WEBR - Earnings call transcript Q3 2021

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Operator

Hello and welcome to the Weber Inc.

Third Quarter 2021 Earnings Conference Call. My name is Charlie and I will be coordinating your call today. [Operator Instructions] I will now hand you over to your host, Brian Eichenlaub, to begin. Brian, please go ahead.

Brian Eichenlaub

you earnings us call. thank third for and XXXX quarter morning, for today joining our Good Financial I’m our and Chief Chief this Executive joined morning Officer; Bill by Horton, Chris Scherzinger, Officer. our statements disclaimer. start our I’ll with forward-looking

for As you’re made from to performance statements aware those results projected. forward-looking actual materially Weber’s as statements, today, are be future such certain projections different

which COVID-XX archived our the pandemic, For are are particular crisis, filings, our so public and at to differ, please on days for supporting further of Relations severity information impacts refer Company’s SEC and predict. to the concerning on note, of our factors SEC and available that A earnings recording filing, website. least XX could when the all the of and Investor length difficult today’s of cause Weber’s current business be economic website. results will to is release and XX-Q This webcast the documents during

measures. certain today, call the the financial During also Company discuss non-GAAP may

For over at a website the filings. I’d been turn Company’s to the Company’s Please reconciliation on be posted on the call which like reporting. measures earnings found now, announcement, Company’s the SEC of and has to can these investors@weber.com Chris. And refer to to GAAP

Chris Scherzinger

to everyone. to want to Weber’s this Hello, welcome excited be company. morning. I’m you a as first you with And public I earnings call

our the fans public this customer here and very for service their and conversation thanking We fiscal wouldn’t quarter our having best for on results be this this delivering a IPO very your third our many founding like company outstanding the IPO in for to comment team a process. first Partners Weber for to our our by as XX-year and quarter, the around I moment during not opportunities. commitment members future and world. to work over making accessories, remarkable years I’d report the so we’re proud and the grills and fiscal their capstone start history, a it’s so support Today, Bill the all a also third their to record quarter our as like thank company, certainly Before even launching family, our Weber company. hard public represents today year, pad I’d more to BDT world quarter, and around were for the best but extremely efforts. Stephens Capital The

Our full year September ended XXth.

our XX%. our the And detail. XXXX, will million. XX% the third of So, $XXX in year, quarter the billion. sales third fiscal a a up basis summary, Bill record compared quarter same through our XXth. of this period net June sales the But go this in third were On quarter the year fifth straight represent This reaching more last were in net quarter quarter’s or year-to-date results the up to fiscal end quarter, quarter $XXX entire were record $X.X million, in to sales marks sales. XX% versus

the leading with and region Americas, quarter in XX%; up around the significant emerging growth up the charge, up Pacific, every the several For and markets world. strong Countries Nordics quarter, Asia the most rates, XX%; Canada, EMEA experienced the UK, X%. experiencing growth were the the

footprint, inbound or development, was particularly and growth quarterly unique headwinds, of rising platforms, delivered XX.X% while us investments X.X% new fund EBITDA our geographic sales for inflation in sales. future costs our when new our multi-continent digital also or Weber strengths and challenges. manufacturing These for Chicago, net as and earnings as reported here improvement allowing XXXX, proactive product early plant For well net margin EBITDA expansion. marketing strong in management, reliable is and pricing attributable earnings, income million shareholders, to freight to was adjusted million with U.S. gross $XX distribution, the technology $XXX of in and our commodity performance are mix net and initiatives, foresaw like Despite

each of global grabbing the you introducing to want model, global Unlike few to we cooking share describing are the grilling I and to world, in over Weber a outdoor two market player around in the half number a outdoor For Weber of two And unique markets presence, those brand. it’s that fandom. Weber cooking spend with reinforcing selling is the and XX approximately the different it’s the a only who Weber global our just category, outside key new the this outdoor globally, business is countries wide global number is outstanding revenue U.S. the you player leader brands global truly are cooking margin market, minutes iconic companies, clear other in our performance. notably true business not and truly

base promoter score, installed an on countries. and of over across awareness, brand net have satisfaction We customer households those win We XX loyalty. million XX

which owners and of recommend XX% Weber families, globally owners. to fact, XX year, grill to to Weber Weber XX% around times more grills XX% average. brand on is other people a XX friends about In owners than

X social the about growing. followers, over X is million lead closest times that and have competitive We brand,

global an even billion Our & Frost estimated share leadership cooking the position leadership our per to and strong greater category us momentum outdoor TAM of Sullivan. $XX capture

holds the globally grill grilling that you inventors. to electric, We in all and a and point Weber across XXXX you segments preference our or center, gives access a around for Summit and pending want Smokey for live, price growth Having of brand $XX Joe to the Weber is in over consumers gas all and is opportunity In to markets for share and product modern electric, is ranging $X,XXX smart grill market all cooking an plays Weber portables XXXX, all years, there broadly. patents have. us matter fuel a no outdoor may recent globally. given gas and charcoal for Weber accessories. pellets key in have what in the everyone, where charcoal, to invented X,XXX pellets, inventions Today, you patents or only company grilling wood world. segments what where within grilling The a the gas, from addition, is in product category: innovate and category the Weber smokers, in

a Show of strategic invent year, earlier platform And for Connected June a is Best So, in also Oven DNA. couple Test Weber, Kitchen. for and only invention Home the America’s to our inventors bring of with award Connect, the community driver this growth built share revenue that results. just a Products quarter it’s Consumer key partnered added to And from it’s third last owners Life see platform market as for of to that we Smart more not Oven June grilling The our when our worldwide. family. XXX% growth and acquired Best into of of We smart invention years attitude our ago June us you largest successful We been we in fans won won year. Electronics Award technology the Weber XXXX,

