 per diluted share compared to adjusted net income of $7 million or $0.06 per diluted share in the same period in 2024 [27][28]. - Gross profit decreased to $57 million from $72 million in 2024, with a gross margin of 39.2%, down 380 basis points year-over-year [25][26]. Business Line Data and Key Metrics Changes - Grill revenues decreased by 22% to $74 million, impacted by revenue pacing shifts and lower unit volumes of higher-priced grills [23][24]. - Consumables revenues grew by 7% to $36 million, driven by strong sell-through of wood pellets and expanded distribution [20][24]. - Accessories revenues decreased by 12% to $35 million, largely due to declines at Meter, although the rate of decline improved sequentially [21][24]. Market Data and Key Metrics Changes - North America revenues were down 12%, while revenues from the rest of the world decreased by 32% [25]. - The company noted a shift in consumer demand towards lower-priced grill offerings, with strong performance in grills priced under $1,000 [18][19]. Company Strategy and Development Direction - The company is executing Project Gravity, a major initiative aimed at driving efficiencies and improving margins, with an expected $30 million in run-rate cost savings from Phase One [10][12][30]. - The company is diversifying its manufacturing mix away from China, aiming for a significant reduction in production in China by 2026 [8][46]. - The strategic focus is on enhancing profitability and cash flow while navigating tariff impacts and market challenges [32][34]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the brand's strength and consumer appetite for grills, despite macroeconomic challenges and tariff pressures [22]. - The company reinstated guidance for fiscal year 2025, projecting revenues of $540 million to $555 million, down 8% to 11% year-over-year, and adjusted EBITDA of $66 million to $73 million [15][31]. - Management highlighted the expectation for a return to a more normalized mix of direct import fulfillment in the second half of the year, benefiting from tariff mitigation efforts [17][34]. Other Important Information - The company incurred tariff expenses of over $3 million in the quarter, which pressured gross margins [17]. - The company ended the quarter with $412 million in total net debt and a liquidity position of $180 million [28]. Q&A Session Summary Question: Can you talk about the reaction to the price increases, particularly in the wholesale channel? - Management noted that sell-through was robust relative to expectations, despite pacing dynamics affecting revenue recognition [38][40]. Question: Can you provide color on the progress expected in diversifying away from China? - Management indicated that they have been diversifying for a couple of years and expect to be almost entirely outside of China by 2026 [46][48]. Question: What is the outlook for the Meter business given the significant year-over-year declines? - Management acknowledged competitive pressures and high prices but expressed confidence in Meter's long-term potential and integration into the Traeger infrastructure [62][66]. Question: What is the company's view on the investment merits and the outlook for the back half of the year? - Management believes that the worst may be behind them and emphasized the brand's strength and commitment to long-term growth [70][72]. Question: How are the new products like Woodbridge performing? - Management reported strong initial reception for Woodbridge, with positive consumer feedback, despite tariff-related price increases [78][80].

Financial Performance - Revenue for 2Q 2025 was $145 million, a decrease of 13.6% compared to $168 million in 2Q 2024[10, 24] - Gross margin was 39.2% in 2Q 2025, compared to 42.9% in 2Q 2024[10, 27] - Adjusted EBITDA was $14 million in 2Q 2025, compared to $27 million in 2Q 2024, with a margin of 9.8% versus 15.9%[10, 27] - Adjusted net loss was $1.936 million, compared to an income of $7.269 million in 2Q 2024[27, 42] Revenue Mix & Growth Pillars - Grills accounted for 51% of revenue, consumables 24%, and accessories 25%[12, 13] - Consumables revenue increased by approximately 7% in 2Q 2025[15] Tariff Mitigation & Project Gravity - The company expects to offset approximately 80% of the $60 million unmitigated tariff exposure for Fiscal Year 2025[6, 16] - Project Gravity is expected to drive $30 million of annualized cost savings once fully implemented, with realized savings expected to be up to $13 million in FY 2025[7, 18] Liquidity & Debt - The company had $180 million in liquidity at the end of 2Q 2025, compared to $175 million in 2Q 2024[20] - Net debt was $402 million in 2Q 2025, compared to $409 million in 2Q 2024[20] Fiscal Year 2025 Guidance - Total revenue is projected to be between $540 million and $555 million[29] - Gross margin is expected to be between 40.5% and 41.5%[29] - Adjusted EBITDA is projected to be between $66 million and $73 million[29]