Earnings call transcript Q1 2023

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Operator

Hello, and welcome to Traeger's First Quarter Fiscal 2023 Earnings Conference Call. My name is Terry, and I'm the conference operator for today. [Operator Instructions] I would now like to hand the call over to Nick Bacchus to begin. Please go ahead.

Nicholas Bacchus

Good afternoon, everyone. investors.traegers.com. Traeger's we discuss can released on website joining XXXX first be for our which results, this at you call its to quarter found Thank afternoon and Relations I'm at Nick President Bacchus, of Traeger. Vice Investor With me Jeremy Chief Financial Officer; Executive Chief today Dom our Andrus, Blosil, our and Officer. the on call are

current this anticipated get forward-looking on statements, contain materially started, remind but full implied Before are or may XXXX expectations want we which everyone herein. that to those from to and regarding our subject call to I management's year results expressed cause differ remarks substantial on that uncertainties are including actual based risks results could

and of available on We uncertainties our XX-K our report encourage also the Form these which to filings are Relations Investor on annual website. review for a other factors our SEC XX, and discussion year of portion you XXXX, the for ended December

take as them statements. new undue or forward-looking revise reliance for these and You obligation update no today, should undertake information. of not to on only any speak We we

website non-GAAP financial measures investors.traeger.com. will we GAAP which in our measures, herein supplemental our Relations of is contain The useful believe certain Investor comparable margin, net financial non-GAAP earnings adjusted call This adjusted are including adjusted available which directly to and most at measures. reconciliations measures measures of income and contained also portion release, the such are included GAAP on EBITDA, gross the

of Now over Jeremy Traeger. I'd to Officer Chief Andrus, to like Executive call turn the

Jeremy Andrus

on to details to discussing the call well results Nick. then strategies. call. quarter for we'll performance. quarterly Thank as executing on be Dom earnings over I long-term as Thank financial the will our first further quarter our turn you discuss our you, our progress joining first Today

position second of line we top continued XXXX. in our the a business challenging navigate we a quarter, plan half environment growth first to and against execute bottom as the to and for the In return

$XX the the First quarter $X organizational our in on our for our ability EBITDA end and exceeded million of range, came higher quarter revenues pleased I million. EBITDA our results our by while with end towards focus on profitability. of the adjusted high our $XXX million overdeliver to guidance Traeger believe of of demonstrate am guidance for adjusted positioning range strong improved

result, well line top our consumer guidance. our demand be prior achieve year While our to reiterating our guidance. in to ability a full quarter by as confidence grill in as are pressured results increase destocking our retailer we continues first our business, our as And lower

first remained the negative The During our to the when comparisons. retailers last by strong continue sell-through quarter, demand consumer inventories. retailer destocking multiyear impact in the first lap we lower year last still quarter of were quarter compounded building was grills of very compared year continued versus first to the as quarter

However, sell-through the coming forecast with in the quarter into our year. was in line

that cooking more am was Importantly, a an which be we lean what to to I the promotional year. promotional continues face the predictable in return first elevated prior see in environment more similar following encouraged effort in of at an inventories, to a typical cadence to less demand consumer the and despite promotions more a aggressive to outdoor broadly. pattern promotions quarter holiday in channel clear retail in demand reverted we into accelerate in to period industry

first tactical priorities over the continue discussed we our against have quarterly last three to near-term execute we which In quarter, the calls.

inventories, our rightsizing terms we efforts. are progress In substantial making on of

inventories on in to sequentially our a destocking declining sell-through channel drive and to quarter. relative balance inventories both materially the in with inventories a efforts in led and to sheet Our retail production levels initiatives picture last lower conjunction partners had improved with channel

believe process be grills. that will expect the of more to this more rates aligned continue second replenishment half quarter fully rationalization for will and inventory inventories normalized which through will allow second We that continue in the

