Traeger released Q2 earnings yesterday and the big story out of it was they are expanding distribution to Lowe’s. I wrote a whole article on that, so this will be about all the other takeaways from their earnings call.

They lowered their revenue guidance, and a big part of that is sales continue to slump at their wireless temperature probe brand MEATER. What was once a bright spot in the business has turned.

As we enter 2026, we expect it to navigate several revenue headwinds, including MEATER softness, price elasticity, channel inventory normalization and deliberate revenue trade-offs associated with Project Gravity. Those dynamics were contemplated in our original outlook. Relative to those assumptions, the primary changes we’ve seen are greater softness in the MEATER business and increased near-term channel dynamics associated with our distribution expansion strategy, both of which are reflected in our updated revenue outlook.

Jeremy Andrus, CEO of Traeger

Traeger acquired MEATER in 2021 and had first mover advantage in the wireless probe space. At this point, I don’t know that there is much brand value in the MEATER name with how saturated wireless probes are.

I feel like they need to go one of two ways with the brand. Either re-focus on innovation to elevate the brand again, or scrap the brand entirely and just use the Traeger brand.

They aren’t sitting by though, they’re actively trying to fix MEATER. As part of their Project Gravity cost reduction initiatives, they consolidate MEATER into their headquarters in Utah. They also have focus on selling MEATER at Ace as they have moved it from a DTC play.

At Ace Hardware, we launched an exclusive [ MEATER ] collaboration and we’ll continue to invest across the marketplace to fuel premium retail experiences for our consumers wherever they purchase.

Jeremy Andrus, CEO of Traeger

Volume and ASP

Unit volumes for Traeger have been resilient, but their ASP continues to decline. They are seeing softness amongst grills price over $1,000, which is why they released the Westwood at a lower entry point into connected grilling.

There’s also a sort of a business and a product line architecture piece that certainly influences that. We’ve been working really to drive innovation at higher price points and cascade that innovation downstream. And there are some key gaps that we are filling that we think will help stabilize and reverse this trend. I think this year, the most prominent example is the Westwood product that we’ve launched. We’ve seen very, very nice volumes in our opening price point, which is the Pro Gen 1, as we call it, Pro 22 and Pro 34.

We launched the Westwood into market this year. And frankly, it’s really only starting to hit our retailers, that hits a $699 to $799 price point. But I think importantly, it brings some of the elements of innovation around the connected cooking experience and other elements of innovation that we launched at higher price points into lower price points. I think what that will do is create an opportunity for those who have been buying into opening price points, potentially seeing a gap between the opening price points and the mid-price points to find something in between that has innovation.

So to the extent that there are things that we’re doing from a product line architecture standpoint to really not just drive ASP, but really to meet the consumer where they are in terms of creating the right product for the right consumer in the right moment, and also creating very obvious step-up story. Some of these things will naturally happen with product launches. Others will be a function of the macro. But I think we’ll see over the next 12 months that Westwood will do a nice job of creating a higher price point, but still a highly accessible price point below $1,000 with innovation.

Jeremy Andrus, CEO of Traeger

What Jeremy Andrus is referencing with innovation trickling down is innovation consistently has sold in this environment. For Traeger, their strategy has been to release their most innovative grill, then in subsequent years bring versions of that tech to cheaper price points.

Outside of the bad economy, they’re still selling that trickle-down innovation at lower price point grills, so those are also the grills they’re selling. Once they refresh the Timberline, it will give them an opportunity to reset their ASP a bit.

It is notable though that Traeger originally focused on leading on ASP, and to navigate this market they’ve gotten away from that. It’s a bit dangerous because they are banking on it not hurting their brand image they did a great job building, and that they’ll have the stickiness to sell consumables and accessories.

Increased Pellet Production

One interesting takeaway from the call is that Traeger is going to increase pellet production to fuel pellet sales at Lowe’s. That’s the opposite of the direction they’ve been headed.

They had focused on reducing production because of house brand pellets at a large retailer had lowered their pellet sales. It’s also in addition to the obvious struggles in the grill category overall.

We’re investing in mills for increased pellet capacity. This is going to unlock a significant amount of investment capacity to reinvest back into our business just to drive that virtuous cycle in the flywheel. There’s a couple of other areas we’ll invest into human capital in the field, some employees here at headquarters to really unlock the potential.

There is a CapEx investment in the fixtures and also that the mills and to create that pellet capacity. So there could be a cash impact, which we’ve modeled out, but it’s highly accretive and with a high ROI attached.

Joey Hord, CFO of Traeger

Revenue Down, EBITDA Stable

The headline from Traeger’s earnings on the financial side was that they were lowering revenue guidance but keeping their EBITDA guidance. They are yielding dividends from Project Gravity, which is the main factor they attributed to the more efficient business model.

Adjusted EBITDA increased to $17 million in the second quarter from $14 million in the prior year period despite lower revenue, reflecting the benefit of Project Gravity actions, disciplined expense management and continued focus on profitability. 

Joey Hord, CFO of Traeger

If I’m and analyst or an investor, I’d want a little bit more explanation of those numbers. The tariffs make EBITDA a bit of a bouncing ball because of when they started to work through inventory after tariffs, took pricing, and took refunds. It muddies the comp quite a bit.

So we do have increased just input costs regarding transportation costs, input increase costs, which we’ve spoken about in the last call, those are reflected in our outlook. Our margin rate overall is being impacted this quarter and over the next 2 quarters by the IEEPA tariff refund. We’ve collected now $16 million in cash. We booked $12 million in change in Q1, $1.5 million in Q2, and we’re planning on $2 million in the second half, which really is around $16 million full year. So that is impacting our overall margin rate.

Joey Hord, CFO of Traeger