I’ll disruptive Before expand second, direct-to-consumer growth update to QX our execute want fifth and and these priorities: numbers, to results and revenue Bill into and products; accelerate continue expand frame customers those deeply five the consumer strategic an strategic more In dive emerging fourth third, against e-commerce introduce our streams; operating quarters operational to geographies; First, I initiatives. value-creating on to priorities. key to growth finally, to against to business; new and our in five to progress provide come, years

been the disruptive as Spirit gas EX Traveler in of Weber is grill well for and well This extremely up X.X the grill X smart First Genesis new averaging product lines, we tailgating. camping stars consumer as launches ratings. year, received, launched have innovation. EX Both and out portable

Housekeeping; can Gas Best we enhancements smart platform, XXXX launch. Best our is and Weber for Connect Stone Manual. Grill by to the Overall Food We on second key SmokeFire the Smart wood Best EX grill, several smart Travel which upgraded and the and SmokeFire new embedded a both, Best watched Traveler grill smart available And also Connect Magazine Wheels gas Rolling the Network’s smart from for News. several turn XXXX from Portable Best any just Grill Grill into by grills. EX Grill awards, with by grilling into device also grills pellet rewarded hub for grill the on Grill The Weber The standalone NBC won generation that Best XXXX, Grill Wired recently New Good and the won And

excited very innovations. We’re about the response our to XXXX marketplace

social in to video same connected XX% up sales Increased general strategy of Weber growth and influencer across is our includes year-to-date grill investment accelerate key with academies. contributed versus and second strong has media, growth, period media gains Weber.com last stores revenue Our TV, Weber.com XXXX, been weber.com programming, and and specifically. online network sales growth and well year. search, e-commerce the as which in global to as direct-to-consumer

drive our expanding Best experience. likes results. From new growth who retail and Tire, more to invest completely we incremental Canadian retail market partners stores other continue million priority, see consumer Weber, in base continue revenue strategic customers $XXX to to that customer we streams, were to retail and strong third over XXXX, added at continue Our and new we revenue XXXX also REI, continued our the from We’ve to access in the to in outpace well. growth XXXX globally, as also of Buy, their new and internationally, Weber Costco partners, consumers Sodimac points offering to core in

globally. of deepening our with academies, we presence is here emerging strategy our TAM have markets underdeveloped a of categories. which but growth now key list high are retail XXX market and fourth A and in Our stores relatively short Weber expanding lever development key grill geographies,

you’ll initiatives. We is Fifth around to have value-creating as shortly, strategy seen hear and and disproportional in Bill growth continue operational outlets XXXX, our from these in we finally expand.

improvement are continues our delivering Sell as logistics initiatives, commodity be through strategy what significant a environment. to very Make on margin progress We our against challenging We and even Where and teams manage global making

record. new U.S. output During our more in year, setting record facility, same last we the period a XX% output productivity set QX, produced a versus which manufacturing

where on made demands green-certified addition, speed new Europe our In a we’ve startup. and track provide are of we new fall facility production progress This our market. to manufacturing customer our a us cost-reduction will important in to in in responsiveness great EMEA facility construction

strong very in ability growth strategic priorities and performance. overall, the being with our progress happy sales So we’re results, made convert to into both and margin our

Melinda over financial you pass the review to Board to the that, quarter new Bill It’s now Foods I’ll With to Over Weber third Magesvaran to in have team. members, two Rich Gamble. & the Suranjan CFO, like and it Board, steps great Non-executive recognize been years, our of Rainko. I Finally, it would over like and valuable role. Kelly many She’s recently before Weber into of fantastic And for I to appointed Board welcome she a Bill, hand Chair to member our to Chair and from Procter Rich you I’d now Horton, from our on Bill. results.

Bill Horton

Thanks, Chris, everyone. and good morning,

into get I to share I Before wanted we’ll every financial some follow guidelines we quarter. as our summarize the details, results

three for which report consists results We all which and EMEA, our Americas, and lines APAC, the operating Africa; throughout will we includes Asia. Middle by Australia, Zealand us up primary includes U.S., balance Canada which of the the and the in operate and regions: Latin our New the which Europe, segment, of East of America; as countries

a of As both and our consolidated financials on representation also of a operating disclose quarter, we we a reminder, with GAAP reporting Along we non-GAAP reporting business believe better will Weber non-GAAP and segments. underlying every results present several our metrics a basis. the that operating financial will results our the provide GAAP

our in out results transformation that we call and in such our nonrecurring business costs and especially transformation public other XXXX. As in our were costs, costs detail non-cash earnings compensation exclude as filings, COVID-XX release and costs impactful stock-based out, we non-GAAP operational

speak income adjusted and operations, reporting income primary adjusted we’ll Weber metrics be business, net EBITDA gross net adjusted sales, will margin, operating the cash And consolidated be metrics operations, our and income, the to income EBITDA. For flow. GAAP net will from non-GAAP from

discuss sales other level, reporting For five operations. to walk income status we strategic with will our each measures, and against we that times, growth net in from an a stakeholders provide operating public GAAP non-GAAP our updates metrics these report from priorities. will we At segment adjusted At our will of key provide also non-GAAP filings.

