Traeger Q4 Earnings Call Highlights

Key Points

• Traeger beat fiscal 2025 guidance with revenue of $560 million and delivered adjusted EBITDA of $70 million, but Q4 revenue fell 14% to $145 million (grills and accessories down, consumables up 16%), producing a GAAP net loss of $17 million while adjusted EBITDA rose to $19 million.
• Project Gravity is driving margin and cost improvements—Traeger realized $20 million of savings in FY25 and now targets $64–$70 million of total run-rate value, expecting roughly $50 million of adjusted EBITDA benefit in 2026—while guiding FY26 revenue of $465–$485 million and adjusted EBITDA of $50–$60 million as channel exits and SKU rationalization intentionally lower near-term sales.
• Management highlighted strong brand engagement (315,000 connected cooks, up 11% YoY) and plans to expand household penetration with two sub‑$1,000 product launches in 2026, targeting growth at lower price points without sacrificing performance.

Traeger NYSE: COOK reported fourth-quarter and full-year fiscal 2025 results that management said reflected “strong execution” amid tariff-driven disruption, shifting consumer demand, and continued pressure in its MEATER accessories business. For the year, the company posted revenue above the high end of its guidance at $560 million and delivered adjusted EBITDA of $70 million, which management said landed in the upper half of its target range.

Chief Executive Officer Jeremy Andrus said the company “navigated tariffs,” took actions to protect profitability, and made decisions intended to simplify the business and strengthen its foundation for the long term. Chief Financial Officer Joey Hord emphasized three key financial themes for 2025: managing tariff exposure through pricing and supply chain actions, resilience in consumables such as pellets, and progress on the company’s multi-year cost and operating model initiative, Project Gravity.

Fourth-quarter performance: consumables up, grills and accessories down

In the fourth quarter, Traeger generated revenue of $145 million, down 14% year-over-year. Hord said the company exceeded the top end of its revenue guidance for the quarter and delivered adjusted EBITDA in the upper half of its full-year range, despite elasticity following tariff-related price actions and pressure at MEATER.

• Grills revenue: $61 million, down 22% year-over-year. Management attributed the decline primarily to elasticity, an unfavorable mix shift, and a difficult comparison tied to Woodridge load-in activity ahead of launch in the prior-year quarter.
• Consumables revenue: $36 million, up 16% year-over-year, driven by higher unit volumes in wood pellets and food consumables.
• Accessories revenue: $49 million, down 18% year-over-year, pressured by negative sales growth at MEATER.

Fourth-quarter gross margin was 37.4%, down 350 basis points from the prior year. Excluding $3 million of Project Gravity-related costs, adjusted gross margin was 39.5%, down 130 basis points, with tariff-related costs cited as the primary driver, partially offset by lower promotional activity and supply chain efficiencies.

Sales and marketing expense fell to $23 million from $34 million a year earlier, which Hord attributed to reduced MEATER investment and Project Gravity savings. General and administrative expense declined to $22 million from $27 million, primarily due to lower stock-based compensation and lower professional fees and employee-related costs connected to Project Gravity.

Traeger posted a net loss of $17 million, or $0.13 per diluted share, compared with a net loss of $7 million, or $0.05 per diluted share, in the year-ago quarter. On an adjusted basis, net income was $2 million, or $0.01 per diluted share, unchanged from the prior-year period. Adjusted EBITDA increased 6% year-over-year to $19 million.

Brand engagement and product strategy

Andrus said the Traeger brand “remains as strong as ever,” pointing to community engagement as a demand indicator. On Thanksgiving, Traeger recorded 315,000 connected cooks, up 11% year-over-year, which management said signaled engagement across its installed base.

In 2025, management said Traeger held market share across outdoor grilling, including fuels, in what it described as a sluggish category environment. Andrus also highlighted traction at price points below $1,000, saying the company saw demand without sacrificing brand or performance. He cited the Woodridge platform as an example of balancing performance and value through features such as the EZ-Clean Grease & Ash Keg, increased cooking space, and the FreeFlow Firepot.

Looking to 2026, Andrus said Traeger plans to launch two additional products at “more accessible price points,” describing household penetration expansion as a large long-term opportunity. In response to an analyst question, he noted that product development cycles for a “highly engineered product” can span 30 to 36 months, limiting the extent to which near-term macro conditions can reshape long-term product strategy. He also said the company’s two spring launches are expected in the second quarter and will be sub-$1,000 platforms, which he characterized as appropriate for current consumer conditions.