remains highly our cost seven increasing optimize facilities, mill margin the by footprint ample strong we efficiencies other per higher mills our driving drive pellet we mills margin, by the years. gross to business in we focused growth improvement. five coming of to meaningful our in On cost from pound. pellet on capacity pellet made utilization team manufacturing to portfolio Moreover, strategic fuel our the a consolidating improvement in In in and two have first expect and capacity five divesting decision to quarter,

to enable lower reduction initiatives the in efficiency investment which for adjusted benefit while through In XXXX, of terms for we capacity growth we the of remain in on despite EBITDA our into million. expense which our year, if the $XX the undertook cost quarter, deliver plan cost growth efforts realized our We prudently to we enough high to north Further, annualized will have highly of resulted company structure, cost as structure priority last first invest increases. planned nimble move in the year sales. guidance expense we remaining focused savings

pillars. to our strategic growth Moving on

be Our States. penetration brand continues to and largest accelerating awareness long-term opportunity United in the

innovation distribution expand our to retail Our penetration enhanced materially by retail space current we network in-store of from through driving share strategy marketing increase our outdoor Traeger's devoted X.X% and believe Traeger the can of the awareness household we cooking and productivity is our to merchandising, community partners' floors. increasing brand product of meaningfully existing engagement, on

at our from an despite Our this months. is last investment and the time high remains capacity up year, all-time XX top-of-funnel materially marketing over last limited awareness brand

to as our on We were XX% versus In followers social by brand our a post, which awareness continue we the grew brand. the user-generated last and up content year and of demonstrate view for XX%. growing medium in participation first our with quarter, by engagement community key our evangelists media

of for year UGC Bowl, record Traeger up the post Super post our game and resulting offered on in using game For content content unique to recipes we encourage hashtag, community day. the and the another the day

more coverage covering and our reviews the and of quarter of grills is continues media increasing our than launches, Traeger with list, new reach to first consistent has also TV articles for numerous top continues Our be product cooking and talking recipes XXXX featuring awareness Traeger everyone to that versus benefit and spots mentions about. Super XX media from brand last tips year. doubled grill the Bowl in

Going enthusiasm into our summer brand peak selling the around ever. as Traeger excitement as the season, strong and remains

dedicated about Next week, In and a the and on cooked holiday ahead May anticipation family, Annual the series new generate grilling Sixth our of community Traeger. we friends released content of of awareness The food Traeger Traeger Meat our is and encourage XX, on XX. season, Flatrock together videos massive and on on our featuring to recipes Pittman the designed Church barbecues we Ironwood. cook of celebrate May our with funnel have top cooked will Day, to wood-fired to it post to Day Matt and

disrupting to which pillar, cooking innovation. is second our product Next, growth on outdoor with

was our that The our our go-to-market Flatrock outdoor are our team's I'm commercialization. were and of is of Innovation Ironwood innovation market we These the critical core history, launch product the is new company development bringing in level product and of some two of to proud execution the strategy of with to our from cooking in grills in the our brand's first at quarter a and extremely remarkable. new map most February, the period new innovation road successful the griddle. of launches

as our product disruptor. The launches first cement quarter industry is position an

technology, Ironwood cooks Firepot features new master series consistency Our The upgrades features. FreeFlow their like Ironwood Building introduction, flavoring Combustion last from user the time. offers new on and every and enabling has response Timberline a through Smart year's consumers been retailers includes fantastic. and to of of unrivaled new innovation touchscreen interface, a the consumers

of positive Rolling The and Men's of the GQ Stone, over The launch views from and launch had during XXX,XXX the premium media social our Ironwood Traeger Top Flatrock a phenomenon. media Forbes. been on has Flat Journal, Grill, period something receive

of our the like smash Flat and philly Pellet category Grill, expand Top Wood marketplace We to an the the have few Traeger speaking a opens in there griddle new menu years. premium dishes Complementing cheesesteak to hood and for Traeger Grill the in disrupt that the the understood new And over a community, burgers. last space. with opportunity seen foods a our up gap an entirely was Tried of pancakes, we and meaningfully for True grill

