Traeger at Canaccord Conference: Challenges and Strategic Moves

On Wednesday, 13 August 2025, Traeger Inc. (NYSE:COOK) presented at Canaccord Genuity’s 45th Annual Growth Conference. The company, represented by CFO Joey Hoard and Head of Investor Relations Nick Bachus, discussed their Q2 earnings, challenges from tariffs, and strategic initiatives for growth. While Traeger faces revenue declines and tariff impacts, they remain focused on profitability and supply chain diversification.

Key Takeaways

• Traeger forecasts a year-over-year revenue decline due to tariff-related pricing adjustments.
• Project Gravity aims to save $30 million annually, with $13 million expected in FY 2025.
• The company is reducing reliance on China by expanding partnerships in Vietnam.
• Traeger is prioritizing deleveraging and targeting a two to three-turn leverage profile.
• Increasing brand awareness, especially on the East Coast, is a key growth strategy.

Financial Results

• Q2 2024: Revenue pullback was due to timing shifts between Q2 and Q3. Sell-through performance met or exceeded expectations, with unit volume up year-over-year.
• Full Year 2024 Forecast: Revenue is expected to decline year-over-year, mainly driven by pricing shifts in response to tariffs.
• Tariffs: The blended tariff rate is in the low 30s percent, with pricing increases in the low double digits to offset the impact.

Operational Updates

• Tariff Mitigation: Traeger has implemented pricing increases and is optimizing supply chain efficiencies while focusing on cost management through Project Gravity.
• Supply Chain Diversification: Currently, 80% of grill production is in China. Traeger aims to reduce this reliance by expanding partnerships in Vietnam.
• Meter Integration: The Meter business is being centralized in Salt Lake City to leverage existing infrastructure and address increased competition.

Future Outlook

• Growth Strategy: Traeger focuses on education and awareness to drive household penetration, especially in regions like the East Coast where brand awareness is lower.
• Deleveraging: The company prioritizes profitability and free cash flow generation, targeting a two to three-turn leverage profile in the medium term.
• Consumer Trends: Traeger acknowledges consumer hesitation for purchases over $1,000 and expects normalization of big-ticket spending over time.

Q&A Highlights

• Tariffs: The company aims to offset about 80% of tariff exposure to drive profitability.
• Supply Chain: Diversification, with a focus on Vietnam, remains a priority.
• Consumer Behavior: Consumers are showing more interest in lower price points.
• Competition: Management believes smaller brands lack the discipline for long-term success.

For more details, please refer to the full transcript below.

Full transcript - Canaccord Genuity’s 45th Annual Growth Conference:

Brian MacMaher, Analyst, Canaccord: Nudi. I’m Brian MacMaher. For those of who don’t know me, one of Canaccord’s analysts in the consumer space. We are very excited to have to have Traeger here and to host CFO Joey Hoard and Nick Bachus who heads up investor relations. So thanks very much guys for joining us today.

Thanks Brian. So Joey perhaps you could start us off with a quick overview of the business and kind of key takeaways following your Q2 earnings last week.

Joey Hoard, CFO, Traeger: Yeah, sure. So we’re Salt Lake based company, Traeger pellet grills founded in 1986. We make the premium pellet grill and cooking platform as well as a flat rock or flat top griddle. We have made significant gains in market share and household penetration from call it the mid two thousands up through the pandemic. What else to add to this?

We are a, what we consider, even though we’re, you know, over three, almost three years old, we consider ourselves a young and ambitious company. We believe we have a great product, a great brand. We invest heavily behind our brand and in the product space. Obviously, we’ve had some challenges post pandemic. There was a certain two cohorts that were significant in terms of their purchases.

In 2020, 2021, there’s been a pullback in the category subsequent to that. We’ve been working through that, and at the same time, we are now experiencing what we consider some tariff challenges. We had an earnings release last week. As a new CFO I went through my first earnings release. Fun process which Nick helped me to prepare for.

Some of the highlights of the quarter. We had a pullback in revenues largely driven by a timing shift between q q two and q one and then q two and q three. At the same time, sell through is our lifeblood at retail and overall we are pleased with our sell through results. What we’re the underpinning of our sell through is largely driven by just investment to the brand, investment into some promotion. And overall, we’re pretty happy with how our peak season just finished.

On a full year basis, we are forecasting the business to be down year over year. That’s largely driven by a pricing shift that we’ve made subsequent to the tariff environment. At the same time, we believe that we’ve taken we’re prioritizing our balance sheet and financial health. And overall, that’s cascading into our P and L and our financials, but and we’re looking forward to the next few months. Do have anything to add to that?