XXXX. and for quarterly Finally, time call, we’ll guidance XXXX adjusted with first will as outlook sales net the be with fiscal a and we first then public fiscal updated earnings be November to EBITDA. company intend providing our provide year our fiscal in we’ll Today every year, follow-up guidance for for

our Now, I’d like to share from financials. by our third our year-to-date results followed financial quarter,

straight quarter from the year-over-year For quarterly a XX% third $XXX quarter, quarter, sales the of the third XX% versus net prior in increased and to up $XXX setting million sales XXXX, fifth year million record.

$XX $XX strong Europe excluding Third the The which our operating growth Americas euro, the up plus business lift APAC. impact accounted Canadian the was sales dollar up third for represents and X% and up demand, primarily impact broad-based was growth, foreign Aussie exchange or in quarter. quarter Core million sales consumer exchange, all driven dollar, of favorable of of Net contributed growth the in segments EMEA or X%, growth quarter across rates, by year-over-year. particularly XX%. and the XX% million XX% with in APAC

in Turning was quarter. advance or to represented X% well exceptionally for from in the performance the results. in as results to the the quarter. up in million XX% Americas, following first of Of from half exceptionally net demand the $X first This Every rates, and exchange customer worked execution the growth in business XX% versus sales $XX our of year we the positive resulting us. supply and $XXX on million region growth put strong normalize consumer which XXXX Canada’s QX, in of line, as where a ourselves in or prior strong, XXXX. growth, million million continued XX% such year-to-date $XXX win third third Bottom third-quarter favorable to in plus in to country net this half to Tire increased strong new core during quarter focus increase. customer Europe, XX%, Canadian the proactively million increased began and year the to strong acquisition advance Sales selling year-on-year. into has growth. showed by meet of foreign prior season, growth driven Overall, up early million Canadian and $XXX to fiscal In continued the sales position of was quarter deliver chain season, were solid the primarily represented sales $XXX dollar, X% X% note,

Norway, million the or However, euro, the Finland, XX% our million countries regional Nordic in came $XX the primarily foreign Denmark, provided the Core Sweden increase, lift include exchange, accounted which strongest results a all that and growth or a from UK overall the outpaced rate. XX% quarter. and growth for a favorable $XX and year-over-year

or quarter were Finally, our $X and Core Australia million increased XX%, the APAC foreign up $X sales a region net strong and continue also New the to Weber completed store Australian and or $XX XX% in Zealand prior lift. Weber a $XX exchange, from sales as million million to quarter. sales. contributed benefit year million XX% from primarily academies dollar, grill

five count Zealand Weber This quarter, another Australia New store we stores, bringing and in XX. added our to

to and including And quarter. operating Operating the the year, primarily driven the by results. million outlined or prior low investments interest XX.X% gross cash to compared driven million to strong trends of XX% in to drive when and inventory volumes flow growth quarter QX year-over-year first income increased priorities related expense, on the expectations current net recent income primarily as or of development and or last inventories million through margin Now, the operating $XXX higher of XXXX. the EBITDA would increase margin $XXX by cash million million non-cash POS Inc. the partially Consolidated I’d costs. impact net future declined key net was the year, credit combined there sales by $XX offset levels other our inventory to unit-based $XXX to the XX.X% to sales year QX, in third anticipated profit the margin The of mid performance $XX net sales operating year-over-year SG&A and methodology a during advertising, quarter, strong Life pandemic same in was quarter. it costs flow our to year-over-year Net last benefits losses, reserves gross earlier compared against from relates normalize. a to in acquisition income to driven million sales $XX increased quarter to of result or primarily QX Weber’s IPO. year the no by $XXX million shifting sales is by it’s confident sales basis-point million stages and by spending, that levels fiscal of marketing compensation results operating segment; net consistent of $XX shift and XX% low was transition and to XX% net expense from from financial the margin during June was With timing This in partially a quarter. the highest our valuation expense XX.X% Lower early realized $XX the with of quarter. actions to million to with net were trade to year like tax driven best income changes compared late $XX for the higher in million offset by from so increased extremely January. June carry-forwards our transaction a of improvement gross from for million XX.X% the are driven net reduced prior the EMEA, favorable million driven XXX prior the but and of $XX to decrease the cost quarter million, our in Chris. strong primarily research by declined strategic growth, drove be The mix in anticipated results distribution history. In Adjusted QX full to Life R&D quarter. which compensation increased $XX The dropped charges by down inflation; XXXX be period will quarter. benefit X% had in pricing levels, started offsetting We inventories. primarily prior year in the in now continued primarily $XXX one-time towards non-cash COVID-XX to of in Adjusted release

to million, last from represented year-to-date growth $XX results, prior Core versus year-to-date year, Now, $X.XXX $X.XXX sales period. fiscal our fiscal $XXX net turning million. exchange XX% increased foreign for billion increase in XX% billion to a and the accounted

the see towards period XX% year. up with to direct-to-consumer continue sales key growth nine-month our versus last strategic We progress priorities same

consistently net with In year-to-date same APAC XX% EMEA were revenues, up total the XX%, XX% XX%. On operating X% all the addition, growth year, across sales XX% is up of representing of versus year. our basis, segments, geographies Americas period up up from emerging last last up a strong and

For net the the increase sales increase. in to All prior exchange year. a represented at or versus channels increased million region, XX% $XXX weber.com sales million XX% XX% $XXX the prior revenue million growth to Americas, growth sales of with million year. $XXX deliver while strong overall from Core outpacing the increase $X contributed continue online year-on-year, a the up year-over-year foreign

