Traeger reported their Q1 2025 earnings today and as you can imagine the conversation was all about tariffs. We knew coming into to the call that they were raising prices, but we got insight into how much tariff they’re paying and how exposed they are.

Before getting into all the tariff talk, their performance in the quarter was similar to the preceding quarters. Grill revenue was up, but accessories continue to be a dog, led by MEATER.

Moving on to our accessories business. Revenues were down 27% in the quarter, driven by a decline at MEATER. As we have discussed, MEATER continues to be pressured by a slowing backdrop in the Smart Thermometer category as well as heightened competition. We continue to implement strategy changes at MEATER, including shifting the promotional calendar to drive increased conversion as well as bringing on a new digital agency ahead of key upcoming selling periods. We are also implementing cost reduction efforts at MEATER as we reposition the business and seek to stabilize demand.

Jeremy Andrus, CEO of Traeger

Another strategy they plan to implement is bringing MEATER away from DTC and into their wholesale channels. Compared to other wireless thermometer brands they have a large competitive advantage in brick and mortar.

I think what has changed is the amount of competition within direct to — online channels that we believe isn’t necessarily the long-term future for MEATER. We believe that the unlock really isn’t how we drive road map through the wholesale channels where we have a competitive strength and where there’s less competition.

So we may see some continued pressure on top line as we navigate and sort of shift the mix from online sales, Amazon, DTC to wholesale accounts, again, where we have a competitive strength in addition to really thinking through how to unlock efficiency and optimize the cost structure really in an effort to centralize the operation and evaluate where there are profitability unlocks so that we can stabilize from a profitability standpoint, reset on how we think about long-term growth and then begin to fuel that engine long term.

Dom Blosil, CFO of Traeger

Tariff Strategy

With 80% of their grill’s manufactured in China and the other 20% coming from Vietnam, Traeger is directly impacted by the tariffs that were implemented. They explained how much they’re paying on their imported grills.

 And stepping back more broadly, [Section] 232 is — it’s assessed on all non-U.S. steel products. It’s 25% and it supersedes other tariffs. So 232 is not stacked on top of other tariffs. Except in the case of China, the IEEPA tariffs are stacked on top, the 10% tariff. So it’s 45% out of China, 25% out of Vietnam. 

Jeremy Andrus, CEO of Traeger

Accessories are more of a mixed bag in terms of tariff application. They range from 10% to the full reciprocal tariff of 145%. They said on the call though that 75% of their accessories are made outside of China.

The grills get hit by the 232 tariff. And so out of China, that means we get two 10% IEEPA tariffs or 20%, and then we get 25% on the grills. Accessories are subject to all of — to the other tariffs. And so in the case of a cover, for example, sourced out of China. That would have a 145% tariff on it. And so it’s — I’d love to say that there’s nuance and it’s not quite as simple as I could define. But generally speaking, our accessories, the majority of our accessories have a 10% tariff in part because the majority are sourced outside of China. And so they’re subject to a currently the 10% reciprocal tariff.

And so the other accessories are sort of — they bounce around between 10% and 145%. And of course, you can imagine that in an effort to not pay 145% tariffs. We are moving those. Our highest priority is to look at the accessories that drive the most volume and attached to grills that are subject to 145% out of China. And that’s just generally our strategy. I mean, we are — fortunately, the last couple of years, we’ve been working on developing partnerships outside of China, and we’ve made progress, and we are definitely accelerating that progress right now.

Jeremy Andrus, CEO of Traeger

Traeger has some redundant sourcing for their SKUs which is also helpful to mitigate the impact of tariffs. They can’t produce at full capacity yet outside of China though.

We don’t have redundant sourcing for all of our SKUs outside of China. I would say for our highest-volume SKUs, we do have redundant sourcing outside of China, and we’re focused on building more capacity for those. And where we don’t have redundancy out of China, we are laser focused — at least where there’s adequate volume, we’re laser-focused on taking those outside of China. We’ve got multiple suppliers in Vietnam at some phase in sort of development through mass production and they’re also — we’ve got supplier options outside of China and Vietnam but within Southeast Asia that we are working on.

Jeremy Andrus, CEO of Traeger

While they’re working on shifting production away from China, it will take the balance of the year to materially reduce their production there. Between the uncertainty with tariffs and the responding consumer sentiment this summer, it led to Traeger pulling their previous financial guidance for the year.