strategic priorities. financial our for over update to second joining the turn results I quarter to near-term call Thank our details XXXX and discuss provide our will earnings to fiscal Nick. quarterly quarter on I and performance Today, Thank guidance. an will then our second our you, Dom you call. on discuss
During topline lower the the negatively pressures are by for headwinds, impacted quarter. business anticipated and materially outlook than which related negatively quarter, second drove results other for the These several our our impacting the was headwinds balance current macro and Despite brand category, of a challenging the innovator year. the very and I positioning to ability Traeger in confident challenges. backdrop, our remain disruptor of the a navigate in as grilling in
not changed. long-term business thesis has Our
is that penetration. to the large an brand and We grow a incredible we meaningfully continue one, Traeger household believe have to opportunity our
changed However, that our that we trajectory has to are take our previous fully aware us goals. will and near-term longer also it achieve
the and As order urgency position profitability such, we drive taking action of to level for with long-term growth, in value. shareholder to future high are a decisive company
On the of on each our our four last pillars. two earnings conference growth progress calls, I strategic reviewed
and Then prior our I X% which quarter, focus environment. sales the the second business were to business, evolving strategies and in down million, the the grill of In that opportunity. to in be the I rapidly down Traeger’s for long-term implemented actions weakness why our I was change outlook the confident with growth have will $XXX discuss particular our continue and our would in the year, XX%. Given navigate assessment pressuring are dynamics like instead to near-term the backdrop on year, we the
the a lower anticipated. moderated quarter, grills results we growth increase were we than were from year, the prior XX% in given While expected in lapping
trend the sell-through at In $XXX continuation million we our of we full sell-through a noted order balance million, $XXX for starting March. the of to earlier from As arrive see to the guidance softer year. year forecasted the year, we deviation prior assumed in began our to sales of previously this in
However, year, a our as there even of softer sell-through trends most of trends. retail important are that more quarter, deviated includes sales few the moved factors to weeks believe through assumed. we sell-through are We contributing the which than some second what guidance
a after we hospitality period two-year accelerated towards First, like related is expenditures grills, declined at durable and sentiment home to second of weighed on furniture. experiences. strong lows shift abnormally occurring of shift in trends psychology. is stimulus. at a in and quarter of lapping the behavior consumer discretionary record and a talk travel Furthermore, the from were XXXX, as demand government sell-through sectors believe quarter from shifting we appliances growth greatly in consumer goods strong driving benefited This time such is the that the of inflation looming This consumer when consumer goods, when expense spending elevated in consumer spending recession as in and
XXXX quarter. down are of decline are pressure our sensitivity understood below years, pressure to range at were decline While in this the to The inventory average grill sentiment and the declining we than great pressures macro the believe through and of through This put partners We a these the likely our May adequate earlier largest inventory away believe Compounding unprecedented down given amongst durables heightened XX% face that category comparisons more in category grill move down point. as are we is in from that range. to under environment grill stock, to basis and than is range basis. reflects factors consumers greater sell-through driving than was inflation immense in double-digit we To spending sell-through and have holding chain on retail. the the category significantly of have a over grill is down the levels second category. is in into recession, XX% the the in year-to-date. the their category and We continue been impact likely last on combination shift more more two unit the the to year, an typical. shopping revenue to perspective, the product the price XXXX financial low during the consumer sub-$XXXX effort deepened this year-to-date an retail our In the aggressively this of sets. that at in industry-wide planned issue In lower ensure data volatility $X,XXX grills are seen supply particular, replenishing heightened seeing the
driving as in sharp in missed greater retailer’s macroeconomic are a sell-through our forecast levels of the partners in-channel backdrop with ordering Higher season, retail slowing a led to inventories bullwhip and effect, our Often behavior. combination to recession the grills As shift we of peak selling in than inventories to target. specter increased a tends have referred in will activity now substantial our quarter is which inventory for product which second the pressure These our for our quarter. half impacting heavy category, outlook revenue negatively the factors in in sales, on of a third are replenishment year. based the replenishment balance particular to the and reduction a order be year of
the our the macroeconomic right-sizing our environment. inventories for This are and consumer of down efforts gross the of and on positioning to for structure process two-year cost resizing the business We revenue the are rate, drive margin. current recalibrating are while on for period this a run that includes doubling in keenly stabilization, outsized after backdrop we and we aware hope growth focused
navigate near-term Let the environment. me walk through as priorities our we key tactical
Earlier non-essential strategically and reduce first to priority the our this certain structure. manage deferring near-term to reprioritizing and year, we discussed reducing P&L. cost Our expenses is SG&A
efficiencies broader implemented Given experienced in best a rate and to consumers. to the the the the highest July. organization We quarter focus for streamlining we are in our operational believe effort to best we will efficiencies second the and drive run in positioned drive lower business, return protect and investment allow will initiatives experience late these plan that revenue cost on and on actions in an the and profitability reduction drive
actions. to Dom savings discuss, meaningful realize As these we will cost expect from
the First, reductions we This expenses includes aggressively professional of non-critical discretionary top reduced have funnel across and entertainment, travel services certain marketing. and in organization.
workforce of salary full Second, which XX% the July, approximately in impacted reduction in initiated we global late time workforce. a
thing this our decision, the to a very difficult do this we believe While for business. right was was
process removal in the on head be of reductions roles that priority, are areas consolidated, lower that focused of identifying business as business. provisions count the the as Our could in well
quarters, have all added forward We these departments a I dedication the value the our significant team move amount and last thank would strong and talent to across of company we of several colleagues their members contributions we of the the business. impacted with team. Over an to for like incredibly
Provisions. suspend we decided Finally, of operations Traeger to
us to this since Provisions delighted large profitable incubating required to been provisions continued have November our in of customers with on investment resources the given and unprofitable core its offering the current was business would constraints appropriate in year, for scale. in have the P&L. launch is runway believe its Despite business not last the internal While given moment significant potential, new the order We growth of business. the be in
Our next in-channel our priority sheet well including to strategic inventories, as balance is inventories. right-size as inventory, both
we supply we given chain constraints last leaned inventory discussed, As and have the several into over have quarters, volatility.