Nick Bachus, Head of Investor Relations, Traeger: Yes. I think that we’ll talk about this with Brian, but the key takeaway from the 2Q was really our focus on profitability. The tariff environment certainly brings a significant challenge with respect to the P and L, but we’re talking about offsetting about 80% of our tariff exposure to drive profitability this year. We also talked about Project Gravity, which is a streamlining effort, a large scale project to drive efficiency in the business. We’ll talk more about that in a bit.

But our focus really is driving profitability to set up for growth in the future.

Brian MacMaher, Analyst, Canaccord: So a question we’re asking all of our companies at the conference is obviously tariffs, a key topic of discussion. Obviously, guys are no different here. We generally have not seen broad based price increases at the shelf level across the consumer segments. Overall, do you expect tariffs in the long term to be a net positive on your business or a net negative?

Joey Hoard, CFO, Traeger: Yes. There’s kind of two ways to answer that. First off, we have taken price. So we tariffs were announced post Liberation Day. They do impact us.

We have a blended tariff rate that settled around just in the low 30s percent that definitely has impacted our business. The management team got together the day after Liberation Day, and we decided to take control of our business and take swift action. And we’re really focused on tariff mitigation in terms of three key areas. One is pricing. We’ve taken pricing of low double digits, two is supply chain optimization, and three is cost management.

So Nick talked about Project Gravity, which is cost management. We’re going to deliver $30,000,000 of run rate savings on a full year basis, dollars 13,000,000 in FY 2025. Supply chain, we’re finding efficiencies within the supply chain, will yield long term results, diversification of our supply chain as well. And then as far as pricing goes in elasticity, the low double digits are at retail right now. The tariff environment really is impacting most like I would say, largely speaking, tariffs are impacting all products and grill brands the same.

We have, largely speaking, the same footprint. Tariffs, the way they’ve settled, the difference in tariff rate between a Vietnam and a China, even though it is we consider it material, it’s not so significant that one company has a significant advantage over another when you look at broad based competition. As far as long term, are tariffs good for the category? Tariffs are a tax. They’re an embedded tax that we’re now passing on to the consumer, not fully but partially.

But there is a scenario that is playing out that we’ve discussed which is the following. The category is noisy. There’s a lot of competition. There’s a lot of what we consider ankle biter brands. They operate at lower price point.

They a different way they distribute in the marketplace. We invest heavily behind a brand and our product and innovation, and so there is a scenario that plays out where the smaller brands that don’t have the operational discipline, they don’t have the financial discipline, they have not invested into the brand, operate at lower price points, they don’t have the ability with to negotiate supply chain and have supply chain scales of economy or economics of scale within the supply chain that the category becomes less noisy and less clustered or cluttered. The other thing I could say is this is forcing us, the tariff environment, to be very disciplined. And what that means, discipline on how we allocate cost, how we’re shifting to an ROI based mindset, how we invest behind the brand, who we’re investing with. And these are things that are important in the long term.

So high level, in the short term, I think tariffs are noisy, they’re volatile, they are impacting us. You can see that in our guidance. On the other hand, there is a scenario where there is a long term payoff here. Do have anything to add to that?

Nick Bachus, Head of Investor Relations, Traeger: I think that was great.

Brian MacMaher, Analyst, Canaccord: So 80% of your grills roughly are sourced from China and exposure, I think CEO, Jeremy Anders, last week said you want to see meaningfully lower next year. Where will this production move to just given the materiality of a shift from perhaps China to Vietnam?

Joey Hoard, CFO, Traeger: Yes. So right now, we’re 80% in China, 20% outside China on our grills production. We have great partners in Vietnam right now. They’re candidly looking for our business. This a shift that was in flight pre tariff environment.

This is accelerating it. So long term I would say the following. Diversification is very important to us in terms of supply chain. Derisks our operation. We are too reliant on China and we have been, but this is accelerating that and we also with the our plans long term, we have great partners right now in in Vietnam, and that’s that’s that’s our the priority of our focus.

But the other thing just to mention is the tariff environment is not settled. So man, every week there’s some new noise within the tariff space, so we just need to stay agile and nimble, and the high level message is we’re not making long term decisions based on short term news, a news cycle. Right? And we’re making long term strategic decisions that will benefit us down the road.

Brian MacMaher, Analyst, Canaccord: Why is it not so easy to quickly move supply chains? I think like a typical investor like just get out of China kind of thing. Why is that not so easy? What are the advantages China still represents in terms of craftsmanship, technical skill and cost advantages?