EMEA exchange $XXX products year-over-year Weber increased prior to strong impacted the year-to-date. region $XXX of increase. net for all outdoor $XX represented across sales country delivered in growth consumer foreign Our year. sales XX% million million, million $XXX XX%, million has cooking up Strong the Core demand while by from sales and was every Europe countries, comps

while increased $XX $XX to Australia year-to-date the year. by region, by million net of $XX the represented million XX% growth. prior million APAC driven million or foreign and growth $XXX Core primarily a For New represented Zealand, the exchange was in from increase sales XX%

XX.X% net EBITDA priorities $XXX Adjusted my million for Adjusted increased measures. third million for $XXX prepared driven performance XX% net advertising, margin XX% primarily results brand all the year. driven profit The basis, in of the period, a relates again, or R&D. Turning and to year-over-year by in the like cash $XX no million of and valuation drove our was of sales results net shifting non-cash increased would gross increase the to key XX% to offset I strong P&L. million compared the investments XXXX top-line This gross year-to-date towards providing million was inventories. from and by Lower XXXX of compared tax action were Life I in was FX Weber initiatives $XXX earlier, million the full $XXX Clearly, compensation $XX year-over-year net compensation mix net changes our down business, prior million from growth. expense, million NOL to year-to-date expectations income $XXX million strong to strategic financial gross the charges the to favorable record IPO. by support prior our of income XX.X% prior on costs growth The improvement. and to primarily by $XX fiscal year. to transaction by revenue consolidated issue driven recent driven marketing COVID-XX basis-point or June our to financial R&D declined in key of fiscal fiscal decrease in XX.X% We QX to $XX partially top-line the unit-based million, tax to or impact This year-to-date million result June the expansion offset as to favorable pricing now EMEA, increased basis-point XXX strong credit or XX.X% primarily months in margins driven quarter XXX net the improvement XX% anticipated movement. by up reduced a million nine gross prior period. discussed by Operating of quarter $XXX a driven five remarks sales year. expense sales for from so first throughout of margin sales key to wrap non-cash Net financial were inflation, growth by to of growth and flow the $XX to fiscal year methodology income our timing by $XXX partially compared guidance same increased and Life XXXX areas across nearly XXXX. offset like benefits primarily margin a cost was and by

chain XXXX, Adjusted chain tight successfully are this fiscal between is and and fiscal up is organization closing XXXX. we great against to and environment making supply QX ended the prior XX, report guidance When out and key that $XXX anticipate full at to million close strides prepared be our September year. the and billion will we provide world-class up year year with and versus We our also full navigate initiatives, billion, recurring comments. will we in XX% net to between fiscal demand. heightened million, year operations will time outlook, consumer supply to XX% entire provide to our XXXX $XXX EBITDA to and we that year the versus our our and growth XXXX plan. leveraging of EPS I dividend financials our our $X.XX $X.XX detail time organization our back now for fiscal expected sales turn XX% Chris with Our it XX% out

Chris Scherzinger

members customers And In community is supplying satisfying all of am we groundbreaking and excited challenges I inventing new that and public fans the forward would that of to for Weber to process. let our of today. company. the our cooking ahead passion across that still We segments on again all extremely the offices world like in won’t of shareholders many us around in up thank quarter joining closing, in look a redefine Weber us facilities lie for results I And opportunities for not. Weber delivering loyal category. our and and the as the Bill. team outdoor the front could adding continue to of thank I to our Thanks, when products like outstanding for our new would during the others lockdowns to

up Now, the I’d questions. like open call for to

Operator

Bank [Operator Instructions] comes first Our America. question Robby of of from Ohmes

go open. is line Please Your ahead.

Robby Ohmes

that you just expectations an a over playing in freight the to you also in Bill, guys you are change you pressures? on question And of any carries some I maybe then, in quarter gross in Great ask And wanted thoughts now to into pressures? commodity update on to quarter. about key gross that and seeing margin us embedded increases cost next mitigate Listen, and anything year the are how these terms and guidance, the guidance, was -- of maybe but pressures? I think the some give us margin can how are what how price out and think gave

Bill Horton

not out protected of our actuals in this in earlier are that the positions the us QX, markets certainly impacting that’s pricing We Yes, in most year-to-date process what certainly QX are crack not we’ve hedge seeing there. trends you Robby, the surprises, take we are and major definitely and he’s Chris the through shared spot realized impact year. our no now fiscal during but and these real with seeing at some the if commodity commodity although QX first from and have IPO we to a movement what contracts we comments. jump are Generally, seeing it additional I’ll extent and supplier it are we historically. that’s Generally, the in maybe consistent inbound managing can and freight got inflationary as

commodity, in into is depending rates, cases late our -- last higher guidance, XX% are now, from However, you’ve up In now et QX most cetera. exposure what providing generally market some [ph] XX% the now between on seen QX, consistent are companies at reporting which year. we earnings, with versus and

all to plans across our certainly being a And new fully these pricing in impact finalized dollar covering We actions by challenges are days. of back and this starting inflationary we deployed markets. managed These year. like have were have that we We QX in early this earlier on inflationary team. to historically. and cover QX managed through the aren’t through challenges with our basis We tariffs

what’s if follow-ups. pandemic. I competitive But I’ll wins ultimately, to with on So, we guess, wrap a continue to up focus you follow-up, and back come have are you us to the gain maybe going throughout helped

going the are when they where consumers ensuring supply for focus to and we ready to want We purchase. our on have

a in Chris alluded global our Weber and truly pricing with manufacturing our to well make XXXX. are sure that going footprint. chain consumers. value pricing we leverage, details holds as unmatched of Weber into methodical the We market. to, way say going that are to directionally our brand going guidance as manage would is every And call earnings our we And a supply I to give proactively pricing for in next for We’ll share deployment

Robby Ohmes

helpful. really That’s

for if is Just I a the that stronger would don’t like U.S. sounded why follow-up, maybe be? Chris, it quick inside right. outside that the case, I that and demand But, grills the than for is know heard U.S.

