Traeger reported Q1 2026 earnings today and noted some positive indicators in what’s a little bit of a muddy quarter. If you think back to this time last year, we were entering all of the tariff changes. Retailers were buying ahead of the tariffs, so the comps are a little deceiving.

Traeger also made some major changes to their business. They stopped selling DTC and exited Costco Roadshows. Those changes lower their revenue this year.

One data point that Traeger is anchoring to is their sell-through trends. They say that those are up to their guidance and in an adjusted YoY perspective.

The signal we’re watching most closely as we head into peak season is sell-through. We view sell-through as the clearest measure of underlying consumer demand, and we believe healthy sell-through supports a healthy marketplace for both Traeger and our strategic retail partners. Year-to-date, early season demand is encouraging. Sell-through is tracking slightly above our expectations and excluding strategic channel divestments from our DTC and Costco roadshow businesses is slightly up year-over-year. While we’re always careful about drawing conclusions from short periods, at this point, we have not seen indications thus far for a broad-based slowdown tied to the macro environment.

Jeremy Andrus, CEO of Traeger

They also closely track their social media engagement. That was called out as another indicator of their the demand for their products.

 Even in a cautious spending environment, Traeger brand engagement remains strong, and it continues to be a leading indicator of potential demand. In Q1, social engagement was up over 30% year-over-year with 65% of our organic impressions coming from nonfollowers. That matters because expanding household penetration remains one of our largest long-term opportunities and reaching new consumers is the first step to earning their purchase.

Jeremy Andrus, CEO of Traeger

While Traeger exited their Costco Roadshow relationship, they are seeing benefits from their retail sales specialists through selling efforts at Home Depot.

At the Home Depot, our success with this key strategic partner has been amplified by our retail sales specialist program, a dedicated field team that trains store associates and facilitates in-store product demonstrations featuring food cooked on a Traeger. We believe the ability for consumers to see the product in action and taste the flavor is a meaningful driver of conversion. We know this model has worked for us. Last year, stores supported by our retail sales specialists converted at meaningfully higher rates than those without. We’re expanding that playbook this year, targeting at least 7,500 cooking events in Q2, which is almost twice the number we did in the same quarter of 2024 as we support both Westwood and Irontop through peak season.

Jeremy Andrus, CEO of Traeger

Traeger released two new products recently that they’ll be counting on for the summer selling season. They launched the Irontop griddle and the Westwood pellet grill, both products at a lower selling point than Traeger previously played in.

Tariff Refunds

An interesting development in the quarter is that Traeger took an EBITDA benefit from estimated tariff refunds. They haven’t seen any cash from the refunds, so they have it sitting on their balance sheet as a receivable.

 In Q1, we recognized a $12.4 million benefit to gross profit and adjusted EBITDA, a $3.2 million reduction in inventory carrying cost and recorded a $15.6 million receivable, all related to the refund of duties paid under IEEPA.

Joey Hord, CFO of Traeger

They were asked multiple questions about this accounting treatment. It ultimately doesn’t mean much operationally, but it’s notable because not all companies are treating the refunds this way yet.

There could be some risk with taking it because of how frequently tariffs have changed over the past year. If the refund doesn’t come as planned, they’ve have to reverse the receivable and take a hit to EBITDA

Overall, we have just around $15.5 million of total IEEPA tariff refund that we feel we’re due. We’ve taken the $12.4 million in Q1, which is reflected. The way that we account for this going forward is as we sell in inventory that has been impacted by tariffs, we’ll continuously book that in the P&L. So we do feel there’s going to be around $1.5 million this fiscal year. So our total FY ’26 expected impact is just off of $14 million.

Joey Hord, CFO of Traeger

They weren’t overly specific on the determination to book what they did in Q1, or exactly when the cash will follow. Reading into their response, I would guess it was through consultation with their outside accounting firm.

So overall, we have the ability to book this in Q1. We were given that leeway. So we, broadly speaking, took it to the P&L. We do have some additional potential on the balance sheet right now in terms of total refund. As far as when we expect the cash, we do expect it to be paid within 60 to 90 days, but this is widely thought through in terms of other CFOs I’ve spoken to. With that said, I do think at the same time, we need to be prudent in our plan this year. Overall, I do believe that our AR balance right now is appropriately reflecting our refund.

Joey Hord, CFO of Traeger

Traeger was also pressure tested by the analysts on the call about the amount of tariff they are taking, and if any of that will be due to their retail partners.

Look, I mean it’s — the reality is that where we do a meaningful direct import business, we, of course, built wholesale pricing with a tariff payment in mind paid by the importer, which is our partner. And that, of course, is a larger number than the figures that Joey is sharing. Of course, we felt some volume reduction due to elasticity with the higher prices and certainly felt some margin. And so sharing of that — of those tariff refunds is a conversation that we’ll have with our direct import partners, and we’ll see where that goes.

Jeremy Andrus, CEO of Traeger

China Diversification

Part of Traeger’s response to the high IEEPA tariffs from China was a plan to move production away from the country. In light of the changes in the tariff environment, they are slowing those efforts down for economic reasons.

As far as our diversification efforts, when tariffs were announced, the overall tariff rate coming out of China was much higher than other countries of origin. So we spoke about materially diversifying out of China by the end of FY ’26, and we were underway. Subsequently, tariff rates have obviously shifted materially. Our overall tariff rate has come down. And now we see parity between our countries of origin. So what that’s allowed us to do is be long-term thoughtful and strategic in our diversification strategy. To be clear, our goal is to continue to diversify outside of China. With that said, we’re being more long term and strategic about it.

Joey Hord, CFO of Traeger