Joey Hoard, CFO, Traeger: So we have longstanding relationships with our partners in China and they’re something we’re actually very proud of. They’ve done a really nice job for us. We have a significant amount of innovation that we put into our grills. It’s not just bent steel. There’s technology innovation, etcetera, and you can see that reflected in our product, our product quality and obviously flows through the price point.

So it’s not just a lift shift place. There are CapEx investments. There’s technological capabilities that we have to help the factory stand up. So it’s not as easy as just up and move. And these things take time and these are long term investments.

We wanna make sure we’re making prudent long term investments, being very selective of our partners. And so because these things will yield through down the road.

Nick Bachus, Head of Investor Relations, Traeger: Yeah. Certainly investors that may cover kind of the apparel world or other soft goods, those areas are typically easier to shift production. Our production process has more complexity to it. And certainly focusing on quality and the quality of the product is a key pillar to our strategy.

Brian MacMaher, Analyst, Canaccord: So Q2 is obviously your most important quarter and the industry’s most important quarter for sell through. Why didn’t the consumer come out this year in your opinion?

Joey Hoard, CFO, Traeger: Yes. So I mentioned Q2 in my opening remarks. The consumer actually, we have a sell through versus sell in dynamic. As I mentioned, had Q2 was noisy in terms of two main drivers. One is the timing shift.

It was largely due to the we had an operational work through with our accounts in terms of direct import. So there was a shift from direct import to domestic fulfillment. So there was a timing shift on revenue. But as far as the sell through goes, as I mentioned earlier, the consumer actually performed according to our expectations or even better than our expectations. So what does that mean?

It means consumers walked into retail, purchased our grills. Our in Q2, our unit volume for sell through was actually up year over year. So there’s some key learnings off of this, which is the consumer issue is seeking value and lower price point. And then two, which we know we have to play out and that kind of feeds into a long term strategy conversation. But as far as the retail environment goes, it’s largely speaking outperformed.

Brian MacMaher, Analyst, Canaccord: So industry volumes are materially below 2019 levels. So you had the pandemic pull forward. We’ve gotten back to that and then some, right? This year, that number is a little bit lower, right, considering that what the market has done. Why has this downturn lasted so long do you think?

Joey Hoard, CFO, Traeger: Yes. I think it’s I think just the share there’s kind of the category was significantly impacted. We all lived through COVID, and we had shift in consumption behavior and just overall behavior, meaning we’re all locked up in our homes. There was a significant consumption around the home and the attached to the home. Home transactions were high during COVID as well, and that’s a leading indicator for us.

But as far as why has it lasted so long, there is a pull forward in demand. That’s number one. And so we’ve metabolized that. We feel we have a five year replacement cycle, which is typically around two years faster than our competition. And then the other thing to mention on is just the overall heavy durables.

This is a high ticket durable. It’s a considered purchase. And there is some what we call just noise around I mean, there’s housing transactions are at all time lows right now, and that’s something that we feel will continue. Interest rates and financing is obviously impacting us. And the price point we play at is, we have about two and a half times industry standard of our of our ASP.

And that is something that we’re, does impact us, probably more so than our competition. At the same time, one thing we’re very proud of is we’re holding market share. Household penetration for our brand is 3.5%. Our unneeded brand awareness in on the East Coast is very low, which ties into a long term conversation around our opportunity ahead of us is really around driving awareness, driving education. We have an education hurdle with our product.

But this all ties into a replacement cycle that we believe is coming. Five years is we’re starting to tiptoe into that replacement cycle and we believe it’s going to be a nice tailwind for us.

Nick Bachus, Head of Investor Relations, Traeger: Yes, we’re certainly watching obviously not only our industry but other big ticket categories, the furniture industry, home improvement largely remain sluggish. Things that are a bit high ticket kind of tied to the housing cycle generally have not seen that robust recovery post pandemic. And so we think the industry is it’s a stable industry over time. Americans love to grill. Americans love to cook outdoors.

That will continue. And so it’s really a question of timing of when the replacement cycle really starts kicking for our industry. And then just largely around housing rates, all that ties into the larger play around consumer discretionary spend.

Joey Hoard, CFO, Traeger: Yes. I’ll add one more thing to that. Largely speaking, the category is experiencing a price increase. Like I said, we’ve taken pricing of around low double digits. We did not take price consistently through our product line.