The points Flatrock users Triple with three cooking separate launch and design over several like XXX,XXX construction, FlameLock which with system launch for been heating pain during grill and even period. locks most common zones, zone over solved on our social video in cooking out and innovations with for media cooking our U-burner the surface true the history views XX,XXX wind. blocks engaging engagements the heat The across has

significant a as And Flatrock move the as year. there through response launched are We opportunity distribution is distribution, far. pleased with with consumer to this extremely we we limited have increase thus

driving is revenues. Our pillar next recurring strategic

introduced As pellet of the demonstrating was last customer, expected, who first business lower pressured by year. stream. excluding nature business a line with sell-through customer pellet our was in consumables and in private this, the remains large quarter from the our of label offering Outside quarter first healthy this relatively demand year, those recurring last a revenue

grocery channel. added the and pellets first Raley's. Spartan continue across doors pellets also to In we quarter, distribution new nearly into Albertson's, grocery We grow of into the Nash, XXX

over We adding pellet X,XXX offering barbecue our in our by grew pellet value-sized XX-pound Kroger new at also select doors.

new execute side, offerings. our on over strategy consumables doors note, product new channel for we to On and Of XXX distribution and the Traeger food growth we Myer. secured expansion of continue in sauces rubs through

of rub. We griddle focused popular support launched the launch Spicy Rub, Burger also and most the rubs Rub, meals Breakfast on Fajita three new to Flatrock,

pillar pressured quarter. to our retailer growth U.S. business final is internationally. the Traeger brand in was the first destocking the market, international Our expanding the by Similar

with the drove our new new introduced and and on in In results quarter munis activity. markets product reorder Canada. led Timberline first were to However, The we Ironwood in for floors our European in quarter, Europe line improved and our the retail internationally excitement expectations.

in respond the do half pleased meaningful by progress we in continue markets, second our new softness Overall, consumer In quarters to to the we we tactical I'm were encouraged see And three expect made improvement near-term on we the meaningful have international conclusion, trends. product. in priorities. to expect sales our last while

of on margin the for business response to a outdoor consumer launches structure exceptional beyond. and position and confidence half year our cooking improvement our innovator the and Moreover, long-term my disruptor and second gross in focus driving inventories, to return will in industry. positioning growth team's and as Our excitement strategy an rightsizing reducing the new Traeger's bolsters in the product the cost

And with call the Dom. to that, Dom? over I'll turn

Dominic Blosil

afternoon, everyone. Today, and fiscal for and our Thank outlook quarter XXXX. I'll review year Jeremy, our you, performance discuss good first

an partially million. lower was inventories negatively XX% last selling prices. retail channel to as destock revenue end Grill $XX $XX to by quarter were $XXX continue lower first quarter revenues revenues offset to by by declined million, First drive our revenue down impacted XX% volumes of driven higher lower to million. in volume effort Grill average to XX% declined Consumables unit of pellets. year, partners

Our load-in lapping the in consumables customer a label negatively by business the loss well pellet last was of channel as last as into food the of introduced year. year the private quarter a volume grocery impacted with who large consumables first of

impacted unit Accessories XX%, down X% decreased $XX $XX first down XX.X%, by to of million revenues million revenues sales is the quarter partially mix XXXX. XXX $XX to our due for some offset expenses gross profit meter. of XX%. tied down quarter American was by, quarter drill while in of first margin timing lower Traeger were XX of million the spring one, margin volumes of branded versus lower XXXX. gross of driven were revenue first decreased in promotion, increased basis margin from and by The Geographically, to pricing to profit the primarily points Gross North accessories, Rest margin negatively decline due points. World basis to which Gross