Project Gravity: channel exits, cost savings, and portfolio simplification

Management framed Project Gravity as a multi-year effort to simplify operations, sharpen strategic focus, and improve profitability durability. Andrus said Phase 1 centered on organizational efficiency and cost actions, including integrating MEATER into Traeger’s Salt Lake City infrastructure. Phase 2, he said, is more strategic and includes channel optimization actions such as exiting the Costco Roadshow, winding down direct-to-consumer commerce, and transitioning to a distributor model in Europe.

Andrus said previously announced Phase 1 and Phase 2 actions are expected to deliver approximately $58 million of run-rate savings, with benefits beginning in 2025 and continuing into 2026. He also announced additional opportunities within Phase 2 tied to SKU rationalization and pricing, which the company expects to add $6 million to $12 million of incremental run-rate value, largely realized in 2027 and 2028. In total, Traeger now expects Project Gravity to deliver $64 million to $70 million of value across both phases.

Hord said Traeger delivered $20 million of cost savings from Project Gravity in fiscal 2025, exceeding the company’s original expectation of $13 million. For 2026, he said Project Gravity is expected to deliver approximately $50 million of adjusted EBITDA benefit, reflecting roughly $30 million of incremental benefit on top of the savings realized in 2025.

Balance sheet, cash flow, and inventory

Traeger ended fiscal 2025 with $20 million in cash and cash equivalents, up from $15 million at the end of 2024. The company reported $403 million of short- and long-term debt, resulting in net debt of $384 million, which Hord said declined by $10 million year-over-year.

Cash flow from operations was $16 million in the fourth quarter, driven by working capital management and Project Gravity savings. Traeger ended the quarter with $162 million of liquidity. Inventory at quarter-end was $99 million, down from $107 million a year earlier and down from $115 million at the end of the third quarter. Hord noted that MEATER inventory remains elevated and is expected to be worked through in 2026, while Traeger said it was “pleased” with its Traeger-branded inventory positioning.

2026 outlook: lower revenue, focus on profitability and inventory normalization

For fiscal 2026, Traeger guided to revenue of $465 million to $485 million and adjusted EBITDA of $50 million to $60 million. Management described 2026 as a “foundational” or “transition” year characterized by deliberate channel changes, inventory normalization, and the annualization of tariff-related elasticity. Andrus said revenue will be reduced by Project Gravity channel actions, including the Costco Roadshow exit and the wind-down of direct-to-consumer commerce, while accessories will face pressure due to the MEATER reset.

Hord said roughly $70 million of the year-over-year revenue decline implied by 2026 guidance reflects the combined impact of Project Gravity actions and annualized tariff-related pricing elasticity, with “just over half” attributed to Project Gravity actions net of recapture. In the Q&A, management also pointed to additional revenue headwinds from ongoing MEATER pressure and “marketplace health initiatives,” including rightsizing elevated inventory in a “distinct pocket” at a specific retailer.

On margins, Traeger guided to gross margin of 38% to 39%, which management said implies a year-over-year change of down 120 basis points to down 20 basis points versus fiscal 2025. Hord attributed the margin outlook to full-year tariff pressure and “promo-funded deleverage,” partially offset by Project Gravity benefits.

The company also provided first-quarter guidance, citing timing shifts with new product load-ins expected in the second quarter rather than the first. For the first quarter of 2026, Traeger guided to revenue of $92 million to $97 million and adjusted EBITDA of $3 million to $7 million. Hord said the company’s guidance is based on the tariff framework in effect through mid-February and does not incorporate recently announced changes, noting any incremental benefit could flow through gross margin, dealer margin support, or consumer pricing actions.

Despite the expected decline in adjusted EBITDA, Hord said Traeger expects “strong free cash flow generation,” and the company currently expects free cash flow of at least $30 million in fiscal 2026, driven primarily by inventory reductions and working capital management. Management said the expected cash generation would support continued net debt reduction and that the company expects to remain comfortably below covenant leverage levels throughout the year.

About Traeger NYSE: COOK

Traeger, trading on the NYSE under the ticker COOK, is a designer, manufacturer and marketer of wood pellet grills and outdoor cooking appliances. The company's core product lineup features a range of hardwood-pellet grills that combine wood-fired flavor with digital temperature control. Beyond grills, Traeger offers a suite of accessories—such as grill covers, smoking woods, meat probes and recipe rubs—as well as outdoor kitchen solutions designed to serve both consumer and light-commercial segments.

Founded in 1985 by Joe Traeger, the brand pioneered the wood-pellet grilling category.

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