We have grills that were at $4.99 all the way up to close to $4,000 so we have a broad price range that we operate or we plan. And we believe that generally speaking, whether a grill is $500 or $550 will not affect consumer demand in the long term. In the short term, definitely that’s built into our guidance in terms of our revenue outlook. But like Nick said, Americans love to grill. It’s a grill enthusiast country and we believe that generally speaking, the category is going have a nice recovery.

Brian MacMaher, Analyst, Canaccord: So one consistent theme during kind of the grill industry’s recent struggles is kind of weakness in that 1,000 plus price point. Given Traeger’s a premium offering with ASPs, two or 3x the industry average, Talk about some of the success you’ve had with introducing product at more accessible price points and kind of how low can you go there while still maintaining your premium brand status?

Joey Hoard, CFO, Traeger: Yes. So the goal overall is to be premium in every price point and also accessible. So we definitely have played in a very premium space. If you get on our website, we have grills all the way up to $4,000. You’re talking about segments of the TAM that are fairly small at that point.

And then one of our key learnings over the last year and a half, definitely coming off of last year where we had very strong sell through at lower price points at retail in our peak season, is there’s a broad set of consumers around $500 or below and they wanna access our brand. And this is a key learning for us. So as we talk about are we innovate and then we innovate at higher price points and then we draft down into our product line at lower price points and make them accessible. It’s just a key learning that when we talk about long term product strategy, accessibility is definitely part of that conversation.

Brian MacMaher, Analyst, Canaccord: So Traeger historically has been a category disruptor, strong grower up until and kind of through the initial pandemic boom here. So like once we get past this tariff noise, the stuff that’s out of your control, how should investors think about growth for Traeger both in absolute terms and relative to the industry?

Joey Hoard, CFO, Traeger: Yes. I mean our opportunity is education and awareness. Household penetration in Utah, which is our backyard is around 16%. Nationally it’s 3.6% I believe is the latest number. If you go to the East Coast, our brand awareness, our unedited brand awareness is much lower than the West Coast where we’re actually an Oregon based, that’s where Traeger was founded.

So we have these pockets of much higher household penetration. If we interact with either a consumer or an investor or anyone that has a Traeger, it’s a completely different conversation than somebody that doesn’t, Right? And so I think the the opportunity for us is ongoing investment to education, understanding that our product is actually just a better solution. The ease of use and I have a I was I was at I I I’m a homeowner so I go into Home Depot often, probably way too much. And every time I’m in a Home Depot I go to the to the grill section and I try to I try to see if there’s a consumer looking at the competitor and I try to sell a grill to them.

And I was there this weekend and as I’m as I’m having conversation with this potential grill buyer, it just the the education hurdle was real for us. I I needed to tell them what the pellet what a pellet grill was. I needed to explain to them about the fuel types, the sourcing, the the the better the better output of food, the versatility. And I ended up selling a grill which was great. It took me twenty minutes, but that’s our opportunity as an education hurdle and overcoming that.

And so how do we do that? We need to focus on continuing to drive education through we have a we have a robust RSS program with Home Depot that we’re continuing to focus on scale. We have a great partnership with Home Depot and Ace to focus on education at retail. And these are these are big opportunities for us. The other thing we’re we’re very proud of is once you’re in a trigger or a pellet grill, usually stay, usually upgrade, and usually attach to it along that along that consumer journey.

A significant number of bags of pellets, accessories, consumables. And really, a consumer, once they’re in, they usually stay in. Yes. I think

Nick Bachus, Head of Investor Relations, Traeger: if you distill it down, we’ve got a significant opportunity in terms of market share and household penetration where Joey said very low household penetration at 3.6%, significant upside there. And then combine that with what should be industry tailwinds as industry recovers in the next few years and gets back to a normalized volume level. We think there’s a nice path for an acceleration in growth in the out years.

Brian MacMaher, Analyst, Canaccord: Tell us about Meter, which had been a really nice acquisition up until the last few quarters, which is where you’ve seen some material declines there. Kind of what’s happened there? And kind of how quickly do you think you can get that business back on track?

Joey Hoard, CFO, Traeger: I think Meter is sort of a we’re sort of a victim of our own success. We were the first connected meat probe that was launched pre acquisition, and then we acquired this business in 2021. It’s been a really nice acquisition for us in terms of there’s a lot of synergies between the products. It’s a connected device. It it synergistically works with our grill.

We feel there’s just a lot of opportunity to to tie these two together, even like the app and user experience around both. As far as meter and the challenges it’s faced, there’s just been a flood of, we call them ankle biter competitors into the space. Lower price point, they produce and they distribute on Amazon, discounted model. So we’re sort of we’re working through that. And then the shifts we’ve made, I I I believe that we’ve that we’ve talked about is the centralization of the meter the meter business in Salt Lake City.

