Traeger (COOK) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $168.5 million, down 1.8% year-over-year, with grill revenues up 2.0% and gross margin expanding by 600 basis points to 42.9%.

• Net loss narrowed to $2.6 million from $30.2 million, while Adjusted EBITDA rose 24.9% to $27 million year-over-year.

• The company raised full-year 2024 guidance for revenue, gross margin, and Adjusted EBITDA, citing operational improvements and robust consumer demand.

• General and administrative expenses fell 41.8% due to lower stock-based compensation, offset by higher legal costs.

• Paid $15 million in contingent consideration for Apption Labs acquisition in April 2024.

Financial highlights

• Q2 2024 gross profit was $72.3 million (up 14.2%), with gross margin at 42.9% (up from 36.9%); Adjusted EBITDA margin reached 15.9% (up from 12.5%).

• Adjusted net income was $7 million, or $0.06 per diluted share, versus an adjusted net loss of $4 million last year.

• Grill volumes increased high double digits, offset by a mid-double digit decline in ASP due to promotions and mix shift.

• North America revenues declined 4.6–5%, while Rest of World/international revenues grew 31.9–32%.

• Inventory decreased to $91 million, a 40% reduction since Q2 2022.

Outlook and guidance

• FY 2024 revenue guidance raised to $590–$605 million; gross margin guidance increased to 40.5–41.5%; Adjusted EBITDA guidance raised to $74–$79 million.

• Grill revenues now expected to be flat year-over-year, improved from prior guidance of a high single- to low double-digit decline.

• Accessories revenue outlook reduced due to MEATER, with negative growth expected in the second half.

• Management expects continued macroeconomic headwinds and a shift in consumer demand away from big-ticket home products to persist through 2024.

• Existing liquidity and credit facilities are expected to be sufficient for at least the next twelve months.