Chris Scherzinger

-- I it’s our of Well, I in all strong regions. there is think, Robby, think

we’ve think retail trends a sort are the point-of-sale both consistent overall as timing And across some market. positive it’s or standpoint well positive as seen an so, -- dynamics. a And of I demand. from there, There wholesale

And so, and freight, out COVID played in chain hits to ocean play challenges strange how regionally, and challenges, relative out parts the different some supply times. world how of how logistics have the the has different of of those played frankly of one oddities regionally, the it lockdowns even how container out

And example, an you had and give go containers. fiscal which a is January market and inbound QX, resurgence so, European also in through to the lockdowns issues, it’s -- a just transportation our tough the March, the to really relative

QX results that outpaced. And was COVID so, demand our you suppressed there the in really Europe little and logistics back where dynamic and a bounce by the in saw bit QX,

the incident in earlier year, Canal impacted remember, that happened really you Suez inbound. If European the that back

In And saw back so, standpoint, little which QX a had Americas, was in bit contrast, in QX. a that tremendous QX. behind we a bounce the lagging

the course you it’s year, as pretty over look of the balanced. so, And

issues lapping were business for in XX%, up by Asia Hemisphere because driven bushfire from is some which year growth due for Australia up XX%, and there, in our EMEA for Asia XXXX counter-seasonal, in XX%, Americas Pacific numbers up kind to year an enormous year-to-date it’s country. Pacific a of the Southern particularly depressed they Our for

And was surge in Australia. a really so, there big

based world, been generally So, speaking, across the on balanced fluctuations, these quarter-to-quarter factors. minus it’s macro

Operator

question Kate Sachs. next Our of comes McShane from Goldman

Your line Please ahead. go is open.

Kate McShane

My a question was I but for driver heard just that today, in much around think comments don’t you. know I the big prepared growth we future accessories. too is

of it more little around the performed accessories So, year? is you the your maybe during QX rest color outlook could a how give bit for what the and business,

Chris Scherzinger

Sure.

then Let me can. Bill, take that, and you

Sorry, go ahead.

Bill Horton

ahead. Go you go No, Chris. ahead,

Chris Scherzinger

really doing the business. to to our well. We’ve really maximize challenged I Well, say, the is that going of part business was teams accessories

Kate, mix, accessories they and part know, a put we line key lot of gross area a say, and conversations, the performing sales. like well. standpoint, growing I us. continue focus for place an you would We’ve accretive drive it’s from of a speaking our prior it’s those, so to margin basically grill in and from As in to that’s programs revenue generally business our are with

sales. so, grill in not it’s And sales line with our beating growing it’s grill but

in number we’ve So, of some areas. really seen good progress a

favorite One the is at is of rates. that attachment ones looking my

grill, a grill in has is growing purchase someone Weber XXXX get a our perhaps each tremendous in season of us at the sell we because algorithms time frame the for our Weber.com for increase actually we about And first with a programs environment, business something putting website rapidly, grill. redesigned there’s grill, spring time science, of the number drove a accessories a the weren’t been to put which our anytime XX it’s which grill. attached of inside the XX-point purchase place accessories but the associated a in And attachment place. our percentage-point back past. in of not sales -- we that so those rate And in in rocket for opportunity really present correlated grill So, to doing particular, accessories entire we website at to highly

retail really our seeing partners. been rates environment. at retail And nice driver that’s of attachment growth So, in are we as for our a also increase weber.com well

on it’s about than we’ve X% the years. so, of order in And higher seen probably past X% the to

that I’ll function a present we creating of us key growth are a accessories level coming going really on for to be an you base. and another our share excited There the driver forward. November users with the great on next to -- a accessories merchandising. where And call, outdoor be how taking user And grills. accessories that’s the adjacent year innovation in accessories grill Weber kitchen we is to effectively but function probably a so, for the the will of It’s

model that’s in stronger across we So, not mix higher around is a part presence Europe, just world, for our have a every a the going overall -- our opposed us of years accessories key of Weber particular, the forward. grill substantially growth where accessories big are more into coming stores in forward. growth academies, for model. as to that we dealer that’s it’s in a us, bringing platform are US. engine region been outside And and U.S. business of a U.S. for box of and a the And the In

Bill Horton

up kind our the We our with will ASPs The right, business, accessory year, balance we’re right last trend quarter only I’d point last to generally that, I’d of our on of versus add were XX% in got ASP. add line you -- the continue year, in if up are is certainly one to accessories. growing almost accessories the and in in QX. Kate, thing And it Chris

we are on alluded weber.com trade the certainly. up getting that that’s to So, helping Chris

really accessories. overall feel positive we we’re So, about seeing in what

Operator

Alexander question next comes JPMorgan. of Our from Megan

Your Please open. line ahead. is go

Megan Alexander

kind markets, any of you’re variant Can impact in to your any follow-up of whether question. you seeing Robby’s from or second is the question first U.S.? internationally My talk in trends Delta the regionally a about in POS