XX amortization were: and which XXX worth logistics which basis other points; Offsetting and points positively XXX margin items points; lower of drove these unfavorable basis three, two, FX points. Two, one, pressures impacted margin and of by basis favorability. costs, freight favorability, basis increased XXX margin

to $XX compared stock-based lower reduced expense, by expense, and primarily first by million XXXX. driven professional million quarter was $XX fees. to million were fees The driven quarter in administrative and XXXX. were service the The in lower was professional compared $XX general and costs. service General decrease expenses costs and expense $XX marketing first and of the Sales decrease of expenses administrative compensation lower employee employee primarily in lower million marketing

of first First restructuring million realized actions loss a from quarter quarter Net cost in savings per compared of XXXX. income to of and of operating was of loss $X million was net and in first the for million compared the share the Net as the a $X expenses last to in taken income quarter $X.XX XXXX. in first benefited we annualized excess savings. $X.XX quarter $XX diluted year,

or in compared the XXXX. quarter of income Adjusted share net to the to net first diluted period in income Adjusted $XX or $X.XX for adjusted compared million was diluted share $XX $XX as the of $X.XX $X same as same was million EBITDA XXXX. in period quarter in million million per per the

was First guidance quarter between the largely approximately was operating the the guidance first lower-than-expected end expenses Outperformance relative to adjusted of by due EBITDA million and timing the of of to $X second ahead expenses our driven our high mainly quarter. range.

$XX quarter, compared its end the million. totaled first $XX quarter the the $XX facility, revolving first down We million end a quarter financing million liquidity At Now total and debt. ended million. the end had resulting balance of million turning to From we At the debt agreement company receivables of credit at cash, quarter, of ended under long-term equivalents the cash with perspective, previous net cash $XX fiscal million of year. with drawn its the to of the restricted of liquidity the in million $XXX $XX the $XXX under total and sheet.

reduce selling to quarter liquidity season receivables our inventory we on and retail. peak ramp through second expect the We at which collect as moving is

at XXXX end the of Inventory the quarter $XXX the million million first $XXX compared of first quarter the $XXX of end to million XXXX. quarter the and the of at at fourth of end was

sequential the pleased with made and, in in inventories inventories total are and the we decline balance inventories We sheet grill the particular, quarter progress which drove rightsizing first the majority quarter. our versus in the fourth of

In supply. retail in improvement channel, we of partners' are weeks seeing our continued

to be balanced quarter, continue inventory process to of are the well year. going in second we half substantially the we a While expect into second rebalancing the positioned more position in the

outlook are adjusted and our EBITDA and for million to terms be guidance In $XX and our XXXX, revenues for of million $XX reiterating million $XXX million. we full be between to year $XXX between

and sales substantial and on XXXX. a half expect first retailer in fourth seeing As to we rates second lap call, our we of year half we growth destocking comparisons in be destocking challenging the by decline quarter the as continued return driven our pressured to discussed of normalize sales the multiyear second half before replenishment by the

sales continue to decline could prior quarter We that XX% excess expect versus in of second year.

of gross our XX We basis which are represents reiterating outlook XX% XX.X%. for our points gross margins of XX% XXX fiscal adjusted to relative of to improvement XXXX to margin

We the XXXX. quarter in margin cost leverage experienced third the large fixed of improvement gross see in quarter the expect the largest in the lap given decline sales we in gain expected third to we as

We gross the expect due for that of costs will lower to the largest the year transportation be decline inbound driver freight rates. margin in improvement

first quarter season. through made the believe are well I peak in positioned move the we with on as we our tactical priorities solid and summary, we selling our am progress In pleased key

to in remains will building the the our We continue macroeconomic highly confidence the environment, our for outlook continued with uncertainty year volatile. balance which around

will in We continue environment evolving execute remain rapidly as our against to this agile we strategy.

that, call with will the over operator And for I questions. the to Operator? turn

Operator

comes The go the line from Capital first question BMO Markets. Instructions] ahead. Please [Operator from Simeon on Siegel

Simeon Siegel

afternoon. Good guys. much, so Thanks

sides. we more little could that Maybe hoping bit was I about So talk pellets. both a

the demand obviously, talk guys large And the thinking So quantifying a some side, do the retailer. secondarily, benefits, on So the a can of you element so side, there what color the can you the with we costs? supply about any talk then the through think from maybe mills? more will of consolidation little bit through

do So you've people responding? their we proxy. Maybe pellet offering, we from that? color lastly, as use then any when how seen lap engagement are And an

out distill and retailer seeing how to general? of help think in just change So in through us timing? usage the you're maybe engagement Just

