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]

TRAEGER MESTOR PRESENTATION THIRD QUARTER 2025 SAFE HARBOR STATEMENT This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding our organizational focus, our mifigation efforts to offset the direct impact of tariffs, our Project Gravity intilati ...

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]