From Nasdaq: 2025-03-06 22:15:13

Traeger (NYSE: COOK) held its Q4 2024 earnings call on March 6, 2025, reporting a 3% revenue growth in the quarter and a 30% increase in the grills business. Adjusted EBITDA was $18 million, up 41% from the previous year, exceeding guidance. The company saw an 8% growth in grill revenues for the year, driven by market share gains and improved gross margins. Traeger focused on brand awareness and engagement through social media and influencer content, with significant progress made on long-term growth initiatives.

In a recent article, investment analysts highlighted the success of “Double Down” stock recommendations, showcasing impressive returns for investments in companies like Nvidia, Apple, and Netflix. The analysts are currently issuing “Double Down” alerts for three new companies, emphasizing the potential for significant gains. The article also provides information on non-GAAP financial measures and reconciliation to GAAP measures, available on the company’s website for further reference and analysis. In the fourth quarter, Traeger focused on holiday content featuring influencers like Matt Pittman, leading to increased brand awareness and social media growth. Strategic partnerships with brands like Made In and Bulleit Frontier Whiskey also helped drive engagement and buzz around Traeger. The launch of the new Woodridge series of grills was successful, with strong consumer reception and positive sell-through at retail. Additionally, the company saw a 30% increase in grill revenues in the fourth quarter, driven by holiday promotions and strong performance in lower price point grills.

Traeger also plans to focus on sales activation efforts in 2025, including expanding its roadshow program at Costco warehouses to drive consumer education and brand awareness. Consumables business saw a 25% growth in the fourth quarter, driven by core flavors of pellets and new distribution at Walmart. However, accessories revenue was pressured by a decline at MEATER, which the company aims to address through increased marketing efforts in the future. In Q4, demand and return on advertising spend were lower than expected for MEATER due to heightened competition in the meat probe space and election-related costs. Strategic changes are planned to improve performance, including optimizing spend and product roadmap. Revenue guidance for 2025 is $595-$615 million, with growth expected in grills and consumables, offset by a decline in accessories. Traeger is proactively working on mitigating tariff impacts due to trade policy uncertainty. Despite challenges, Traeger remains confident in brand positioning and product development. CFO Dom Blosil will transition out, succeeded by Joey Hord. Dom highlights Traeger’s financial performance in 2024, including exceeding adjusted EBITDA guidance, gross margin expansion, and revenue growth in grills and consumables. Fourth quarter revenues grew 3% to $169 million, with gross margin expanding to 40.9%. In the fourth quarter of 2023, sales and marketing expenses increased to $34 million, while general and administrative expenses rose to $27 million. The net loss for the quarter was $7 million, with adjusted net income at $2 million. Adjusted EBITDA grew to $18 million, and total net debt decreased to $394 million. For 2025, revenue guidance is $595 million to $615 million, with adjusted EBITDA projected at $75 million to $85 million.

Factors impacting revenue outlook for 2025 include low single-digit growth in grill revenues, consumables revenue growth, and pressure on accessories revenues connected to MEATER. Gross margin is projected to be in the range of 42.2% to 42.8%, with a potential shift toward lower-margin grills. Operating expenses will see an increase in employee-related cash compensation of approximately $7 million. While specifics for the first quarter are not provided, a decline in revenues and adjusted EBITDA is anticipated.

Softness in the accessories business is expected in 2025, with a focus on MEATER performance. The company remains confident in the brand’s potential and is exploring opportunities for retail expansion. Elevated advertising spend during the election impacted the fourth quarter, but a return to normal levels is expected in the first quarter of 2025. However, Q1 results may not be indicative of future performance due to the seasonality of MEATER’s business. In a recent earnings call, MEATER executives discussed the impact of tariffs on their business and predicted a decline in Q1 revenue due to multiple segments being affected. The company is cautious about predicting future quarters due to uncertainty around tariffs and revenue recognition.

CEO Jeremy Andrus shared that the grill market seems to have stabilized after three years of decline, with modest growth expected this year. Traeger gained market share in 2024 and anticipates industry growth to catch up with pre-pandemic levels in the next 12-36 months.

They plan to continue targeting the sub-$500 price point that was successful for them last year and believe the Woodridge model offers a premium but accessible option for consumers. The company has learned from the increased demand for products under $500 and plans to maintain stock levels to meet consumer needs. In Q1, the focus for inventory was on bringing in as much as possible ahead of anticipatory tariffs. The increase in inventory was also due to the Woodridge launch and continued load-in for the upcoming peak season. The goal is to maintain well-balanced inventory levels. Progress has been made in deleveraging in recent years, with a long-term goal of driving leverage to or below three turns. Free cash flow in 2025 is expected to be similar to 2024, with a focus on investing in working capital and debt paydown. Efforts to diversify sourcing outside of China, including pursuing a large manufacturing partner in Vietnam, are ongoing. The company is focusing on improving supply chain speed and mass production partnerships. They are balancing dynamic changes in the environment while making strategic decisions. Approximately 25% of production growth is in Vietnam, with plans to scale up. Revenue guidance may be impacted by shifts in the value chain and timing of revenue recognition due to tariffs. International revenue is down due to softness in MEATER sales. The company expects low-single-digit revenue growth, facing tough comparisons due to increased promotions in 2024 and one-time Woodridge load-ins. Retailers are adjusting direct import orders based on tariff timing and pricing dynamics. The company is facing uncertainties in revenue recognition due to the shifting timing of orders and tariff uncertainty. This may impact revenue pacing and recognition, leading to challenges in predicting quarterly results. Management acknowledges the difficulty in providing precision and certainty in such a fluid environment. Analysts appreciate the clarity provided. The earnings call concludes abruptly due to a disconnection. No questions were registered, and the call ends without further remarks. The transcript is a production of The Motley Fool, with a disclaimer about potential errors and inaccuracies. The Motley Fool has no position in the discussed stocks. 1. The CDC reports a record-breaking number of COVID-19 cases in the U.S., with over 100,000 new cases reported in a single day. Hospitalizations are also on the rise, putting strain on healthcare systems across the country.

2. President Biden signs a $1.2 trillion infrastructure bill into law, promising to create millions of jobs and improve the nation’s roads, bridges, and public transportation systems. The bill includes funding for clean energy projects and broadband expansion in rural areas.

3. Tesla announces plans to build a new Gigafactory in Texas, which will produce electric vehicles and batteries. The factory is expected to create thousands of jobs and boost the local economy.

4. The U.N. Climate Change Conference in Glasgow concludes with a new global agreement to limit greenhouse gas emissions and combat climate change. Countries pledge to take more ambitious action to reduce carbon emissions and transition to renewable energy sources.



Read more at Nasdaq: Traeger (COOK) Q4 2024 Earnings Call Transcript