Meter is a has been a standalone operation. It’s been a significant standalone operation just North Of London. They built an entire infrastructure to support that business. And earlier this year, the leadership team decided that there is there’s no reason why we need two capabilities in both places when there’s so much overlap of what they’re doing and what we’re doing. So we are centralizing that business in Salt Lake City.

It’s it’s a project that’s, you know, six months in the works. It’s gonna yield a lot of fruit. But the other thing I I believe it’s gonna do, it’s gonna allow us to tap into our fixed cost infrastructure regarding our sales fleet and sales force. And we believe retail and the retail landscape, physical retail is is the way that business is going to get back on track and capitalize on growth and the opportunity there. But Meter has actually been a really nice acquisition for us.

And even though it’s experienced some short term revenue challenges, there’s a long term opportunity

Brian MacMaher, Analyst, Canaccord: So a sticking point with investors has been leverage. So with the industry at or near, hopefully, a bottom here, how should investors think about deleveraging?

Joey Hoard, CFO, Traeger: I’ll take that one. Yes.

Nick Bachus, Head of Investor Relations, Traeger: Clearly, there’s leverage on the balance sheet. Deleveraging is a top priority for the management team. When you think about our key kind of strategies for this year, prioritization of profitability, Project Gravity, which is going to result in a reshaping the P and L and enhanced profitability over the next few years. All that’s going to drive the ability to deleverage. Deleverage will come from two sources.

The first is growth in EBITDA. So as we execute against our profitability strategies, drive the streamlining of the business, as we see top line recovery, Those top line the top line growth dollars are going to flow through to the bottom line. It’s going allow for deleverage via EBITDA growth. Secondarily is excess free cash flow. So the business has very strong free cash flow conversion.

It’s a fairly capital light business. And so excess free cash flow can be used to pay down debt in the next few years. And so those two drivers will allow us to delever. We target getting to kind of a two to three turn profile in the medium term.

Brian MacMaher, Analyst, Canaccord: So your CEO, Jeremy Andrews, a large shareholder, and he I admire him because he’s always buying stock in the open market. So for investors looking to get involved today, what do you believe the market under appreciates the Traeger brand and the stock?

Joey Hoard, CFO, Traeger: I think it’s some of the things I’ve already spoken about in terms of we are a category disruptor. If you understand the product and you understand the what we’re trying to if you understand the brand and the product and the experience around it, it just makes sense. Like I mentioned earlier, anyone we intersect with that has a trigger, it’s a completely different conversation and they understand the product, the replacement cycle, they understand that they’re in. I think Jeremy in terms of you said he buys stock and that’s because he sees the long term value in company. I personally, I’ve never sold a share as well.

So I have the same fundamental core belief in the future of this business. And I do think that the opportunities that I already spoke about are abundant.

Brian MacMaher, Analyst, Canaccord: So one final question that we’re asking all of our consumer companies at this conference that we like to do every year is, in your view, you guys were here at the conference last year, how healthy is the consumer today compared to a year ago? And how do you see consumer spending overall shaping up in the back half of this year and as we enter 2026?

Joey Hoard, CFO, Traeger: So I think the consumer is worried. And they’re worried about I’m currently trying to sell a house. It’s kind of the same conversation. It’s like, let’s wait, right? And so I think that is when you’re talking about a $1,000 plus you know, considered purchase, which is where where we largely play.

I think the consumer is a little bit hesitant to to to buy. At the same time, we have this backdrop of interest rates and we believe that could be a catalyst for for our brand or and the overarching category. At the same time, in terms of the consumer, as I said earlier, whether a product is 500 or $5.50, we do not believe that’s going to affect the long term outlook of the category. But in the short term, there’s obviously a little bit of volatility in which we’ve adjusted the guidance appropriately. Do you have anything to add to that?

Nick Bachus, Head of Investor Relations, Traeger: I think yes, I think that’s all right. I think the consumer has held in very well given all the headlines this year. Do think the trend of big ticket spend remains in kind of a more challenged position, where, to Joey’s point, the consumer is very, very choosy about where they’re spending their dollars. And so again, that will normalize over time. But I think that trend remains in place today.

Brian MacMaher, Analyst, Canaccord: Great. Well, it looks like we’re out of time. We’ll leave it there, guys. Thanks so much for joining us.

Nick Bachus, Head of Investor Relations, Traeger: Thanks, Bryce.

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