The Home Depot and Middleby both reported their earnings this week, which gave us an update on market conditions both from the retailers’ perspective and from the manufacturers’.
The Home Depot
The biggest takeaway from Home Depot when it comes to grill sales is that they’re seeing more price sensitivity. It’s something they started seeing in Q3, that they noted has gotten worse in Q4.
Previously, they noted that it was especially present in traditional grills that had been around for a long time. With Traeger pushing their price point higher with recent releases like the Ironwood pellet grill and the Flatrock flat top grill, we’ll see if higher priced grills with more technology remain resilient.
…But the price sensitivity is – while it’s abit broader in Q4 than we saw in Q3, it’s still primarily those larger single ticket, more discretionary items that we’ve referenced before, appliances, grills, patio…
Ted Decker, CEO of The Home Depot
Middleby
Middleby gave their first look at a new Kamado Joe product during their earnings call. Called the Konnected Joe, it’s a kamado style charcoal grill that works like their gravity series products. It includes an auto-ignition system and phone connectivity.
Beyond the new product to be released soon, they talked about the continued trend of retailer destocking. This is something we heard during Q3 from multiple grill companies. It’s when the retailer lowers their inventory, without replacing it, resulting in lower sales at the manufacturer.
The decline for ’23 is being drivenlargely from the impact of retail destocking of grills, along with generally challengingconditions around the residential housing market.
Bryan Mittelman, CFO of Middleby
Middleby sees destocking being most severe in Q1 of 2023, and then lessening in Q2. They expect the second half of the year to be much better than the first half, even predicting market share gains.
…we can’t say precisely, where inventory in the channel is going to be at thatpoint, but I think we feel like we’re in a much better situation going into the back half ofthe year and perhaps could see growth because inventory levels are reset and we do feel like there is some momentum in the platform.
Tim FitzGerald, CEO of Middleby