Chris Scherzinger

return in That’s around can where countries other lot so that of here the it’s around don’t we’ve cetera. is one. dramatic as other U.S., in In little if not -- are a we Australia our that although the of -- the although it dynamics lockdown more Asia of I market reopening, of as certainly some more here, varies happening, to it’s our pause a more slowdown and will, relatively behaviors, many vaccine reopening and kind vaccination parts that the policies, in of dramatic you low. little more like a a And a know rates even environment, regions probably the world, U.S., seen debates bit clearly Sure. one honestly a the obviously. seen more et a we’ve I dramatic of a in are of the of volatile take pullback. in see normal or because the

and sorry, Megan. world. statement region, entire varies -- that think And I really by it Wendy work So, there unilateral for is the would one not

way the first that mentioned said, at that continues as I it, all, looking strong. our data, be of before, are So, to point-of-sale we

kind in of is What would is line pullback. surge. And traditional a any lengthened expect the that seen a would seasonal to a I you a say dynamic in haven’t with we behaving see that normally see we business might so, more little bit the And season. grilling

for so, Hemisphere come it’s And dynamics. summer and counter-seasonal Northern the the of in us of the fall normal into with sort to out

would think to is last them. strong that -- that would are if What probably the in so continued is there of sustaining Delta. you a seen have -- attribute to There don’t I I coming and of number We of months, out pandemic. that know the I that couple are business attribute trends the

from with socialize sweet a as backyard for the bigger migration has consumers’ always houses, lifestyles. spot really wins is brand part you people. to place and particularly If a and an urban of entertaining where millennials of think suburban you for and and decades Weber. starting It purchasing a Traditionally, homeownership your and -- been backyard how integral that’s part of areas Weber becoming about a experience areas entertaining or decades,

for positive us. that’s so, And

to a light five if about and goes switch a flipped back week I days think remote think been everyone everywhere. you office hasn’t working, the also, there

grilling to kind extends five home, days on got Weber, to fair you’ve Even that’s full it’s think basis, I and just than you beneficial some if go-forward grilling it’s a generally expect opportunities. weekend category that more where if so, beneficial a pre-pandemic. And the a work-from-home lockdown week basically relative home, at by model a little XX% because hybrid your of a a at add to to Friday generally not

is of think a And that lingering we’re there’s normal but in I living to go-forward now. expect every is not really that’s variant, reason those the to sort it related a to basis. new there on upside So, Delta continue a sustaining and right related trends to that

Megan Alexander

That’s helpful. you. Thank really

are your maybe share, Just follow-up, can concern, this to your this seem do as like forward? more and it concerns supply compare related, a And but how going fill but of see It a take demand? just peers? opportunity like inventory maybe the chain does to maybe position that’s ability some you doesn’t to an seems talk more cost you as about

Chris Scherzinger

Okay. Go ahead, Bill.

Bill Horton

I in you will, in jump going take just a levels was certainly. and you -- were We year low just comping I extremely given company, where and my surge the from if we as year. as a -- inventory last the the to levels can about Obviously, we period in really last are are good comping demand for Chris, inventory us comments, position. season, our feel start, mentioned

four the into So, to our about inventory season three we head feel months our real as in we good where peak lie. about next positions

is out XX averages constraints to supply times as generally We’re feel to we to obviously I XX the our days But, marketplace. transit manage XX seeing really the have we’re to historical through in days. closer confident in to this. chain team mentioned, What of moved XX seeing from now

was example, back believe XX% last to reliability, if in versus, XX%. carrier the which you seeing are I for year, go July We

Beach in Long seeing a challenges the we’re you’ve as read supply certainly example, that’s the Port, in So, about chain. really media. bottleneck, the for one is

through managing we’re it. However,

what that for ready our supply do, we is we are. the feel to our that? team that issues any needs. which And supplying we customers’ to peak with customers add had as globally, our to pressed ultimately we you haven’t good season ensure did get Chris, our We and anything to consumers got and about that’s want our is where

Chris Scherzinger

-- our well at the put execute I give is we am I This market into thing team been taking many winning, in-stocks in and you kind on their And and I The working the we’re sorry. matter. the outperforming performance. well I’m thankful speaking, what share add would up we’ve strategies -- my for respects. place that’s in stepped in communicating would think say, retail. block based Yes. lightly. I rodeo. leading think, first feel Yes, I does data in us the there well. globally challenges Generally leg earlier. to proud a that before. run We’ve great is think team around I some is, on not of also and doing we’ve and Like, got taken of times a competitors these I be We’ve the on our in And past. team. of that’s to like ability And the these to I us have, not

Sell. we strategy many called production do that strategic I’ve Make talked of have intent a Where to And you about, to our We maybe that’s our demand. so, a get about, And to you all of closer

production so, X.X at for in years here our maximize footprint. to And That’s my invested U.S. really we’ve unique substantially Weber Weber.

at tied footprint, will to that you manufacturing know, inventory speak. and -- stuck these in only when we’re well company open as and water, so I grilling the getting us it U.S. open that helps up transportation global things down being in with a are has trending in challenges of is that lot just and officially Europe size the on ports comes a We’re there. a couple really adding, And we grand footprint manufacturing weeks. to opening think -- a And boats

a of it’s out unlock. and some and big have we’ll European And manufacturing European as that’s a those us, a times so, of lead go-forward going to exciting will and for footprint the basis, on opportunity a really delays well, that take business be

and demand. robust in much for to going the volatile. us go. point. dramatically and think products customer us. to and probably well investment for be They’ll be the where XX to tied serving the to it’s to on advantage sort of days. for up that terms capital the bring up a like what you of out we’ve When have cut by that that you XX to days, in and dynamic think invested They’re you serve business, and But, we the you that’s dynamics It’s come in -- XX about these play more And two-thirds responsive that’s it that’s a life production ready we’ll to future. It’s Europe, them. now local big working as water If normally strategic in will allows

