On May 8, 2024, Traeger Inc (COOK, Financial), a leading innovator in the wood pellet grill industry, disclosed its financial outcomes for the first quarter ended March 31, 2024, through its 8-K filing. The company reported a decrease in total revenue by 5.4% to $144.9 million, slightly above the higher end of its guidance but below the analyst expectations of $143.91 million. The net loss stood at $4.7 million, translating to $0.04 per share, contrasting sharply with the estimated earnings per share of $0.03.
Company Overview
Traeger Inc designs, sources, and sells innovative wood pellet fueled barbeque grills. Besides grills, the company offers a variety of related consumables and accessories, including wood pellets, rubs, spices, and smart thermometers. Traeger's primary market is North America, which significantly contributes to its revenue, although it also operates globally.
Financial Performance Insights
The reported quarter saw a mixed financial performance with significant improvements in gross margin, which increased to 43.2% from 36.2% in the prior year, attributed to better freight and logistics management and favorable foreign exchange rates. Adjusted EBITDA rose by 11.2% to $24.4 million, reflecting operational efficiencies.
However, the revenue dip was primarily due to a 14.4% decrease in grill sales, driven by lower average selling prices and reduced unit volumes, indicating softened consumer demand for grills. Conversely, consumables and accessories segments experienced growth, each by 7.4%, helped by higher unit sales of food consumables and MEATER smart thermometers.
Balance Sheet and Cash Flow
The balance sheet of Traeger Inc showed cash and cash equivalents of $23.6 million, a decrease from $29.9 million at the end of December 2023. Inventory levels slightly rose to $99.9 million from $96.2 million over the same period. The company used $12.6 million in operating activities, mainly due to the net loss and changes in working capital.
Management Commentary
"In the first quarter, we executed on our plan and delivered revenue and Adjusted EBITDA results at the high-end of our guidance range," stated Jeremy Andrus, CEO of Traeger. He also noted the ongoing challenges in consumer demand but expressed confidence in the company's strategic initiatives and long-term growth prospects.
Outlook and Forward Guidance
Traeger reiterated its full-year 2024 guidance, expecting total revenue to be between $580 million and $605 million and forecasting a gross margin between 39% and 40%. The adjusted EBITDA is anticipated to be between $62 million and $71 million. This outlook reflects the company's strategy to navigate through the current demand fluctuations in the grill market and its focus on margin enhancement initiatives.
Conclusion
While Traeger Inc faced a challenging quarter with a revenue shortfall and net loss, its improved gross margin and adjusted EBITDA performance highlight underlying operational strengths. The company remains optimistic about its strategic directions and the ability to achieve long-term growth despite the current market adversities.
For detailed financial figures and future updates, investors and stakeholders are encouraged to refer to the full earnings report and supplementary materials available on the company's investor relations website.
Explore the complete 8-K earnings release (here) from Traeger Inc for further details.
