Weber pulled the Band-Aid off and released earnings today for the quarter ended June 2022. As they indicated previously, sales and earnings were down year over year. In addition to releasing earnings, they rolled out their cost cutting strategy to recover from the poor earnings.
The cost cutting strategy is similar to Traeger’s, eliminating discretionary spending and layoffs. Weber is cutting 10% of employees and thinning out the management levels in an effort to increase innovation and speed to market with products. They expect these actions will yield a $110 million cash benefit in 2023 and continued benefits in the future years. Weber claims these cost cutting measure won’t effect their new product pipeline over the next 18 months.
In Weber’s earnings press release for their earnings they attributed lower sales to the following.
The decrease was driven by slower retail traffic, both in-store and online in all key markets, due to rising inflation, supply chain constraints, geopolitical uncertainty and fuel prices, as well as foreign currency devaluations within the quarter that impacted reported results.Weber Fiscal 3rd Quarter, 2022 Press Release
What’s interesting about their reasons given is they make no mention of last year benefitting from stimulus checks and pandemic related consumer spending. Even in a normal macroeconomic environment, it would be difficult to match sales propped up by those external events.
Weber did not provide financial guidance for the rest of the year.