Operator

The of next question Capital. comes from Siegel BMO Simeon

open. Please ahead. is line Your go

Simeon Siegel

some Thanks. guys. Hey Chris, about you quarter Good again. as connect the interesting Congrats data usage. consumer Great to public mentioned company. on a first points morning.

quarter et on to stats, cetera. you you first talked with people help you fourth average so if the using usage forward? engaged you frequently regional revenue You how those been but get grills, Can within can, track customers grill, see going how guide much. trending? just how more they’ve that kind And on for increasingly the revenues thinking you’re touch Thanks embedded you about the how the technology any guys Bill, Maybe then, gave? those of how about to talk

Chris Scherzinger

the evolving. I’ll first So, take one, Simeon. It’s

for As we’ve those way it investment behind think I smart a Weber dynamic. talked who about platform, Connect. effectively a That’s lot The before, we know, our about put is, it’s technology of don’t creates like grilling that Waze.

that and positive a And We’ve that. gives situation-specific so, reacts the feedback cook a temperatures conditions cloud. guidance or response seen in have you to personal a it grill throughout to gives we food changes or types really to you in algorithms real-time tied

app when are basis we what cook-to-cook we accessories success seen have mentioned that just the but some driven the future fact, consumers maybe I And In remarks we’ve on year from a which Connect cooking smart will will us a that of in show revenue a that to of growth standpoint. data services the embedded a the we for this penetration where my and from scale the even get higher, through the that with brand We’ve Weber growing experience. they in line going insights them. the smart through get as what unmet in to in we drive day-to-day, into with desires a connection that’s key build amount huge be prepared behind Simeon, of Weber grills. on that people also brand cook not But, particular, that into an us and, Connect week-to-week, and embedded engagement or relative in grills, may expand that their household forward. be And are grills and like and -- that EX Spirit the Weber platform

product back technology household going it that create and for development to our service So, back information us marketing give talking even value spin but and it’s about, of terms everything our new Connect the the richness our of does spin forward. you’re still the of to consumers development for us early in days penetration solutions us allows back

us an We So, positive, and starting. the companies. that platform engine sort leading how Weber group Weber will that’s and Connect was of an But, I’m going early in consumer tremendously beyond have the measure do on see getting ways, consumer build family. wired of and analytics as the the in and revved my up forward. consumer at line a background that’s particularly trends EX from entire It’s of do you number QX insights part on we read

And interesting. there trends that really value the do of a And I are number data. are so, really

has versus XX% new Weber purchase the checkpoint Just over key attract of new higher future. we’ve to when products millennials we’ll after that the our outlined them sell we that go in and that Connect research ways with in when grill the is frequencies see rises embedded. technology embedded will hit technology they accelerate into back a technology millennials same Millennials’ Weber what and found innovation without category. the both one disruptive grill interest quickly, Connect embedded, purchase And the grill strategies and on we to show

it grilling that to and it. us And great solution so, of a front that’s technology broad bring to really array this And really accelerator are of a who tremendous expect to literally consumers there’s desire experience. in wired

deep beyond creates tech I the and goes series tech’s the that in it sake products from with for into really the association technology is time. think in grounded but of value and it’s and product, we’ve of the had the And create market purchases that a positive. a that over does initial platform Weber so, feedback And really insight the consumer to not bond purchase interactions

And behaviors the that consumers between grills actual so, on I that’s and where being purchased. we’ve dots research our think with connected are piece a the

So, I I of question? thinking to basis insight right Bill And don’t anything think want second day-in, know about the you there’s that’s on before probably I’m Simeon, that now. that, day-out your a takes the key build if half on

Simeon Siegel

No. That you. was perfect. Thank

Bill Horton

QX. for question quarter the hit I’ll Yes,

that strong in XX% was up So, our just last really reminder, more QX than a year. year we’re last comping as QX a

and was our our If between of business positive QX feel is to business generally XX% normally of our XX% of the our QX, year, year, you still somewhere we the a Weber XX% happens in XXXX, our think again fiscal latest business QX. our to XX% just is our going really QX. historically, It’s so still back That’s This outlook. coming Last about where year, represent business across year. in. strong really our in

our at So, still highest two-year higher than then, when basis, be kind of much historical And trend. we going to stack it’s a still our look quarter.

to be going is close XX%. QX for stack two-year our So, to

So, When it think the level to generally we the a it I spread it’s was or strong -- it’s regions. based region question level spread, really region, again hear quarter. comes around across

shipments with exception QX than seeing particular not APAC region the through we’re maybe the we’re final through in So, the stronger although managing any other, and of significantly slightly, forecast here. managing

make that regions. it’s So, generally, but to growth going Does sense? -- essentially flat it’s across comparatively be

Simeon Siegel

guys. Best for the the lot, luck a rest Thanks Yes. of of year.

Bill Horton

Thank you.

Operator

question comes Chris Carey from Wells Next Securities. of Fargo

Please Your line is go ahead. open.