working as sales our volumes inventory. reduce includes inventories. aggressively through manufacturing the we Asian in lower existing Given are work forecast, to This sheet materially facilities, we production balance our lowering
critical our While current risk, very capital little carries that with grill align we it is revenue inventory obsolescence picture. working the
for near-shoring effort also As demand, our and postpone align supply halt to to production this Mexico. plans we part in to of decided and efforts
U.S. core remains a Mexico. been grill demand While strategic would benefits we of dynamics have to SKUs initially manufacturing a our current what long-term and market the supply production of couple believe of closer objective, in diminish only
to and note days drive the on is the inventories, we of important thoughtfully health the retailers selectively It of we of brand. strategically use terms will that efforts channel working In manage promotional in with to hand, with actively promotions sell-through. priority partnership our including are compromising to not using
continue retailers cadence positioned such retail a in-channel, goal inventories to to that more replenishment our normalized on the collaborate current We return our destocking. of will to partners versus the right-sizing with are
on focused driving Finally, margin. gross improvement we remain to
the cost Our favorability and as currency. we effort efficiencies ongoing expect Opportunities well identify will reductions as rates, and have are an new warehousing. been costs, to logistics gross savings product supply continues container in and for in margin seeing the cost identify cross-functional on savings chain. across move and input to packaging, that spot in including execute areas collaboration This team continue identified we force Furthermore, forward. task we is as
my do favorable initiatives Traeger and incredibly we expect challenges Despite beyond. for to these dynamics, the materially face. that best position cost gross the well we through to must margin remains we as in as inventory, are we XXXX believe challenges, strong. navigate steps taking work will higher we the Traeger Overall, as tailwinds right cost confidence unprecedented first impact XXXX I not margins, these building macroeconomic that see our While story
factors the driving are of some that Let my through me walk confidence.
around content and that consumer brand engagement content of quarter, act user-generated the energy up XXXX using consumers for wood-fired community day the cook highest second Traeger off love evangelists strong. is Moreover, ever. Traeger were views outdoors and remains the First, global to to and held last which share to media a to the video both May, season. for their the Day with in post extremely single continue the dedicated food our to Traeger Overall, fifth social Annual bringing the is was we indicating Day, kick significantly grilling the In brand. versus and Traeger organic stronger Traeger brand user-generated family the as for than and holiday, our friends history brand. with the together year,
Our NPS remains industry an score at high. the all-time leads and
to we bringing scores Grill are NPS our with new having to of the entire market with Timberline continue in delight assortment. our highest the We innovation consumers some
core for backdrop the markets, of despite in the year. awareness continues grill tough Traeger Importantly, to brand this grow
the despite example, of presence brand growing up some brand productivity. increase the our a merchandising our of markets. meaningful important our long-term penetration retail drive versus West partners year, most and including efforts continue largest last penetrated is awareness and to in Increasing is key Furthermore, our remains our this household penetration awareness at opportunity. geography and For driver XX% over most
earlier assortment have and broader Depot expanded brand They high after higher In elevate the nearly For prominent These floor Depot with messaging, on stores Home Home with our and wooden additional accessories a we SKUs, fixturing. third number grill well of XXX of to assortment, XXX Depot. grill including brand the at double quarter, decking, include end up as The over fixtures X at XXX Home sit and an above will Traeger Home have locations the adding be example, grill year, this as assortment Depot consumables. accessories. an of now and end we SKUs signage The resetting and Traeger doors
has of as has pipeline. The energy ever product This been higher market which a launch at am average about model our halo the changing excited have product much significant brand. price our a well-received recent I the and Next, to innovation as game I is point. Timberline been brought than to brings
innovation As assortment grill we to look have from years. the in mentioned, this coming recent cascade across we our will launch
road it encouraged and portfolio. forward While am the by look update too side I backdrop, and XXXX consumable next the over quarters. product discuss on launches both the an challenging our trends in map early to upcoming the XXXX, on am I is product to Considering extremely details, bullish providing for the few of
sauces its and XXXX. our acceptance in revenue channel trending rollout performance second increased consumer Our levels subsequent rubs speaks close This resiliency the in to Sales pellet is sell-through nature. quarter the XXXX from the growth our to grocery strong of and maintaining distribution Kroger. business over the of at benefit to recurring pellet and and
We our with core continue brand. to the a grill Traeger is to strong business believe complement which consumables consumer and engagement recurring our revenues drives business,
outdoors grill and data outdoor I of cooking after growth cook cooking proven category. has The that Americans resilient normalized Lastly, are time the of in at as confident to category even shows the world be height love remain more over has secular home COVID. the the to and
summary, that, with the our satisfied environment normalizes. a and the growing year, are backdrop swiftly In implying our In fact, are to Traeger near-term to and similar decisively consumers highly not remain owners cooking emerge our for engaged pace financial we we data product. and with to position that connected results are ourselves last our acting shows at stronger when challenging
proactive continue with cooking the Traeger over outdoor will back to challenges, facing the sector. value. profitability, to I on brand And taking drive Dom? of shareholder to are and steps and We will Dom. historic its to put path Despite Traeger it that, disrupt turn growth