Dominic Blosil

entire two over just the of the into terms start I'd closure months saying executing that with the XX it, ties optimizing now call we of and the start a as the post Good what the strategy dynamics really right? questions. as better cost last, our about well the structure pandemic pull demand this we've understanding the that fact for broader we think experienced. business, mills, pandemic seeing forward getting as we're in I'd during And right? So of the we're by pellet first been that

two, strategy cost and think is, to here kind rebalance pellets. just this pressure the again, what on and part system; of, that I capacity reoptimize forward, had our our putting we unit economics overall our in effectively structure of on the too we one, at point really that we determined much landed of was as

opportunity level of can demand forecast capacity the And today capacity our rebalance we rate what unit that to optimize basis the light the run rate that a next, identified the about. we allows two, for very economics we of that for a that call something years. that so and And the in our to us on capacity. it, turn, that is improve we believe And was three can adjust excited in utilization to pellets we're

And X the to the the were layer of remaining than portfolio is portfolio. -- the second we frankly, that efficient were pellet that, had mills think less I identifying luxury in we that

utilization of pellets. from those standpoint gains And shift so capacity a areas and of pick demand some we on can economic actually unit in the or further up other

we think operation line So improvements strategy pick to to of the that's improvements up our a we factor. just in with that and margin, margin in broader in the something continuing wanted in component about and driving really address It's just particular. gross how

sorry, can question? you repeat -- on question The second second the

Simeon Siegel

through be -- Just may demand..

Dominic Blosil

last... it the Is

Simeon Siegel

side. that's just supply the I think

again, maybe us seeing How basically about retailer you're are the from thinking you how dynamic? what just And to or versus the demand sell-through? are helping engagement? textualize Just selling thinking you about actually

Dominic Blosil

So two demand at of and consumables, we in really look sort of particular, the the usage ways. in

why consumables installed reversion and our and attach in associated all during what is back base, just rates. of We've against attach now the is where be. calls we're right, that, spike first sort the pandemic, through a saw would talked on The attachment always we and about pandemic this previous given with a renormalize to pre seeing of factors right post believe that pandemic would that

and is more our And falling be, line of so bit now install what large here, pre-pandemic look of ahead pressure seeing launched sort attach where little tracking customers. we via in think the is as expect I to of against we're or by we good label of the news pellet with it the one private kind would incremental save that a

we're As it's on second is into a about demand, tail the which the rates, is that, seeing measure there usage we collect, that IoT think And continues think right? consumer a what to be positive. we which of I data layer to better a more read

which as and of cohorts So multiple aggregate we usage evaluate of at sort cooks way of vintage you well in ways. month-to-month. as like-for-like kind of is it over look kind those as One is time via cohorts,

as grill a given age explained say, marginal that may cohort. by year in side, what Like the may four, cook the shared per life pretty approaching of replace is on it's cycle in month. that a the decline that part what a they're cooks ages, aggregate over that we consistent number we're cohort would terms fact to the into they a is expect. seeing to On they're And XX past be of a cohort with cohorts there data, new enter of in and as what we've looking in usage And time.

positive would you exactly feel each it's we the to pandemic and you And I playing a as they're very pre-pandemic at, So expect. cohorts which cohorts. post-pandemic at cohort as -- layer the it's exactly is as say, is look look think are exactly that, as we cohort, same second out behaving

very base of cook who what mirrors product see that consumers, first kind is And we've a time. our of of users historically. over similar really what we building And think seen so behavior same installed I year behave of of just in the pattern here

of us up what of the at forward pull this hoped would did demand, there's highly gives a into it the of to we're lot so forward continue And product that also though confidence that in consumers future. picking and overhang just the we be engaged that pull day, the end active will with do even our

