Traeger, Inc. Q1 FY2025 earnings call

• Tariffs Mitigation: The team is working on strategies like supply chain cost savings, sourcing diversification, strategic pricing increases, and cost reduction. - Grill Business: Solid growth in Grills sales (+13% vs prior year), healthy sell-through into Q2, retail conversion aided by boots-on-the-ground initiatives like retail sales specialist program and Costco roadshows. - Innovation: Launch of Woodridge wood pellet grill with strong consumer reception, and introduction of Flatrock 2 Zone griddle. - MEATER: Continues to face pressure from slowing Smart Thermometer category and competition, with strategy changes in place. - Withdrawal of Guidance: Withdrew prior financial guidance and temporarily suspended forward guidance for fiscal 2025 due to uncertainty in macroeconomic and trade policy.

Grills: Sales were up 13% versus prior year, with revenues of $87 million. Consumables: Revenues were $30 million, down 6% versus the first quarter of 2024. Accessories: Revenues decreased 27% to $26 million due to continued declines in the MEATER, offset by growth in Traeger branded accessories. Geographically, North American revenues were up 6%, while Rest of World revenues were down 47% due to MEATER.

• Withdrew prior financial guidance that did not include tariff impact. - Temporarily suspends forward guidance for fiscal 2025 due to lack of visibility into macroeconomic, consumer, and trade policy environments. - Expect greater visibility into consumer demand as peak season at retail unfolds over the next few months.

• Tariffs Impact: Significant exposure to tariffs on grills and accessories, with grills from China facing a 45% tariff. - Uncertain Macroeconomic Environment: Declining consumer sentiment and rapidly evolving trade policy create uncertainty. - Consumer Sentiment: Near historic lows, making accurate forecasting of consumer demand challenging.

Q: Provide color around strategic price increases across product portfolio and new product price points.

A: Jeremy Andrus stated pricing was sophisticated, not an even increase, based on elasticity analysis; product strategy focuses on innovation regardless of environment.

Q: Talk about MEATER segment and capital allocation.

A: Dominic Blosil mentioned focusing on short-term pain, shifting mix to wholesale channels, unlocking efficiency, and balancing short-term with long-term value for MEATER.

Q: Sensed shift in retailer willingness to take on inventory?

A: Jeremy Andrus said no significant reluctance, but shift from direct import to domestic fulfillment due to tariffs.

Q: How long inventory on hand can fulfill demand?

A: Dominic Blosil said inventory on hand provides short-term relief, inventory position is healthy, and they're adjusting POs based on demand signals.

Q: Tariffs on China and Vietnam grills?

A: Jeremy Andrus explained China grills face 45% tariff (20% IEEPA + 25% Section 232), Vietnam grills face 25% Section 232 tariff.

Q: Walmart pellet rollout and grill trends?

A: Jeremy Andrus said Walmart rollout is meeting expectations, grill trends are solid but hard to unpack if due to demand or pull forward.

Q: COGS exposure to tariffs and grill SKUs production?

A: Dominic Blosil said product cost is majority of COGS; not all grill SKUs are produced in both China and Vietnam, with highest-volume SKUs having redundant sourcing outside China.