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Traeger Inc (NYSE:COOK) presented its first quarter 2025 results on May 1, revealing mixed performance with strong grill sales counterbalanced by weakness in its accessories segment. The outdoor cooking company has withdrawn its financial guidance for fiscal 2025 amid tariff concerns and economic uncertainty.
Introduction & Market Context
Traeger reported total revenue of $143 million for the first quarter, representing a slight decline of 1.1% compared to the same period last year. The company’s stock, which has faced significant pressure in recent months, traded at $1.48 in the aftermarket session following the presentation.
"We experienced 13% growth in our grills business due to increased consumer demand and the launch of the Woodridge series," said CEO Jeremy Andrus in his commentary. "However, we faced challenges with accessories revenues, particularly with MEATER, and are taking strategic actions to stabilize MEATER’s sales and profitability."
The company is navigating a complex macroeconomic environment, with particular focus on mitigating the impact of tariffs on its supply chain and financial performance.
Quarterly Performance Highlights
Traeger’s Q1 2025 performance showed divergent trends across its product categories. While grill sales demonstrated robust growth, the company’s accessories segment experienced a significant decline.
As shown in the following financial overview:
The revenue mix for the quarter consisted of grills accounting for 60.5% of total revenue, consumables for 21.1%, and accessories for 18.4%. This represents a shift toward greater reliance on grill sales compared to previous quarters.
Breaking down the revenue results by segment reveals the extent of this divergence:
Grills revenue reached $87 million, a 12.8% increase from $77 million in Q1 2024, demonstrating strong consumer demand for Traeger’s core products. Consumables revenue declined 6.1% to $30 million, while accessories revenue saw the steepest drop of 26.6% to $26 million, primarily due to challenges with the MEATER product line.
Detailed Financial Analysis
Despite the revenue challenges, Traeger maintained relatively stable profitability metrics and showed improvement in its balance sheet position.
The company’s profitability results for the quarter are illustrated below:
Gross profit totaled $59 million with a gross margin of 41.5%, compared to $63 million and 43.2% in Q1 2024. Adjusted EBITDA reached $23 million with a margin of 15.7%, slightly down from $24 million and 16.8% in the prior-year period. However, adjusted net income improved to $7 million from $5 million in Q1 2024.
Traeger has made significant progress in strengthening its balance sheet, as demonstrated by the following metrics:
Quarter-end liquidity improved to $168 million from $153 million in Q1 2024, while net debt decreased slightly to $416 million from $421 million. Most notably, the company’s leverage ratio has steadily improved from 13.9x in Q1 2023 to 4.8x in Q1 2025, reflecting enhanced financial stability despite market challenges.
Strategic Initiatives
Traeger outlined several strategic initiatives aimed at driving growth and addressing current challenges. These initiatives are organized around four key growth pillars:
The company has accelerated brand awareness efforts, resulting in a significant increase in PR coverage (up over 300% year-over-year) and a 50%+ increase in Costco (NASDAQ:COST) Roadshows. Product innovation remains a focus, with the successful launch of the Woodridge Series and the announcement of the Flatrock 2 Zone griddle.
To drive recurring revenues, Traeger introduced Oak & Whiskey Blend pellets, re-introduced Whiskey Dust Rub, and revamped its rubs line in retail. Global expansion efforts included a successful Woodridge launch in Canada and MEATER distribution at Curries in the UK.
In response to tariff challenges, Traeger has implemented a comprehensive mitigation strategy:
The company is pursuing supply chain adjustments, including cost negotiations, implementing First Sale processes, and diversifying production outside of China, with an expected reduction in Chinese production by 2026. Cost management initiatives include reducing non-essential expenditures, cutting travel and entertainment expenses, and implementing a material reduction in hiring.
Forward-Looking Statements
Due to the uncertain macroeconomic environment and tariff situation, Traeger has withdrawn its financial guidance for fiscal 2025. This represents a shift from the previous quarter when the company had provided specific guidance ranges.
"We are taking decisive actions to mitigate the incremental costs of tariffs to protect Adjusted EBITDA and promote balance sheet health," said CEO Andrus. "We will provide updates to our outlook as it becomes clearer."
The company’s cautious approach contrasts with its previous quarter’s outlook, when it had projected revenue of $595-$615 million and adjusted EBITDA of $75-$85 million for fiscal 2025. The withdrawal of guidance suggests increased uncertainty about the impact of tariffs and other external factors on Traeger’s business.
Despite these challenges, Traeger maintains its focus on its mission "To Create a More Flavorful World" and continues to invest in product innovation and brand building while implementing cost control measures to navigate the current environment.
Full presentation:
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