Simeon Siegel

for the year. That's rest great. Best the of Perfect. luck of

Operator

question Benedict Robert The line Peter of the next from & Co. on W. comes Baird

Peter Benedict

XX% guys quarters. question just build Dominic, you rate you year. The quarter. still move first during to Do XX%, sequentially expect the XX% gross margin of on margin, first, I gross see kind still over little the expecting a are recognize for as we through the

see time kind north maybe of XX% longer so my and how kind term? you to related question, to the And that that's first of over walk of

Dominic Blosil

Sure.

say would that tone remain cautious I'd me So we on HX. more give I --

think consistent. that's I

year QX, in look we're that at internal half where high the carry inventory talked sequential about with cost first in we'd that, wouldn't higher pressures in part we say So be. look happy landed sort gross margin actual will the our of remains consistent as like right? the at the our to would than the gross of in margin QX. -- building Really, that still I the no the in past, we've carrying we're we models seeing surprises a to be due QX I necessarily So still we as it show. in improvement fact as of versus what

where months they're to realizing back as suggest we cetera, wouldn't given year from in that's we I half Where substantial cost begin some for back paying internally and all gross to by way expect the clear fact shift ago, to improvements that a to what there really contracts levels but work, dynamics were nuances inventory, ago. are forward inbound as containers the we this you transportation driven of et we'll six how pre-pandemic the that improvements market, year where of around largely higher take the improved of rate in margin, sequential the our what advantage the start

half consistent then about the viewpoint on So -- half. gross terms the in margin a of think we back future improvements sequential that's in cautious of one, first how in the And portfolio really an how with just via the the in Our comps portfolio the year terms driving really higher theme, right? strategy focused with to margin. management, Yes. mix It's what optimized we spoke in gross the as launch is new expansion within the product consistent future. of we past, on: margin at

X It's highly we continue down functioning strategic sourcing within lean a as expert-oriented manufacturing as build really team margin. to element product landscape cost of great as continue example and and import we've on just over how just to and the the tailwinds value operational Again, to we time. gross product operations out And of one we out lastly, a proven general highly chain, portfolio the has and which direct to well our think be building then go to where cut improvements. out used about in layer existing

Peter Benedict

shape is in getting question [indiscernible]. I second of inventory better the the No, that's mean helpful.

seeing more. It's a of You part and think half Maybe I guys a the the sure what were understand early in that demand there in make to referring and bit by be back talked important are here just little the assume that week-to-week retailers of you maybe tease -- spring? to that what as the dynamic, about Is I probably out of referring move Jeremy, gives replenishment an will want in year? you we forecasting kind is normalization that you to you you're season. into build spring and confidence start -- patterns. I

Jeremy Andrus

Yes.

more fairly reasonably are been week So certainly then compare would got data sort -- on seasonality track volatile couple downside. last in point-of-sale upside and seeing our would I are components the to in seeing say, for three and pandemic multiple years, that, One carefully and the the And on say think I whereas we're a that predictable, against predictability is of the that's normalized prior of against this the where itself. there I year week we've And predictability. we first years year, very last it's just forecast. we years by have time

gives The guidance is us allows confidence second through. as component levels, they're that inventory down -- to which back in coming forecast units us effectively levels healthy retailer the our our sold replenish in to really

quarter, improve the certainly we seen health we've -- meaningfully the first in quarter. So the in second

We quarter us levels a feeling revenue. retail really place, view end the that expect a like that good we'll into just gives and in inventory are

Operator

line on comes Peter next question Sandler. The Keith of Piper from the

Peter Keith

Thanks. everyone. Good morning,

Good retailers The of long backdrop. environment pull inventory kind steady that something And in the everyone. having back afternoon, smaller day. tighter because is Sorry, just on credit purchases of obviously hearing that background. to drumbeat are has a we're credit the

smaller You guys do this some big your order wondering, small some I'm with ones. partners retail on you any have some there wholesale but out partners, there is also And of trends have issue because of backdrop?

