Traeger, Inc. ((COOK)) has held its Q4 earnings call. Read on for the main highlights of the call.
Traeger, Inc. recently held its earnings call, presenting a mixed outlook for the company. While there was notable growth in the Grills and Consumables segments, and significant improvements in gross margins, challenges were evident in the Accessories segment and international sales. The sentiment expressed during the call was one of cautious optimism, acknowledging both the achievements and the hurdles that lie ahead.
Strong Fourth Quarter Performance
Traeger, Inc. reported a 3% revenue growth in the fourth quarter, with the Grills segment contributing significantly with a 30% increase, and the Consumables segment growing by 25%. This robust performance highlights the company’s strength in these core areas.
Gross Margin Improvement
The company achieved a gross margin improvement of 410 basis points in Q4 and 540 basis points for the fiscal year 2024. This was largely driven by supply chain efficiencies and reduced transportation costs, showcasing effective cost management strategies.
Grill Business Growth
The Grill business exceeded expectations with an 8% revenue increase for the year. This growth was fueled by strong consumer reception and successful promotional strategies, underscoring the brand’s appeal and market penetration.
Launch of Woodridge Series
The introduction of the Woodridge series of grills was a success, featuring significant technological innovations. The launch achieved over 1.2 billion social media impressions, indicating strong market interest and engagement.
Consumables Distribution Expansion
Traeger expanded its consumables distribution by entering a new partnership with Walmart for pellets and rubs. This strategic move opens up new market opportunities for the company’s consumables segment.
Challenges in Accessories Business
The Accessories segment faced challenges, with a 24% revenue decline in Q4. The underperformance was largely attributed to the Meater product line, which struggled with increased competition and reduced advertising effectiveness.
International Sales Decline
International sales saw a 39% decrease, primarily due to the performance of the Meater product. This decline highlights the need for strategic adjustments in the global market.
Tariff Concerns
Recently enacted tariffs pose potential risks to future profitability, with 50% of Traeger’s sales linked to goods imported from China. The company is closely monitoring these developments.
Net Loss in Q4
Traeger reported a net loss of $7 million for the fourth quarter, an improvement from the $24 million net loss in the same period the previous year. This reduction in losses indicates progress in financial management.
Forward-Looking Guidance
Looking ahead to fiscal year 2025, Traeger anticipates revenues between $595 million and $615 million, with adjusted EBITDA projected to range from $75 million to $85 million. The company expects low single-digit growth in the Grills and Consumables categories, but a decline in Accessories, particularly due to the Meater product line. Gross margin is expected to be between 42.2% and 42.8%. Traeger is also preparing for potential impacts from tariffs, given the significant portion of sales linked to Chinese imports.
In summary, Traeger, Inc.’s earnings call reflected a cautiously optimistic outlook. The company has demonstrated strength in key segments like Grills and Consumables, while also addressing challenges in Accessories and international sales. The forward-looking guidance suggests steady growth with an eye on potential tariff impacts, positioning Traeger for a balanced approach to future opportunities and risks.