After announcing cost cutting measures previously, Traeger released earnings for the quarter ended June 2022. While results were lower than they previously forecast, the markets were satisfied with their recovery plan as Traeger was up in trading. The earnings release also gave us more details about Traeger’s plans.
Traeger’s CEO Jeremy Andrus revealed on their earnings conference call that in July 14% of the workforce was cut. That was a result of their grill business being down 25% year over year. Traeger thought that the pandemic fueled growth would be sticky and expected growth in grills.
While we expected moderated growth in grills in the quarter, given we were lapping a 40% increase from the prior year, results were lower than anticipated.Jeremy Andrus, Traeger CEO
Beyond layoffs and other actions previously announced, another cost cutting action they’ve taken is reducing discretionary expenses such as travel and entertainment, non-critical professional services, and marketing. Traeger believes the cost cutting measures they’ve taken will reduce expense by $20 million on an annual basis. Their new guidance for 2022 is revenue from $640 million to $660 million and adjusted EBITDA between $35 million and $45 million.
The earnings call wasn’t all doom and gloom, they did reiterate what they said before that they plan to cascade innovation down product lines from the Timberline. They will have more details on this in the coming quarters.
Also, it appears that the MEATER thermometer is performing above expectations. It might be reading too much into their accounting, but there was performance based expense due to the acquisition of MEATER’s parent company Apption Labs. This usually happens with there is an earn-out for an acquisition, which is a performance based incentive for the management team. If there’s additional expense for Traeger, that likely means that performance is higher than anticipated.