Dominic Blosil

we to over sort they the the work a sort demand smaller of and dating their for uptick really in in our with the and it and flow larger or of retail on flows QX No, of say, the season, given tend periods to not where of own we course terms strong promotional from our in, side. quantities setting positions partners, are have partnership mean that I we're fact et cetera, programs, work just late on we optimize extended cash sort retailers. QX, ebbs

the to turn storage you therefore, efficiently that cash In addition would a because more their go one them the ability preload right, to and inventory our levels we gives kind think manage they're show where inventory to the box, and to going realm larger this necessarily one of to model at have big it specialty within conversion of tend as to don't they that, own see cycle not accordingly.

long a credit I and anything we're to necessarily standpoint partners here, great would in what relative order of a signal way goes up the seen that behaviors. but And trend so from be we want impact seeing, think that haven't we you're a and/or to problem seeing pop terms

Peter Keith

you specifically you associates Okay. know Helpful. do you're funnel would And sales with of of in-store back thinking bottom would marketing. the Are the on product. just marketing own associates, I about kind efforts given so marketing? on that on, pull then ground demos, talked the more What maybe about is discounts, back demand around that that the train of retailers. sales pulling ongoing? also efforts having environment? Or your boots they for still something funnel some Jeremy, top you on those gave the side, you've I'm to

Jeremy Andrus

efforts those ongoing. No, I would say are still

invest in shared we long-term my customer behavior, on metrics about that's in As lean I needs. success -- the to And just long medium One need of do some two focus near platform community term, social, long need that's sort of sauce specialness, term, near-term remarks on user-generated through in the can we prepared engagement. In to think top-of-funnel term, more and cooking, we into. a -- acquisition. to versus components. Obviously, awareness the the in is we cooking we're that's general engaging community of seeing like secret around that content, that always the the we brand

there. the most is markets, back returning and managing which we national think -- cooking of effectively that that brand And brand stimulating we brand important by built we on believe we We a competitive a partnerships retail, training, high at like other merchandising, no executing on has, that In top we investment. we it's pulled outdoor before built really is demand, we coverage. dollars boots the spend have retail. long funnel, haven't a ground, the feel in And advantage that's

example, we And needs Home go retail from retail national the change. specialty as for Depot, like to

of investments were differently. on we the them. retail those years we fixturing so say in I to terms ground make investment breadth sort as we've Home multiple of accounts point assortment notably called into service in islands Depot But making trigger sale, investments with but the would also of these of in And at continue

boots alive So of the into sort media. top we investment this lean will on to we There's as And and to execution sell investment retail incremental connecting is progress of strategy, the capacity. or market no ground in investment is the really with well. question which begin the have and and the on funnel grow more ground, and stabilize begin

Peter Keith

any out call been Depot -- walls? as from the two update end. it, building Home door That's the you and but guess, great. there I the or Maybe of bay at the island the you Okay. the just mentioned not Has expansion,

Jeremy Andrus

we terms The fall. Home few lot made second in We've incremental doors one. of we a fixtures strong Depot fixture that's a progress the find And hundred growth retail. meaningfully continuing very to it's of at add but really the brand of both is that's in by half -- just of We year, this long-term space directly number retail, of at correlated in we a predictable partnership floor -- a the the is of launched And that's again, -- very driving growth. a with space. which will presence form grow sort will and

Operator

Advisory of Feldman The question Joe from comes Group. Telsey next

Joseph Feldman

And Ironwood griddle you the little you're Yes. distribution the social a of in? least to limited wanted end that? ask at bit you more the is at I via the moment. But industry a it response innovation I on a the unit little like as with taking media. Flatrock retail, a mentioned and curious on more some response, probably user. if the would the you've seeing Is seen from I'm you're decent more Flatrock it Ironwood any good demand so, pretty thoughts guess sounds at great well. seeing

Jeremy Andrus

energy social, correlated early in say seeing with But we We're innings, we're in sell-through. early. early we're I May. felt Well, would the that on

similarities point of and meaningful gate in to -- terms of the Ironwood the out would expectation nearly that price. consumer retail sales Our very is base. accessible design which is perform is Timberline, our twice innovation It the that that's a from There's well. was price

pleased response Ironwood. consumer on the we're with So

around community to in of and something ability be grill. speaks strong outside social response the again product. to I but had It was off retail with intended there grill, us expected, to confidence wood than think permission which something we as more to a do that gives have launch the partnerships always a wood us that distribute our candidly, energy complement a really caught that a pellet lot very we to pellet guard, engaged was Flatrock, brand

to will approach grower at the be head are to exceed our believe lead upside constrained believe inventory. eight potential expectation that Flatrock sort long the retail launch In next really into the six contributing there on be do -- for us. months that but six it and disciplined terms year, for relatively of meaningful to to we was a this to components we sell-throughs of time There 'XX has narrowly the

Joseph Feldman

And being what And Great on to more when curious Jeremy, the I Potentially remarks, into could color have in made a they to then think was you guess that. I share going nimble was arise. may to opportunities. hear I you you terrific. That's jump if comment any the other new and one thing that, meant? able about about I ask prepared was

Jeremy Andrus

context XX mean it's sort where been of the last I important about think Yes. we've notably I months. of that to within think the

worked we've -- we'll dollars ensure -- as In get have invest the business. in, the we to -- to back very not to moment thoughtful it be of we lean our initiatives. but a from behind moment that be a initiatives it thoughtful business those constrained to hard allocate being how future. this, as And really we're capacity the in get we are prioritize really investment thoughtful lean to and and an terms in we priorities, like just perspective, We suggests -- us focused are that are that where investment nimble current that to the we core really understand we motivates

will been be and forward. it a always always share going a been has gainer Traeger disruptor. It's

market. long those multiple And the to investments. so for some of to for example, -- to thinking get time takes about important It's product, years into product to it lean to us investments lead continue

decision have do as from business we we that create we're make, plan, so growth. what future versus what back upside we we flow a invest and to to driving that's do in the ensure through And

be spoke being reinvest to share of gain about and we when upside some that term. I so around willing And long our ensure to the priorities a nimble being continue really is being or to thought

Operator

Genuity. on question McNamara from Canaccord next the from Brian comes The line

Brian McNamara

in weather you bit. you if could when worse know April they'd a two you expand I'm reported curious helpful thought they wasn't months On standpoint, channel I QX. in be better, May. that a June where but or sequential seeing spring when catch-up I to how you're into this May it Is improvement about start and as Historically, there's a there's guidance? are imagine a would category. line? from reaffirm inventories you thinking Are late ago relative to you for

Dominic Blosil

Yes.

plan, think the Part enter certain right. a in-channel that relative positive I of a as our of And We our course fact on inventory to we spot at of And a really we kind hand where the isolated over and plan standpoint of an that we're that's peak positioned nice of a standpoint. had from is we'd front in of that sort an thought QX -- improvements ahead saw SKUs just confidence that we now problem standpoint. actually from selling So be. to better more the our channel from inventory level of really think season, news. builds than that's I in we weeks

an we're in inventories. balance the improvement on-hand accelerated think, And that's there. into, I with happy progress So also sheet translating

Brian McNamara

X% mean, just guess from X% I And perspective, guys it. Got share. you have unit to share I unit a

after gain to with you space channel I'm just partners market you be channel. shelf the your in expect we floor in inventories, definition, these retail by all the normalized as curious more do a resets environment? So space the guys clear can't or problem

Jeremy Andrus

strong to we from in at channel a correlated our Absolutely. consumer level a we Look, feel level. are always space, add positioning good motivated but retail and fashion inventories, about perspective floor both is our also very

most So is estate. and go some to real estate adding if of the of to see the penetrated you part real the in way broadest our we that markets were highest into you're surprising not going assortment by grow

the strategy of part that So hasn't changed.

as we'll gain in the category. incremental will that fixtures the said, share Traeger continue Depot also We space, add and islands the quarter, and third in in to we of we will drive share believe Home of -- as business I

Operator

[Operator Instructions] Thank you, everyone.

no does you conclude Therefore, We Thank this further questions. today's joining. have all for conference call.

now disconnect lines. may You your

Traeger (COOK) 10 May 232023 Q1 Earnings call transcript