Chris Carey

getting months, replacement have how of of get kind just think just so any over expand I on the clarify out we to worse, how commodities quick next are? as past are for an call. are getting you’ll just about follow-up inflation Is and concept the expect a the or commentary feel just occurred is year? these and overall they further as that of thinking on good of at Robby’s what’s about think in the then, general me, looking of you’re question to or far about how households, right grilling where an wanted that you mix the is at element, for kind way in that maybe on purchases purchases versus this of commodities and much. you the much worse, you over offsets as you beginning element, old that couple uptick grill could into freight new it? grill be And if been Maybe play pricing so grills Thanks

Bill Horton

first and Chris, in Yes. the I the of question, your can you can Chris, so on maybe part second one. take jump

getting months, an it to we’ve definitely three would seen I primarily the freight. is inbound worse? in So, four spike say, increased last inflation,

through You’ve lanes. continued our not March, just is that’s talking heard but second generally CPGs, premium expect least from competitors expedited freight also only higher at about we them about real. the use quarter, which everybody’s with that it And continue our of to

to So, our cost increase of COGS. just between X% historically last the for months to perspective, to three and generally of seen X% We’ve closer inbound freight XX% represents that of over XX% our goods.

like going to it. carrier our persist, are So, talk is quarter than said real, certainly, with continued about as freight and is use providers. least through if this We it’s there, not with second But, I pools access premium eight doing what to around of planning we it expedited lanes. out supply are we’re it? going at chain higher our our We’ve doubled this more

are we got with to this. strategy a deal expanding. So, We’ve essentially

to earlier. we’re that and to, make one, strategies able sure the mentioned customers these protect I get Weber grill in-season to -- our executing We movement. that are are we number that So, Again, they need. demand volume want

done continue past. strategy. in our we’ll So, the issues these through like to manage that’s And we’ve

comment? to want you do Scherzinger, Chris So,

Chris Scherzinger

supplier don’t of effort I good that having and hit relative base don’t progress the do challenges. into on with to making -- facing a pass want that try productivity lot contracts years to at we’re buck. and hit or we successful don’t and personally, number advantageous so partnering think initiatives, with over I I generally lightly, put don’t a into of And least, the bit. a costing just marketplace. think, now. we’ve And you we our take -- to speaking, the it pricing before rates it, get front we’re in lock I and been I we And and --

brand We that of segment lives and the of premium generally we in that a a are speaking in. play segments categories each

$XX, get the to all a Gas -- a way up Smokey a grill Weber Joe Center for $X,XXX. can Summit is Grilling You Weber Weber is

to this the we Weber environment, assortment. face available that us wide the a we’re points. you the of price range of see nice So, goods tools has pricing taking play inflationary consumer a of where to talking in we about, And like one in headwinds kind manufacturers action an most full really that one, expect across of have is it’s would some

a But, because to of to terms go how And so, range do a ourselves we a market. particular structurally advantage we’re price offerings the equity brand perception I in all net that we we not we the at premium pricing the in going are that U.S. we whole have brand market think of brand gives we have the highest an promoter consumer’s not price power around have points. of out score And world. playing in just us are because in but and brand awareness, and and and markets

because of ability road even has lever pricing to see rubber reason the the XXXX, part coming adjusted going and early, we we meets and QX in season, in the included that. business and XXXX certain QX took And that a pricing to when our pull, into business was we’ve to our execute reason really some effective. shown and so, and the be going is do that you for markets EBITDA performance this And performance the margin have saw for action that gross see into in positive you we that -- the

And other with that in our collaborative navigate of of mind do side the But part entrants. repurchase do you to Chris that And grill kind have if around the new have don’t a at any information and or volume will our do that want repeats would and anticipate power to will, going hit new these I so, really of partners in to our that we we category consumer being Then, I question, sourcing. navigate with toolset retail way. had headwinds we forward. the replenishments, grills we around have versus existing that you volume that. then,

So, annual honestly, at we year basis. the of do the at an that on end look

with so, And that’s on that’s probably going insights our team right work now.

me next think one I interesting grill with for we’ve if check this can three that of I’ll is time -- have one. last the we let a you But or seen But, in take do So, year, in particularly on we’ll so, talk. over trends we lines. our information them that and four premium homework surge months, the

which really the it’s up segment. gas It’s gas but the in category the fiscal particularly is seen, is have a on this we so, year a double And way growing category. substantially basis, up -- category year-to-date by interesting, the a Weber more than

is toward about In premium wins. some Weber where fact, up supply, gas a movement grills points this think data. based NPD to I our that And something one, which market on our year, in in obviously to, like market share the is ability testament X.X talked earlier; the we but two, category of the

few And grill. so, demand the grills, our our we have That’s which Summit purchase a over would typically premium existing months. but Genesis a a seen line and that is surge indicate first dynamic grills of not last in trade-off a for our for an a grill or gas big replacement

Operator

Arpiné Kocharyan of UBS. [Operator comes Instructions] question Our next from

is line Please open. go ahead. Your

Arpiné Kocharyan

inventory and bit any retail talk see demand drivers into looking what you back little then, a you much what fiscal how demand. to to about your help possible the morning. quarter XXXX just are and perhaps point, partners of the this at that really you, earlier, looks question how to go would at the year, understand categories? good and to be insight how And Could at at trying inventory situation of regardless replenishment sales compares to like I’m the inventory next end the pre-pandemic retail could it quantify levels? Thank

Bill Horton

our Chris, Arpiné, trade maybe markets. all trade in obviously I’ll the take norms. question. I generally the of unique our three Generally, And markets, would the But line question. on inventories you they first then, comment maybe inventory historical say, are are primary with part three in can

at retailer So, the inventory time the just fulfilling during with with say, was would everybody we’re I last issues, aligning supply challenged our the strategies, than pandemic, this much of year and kind were et cetera. healthier where of they demand peak

entering about feel we good the really year. So,

QX an I season. into off partners their example, strong then the generally, lot drove in QX to So, say inventories selling as earlier, shape were as think good and which well the to would in sure with time That’s, trade with strong paid Americas channel QX for our alluded POS. in-stocks, make going Chris spent we collaborating of I that a really

good -- you always the So, really say, I inventory. sit both manage about where there’s if APAC Europe, we’ve certainly feel and Americas, the in mix, would we will. overall, in trade challenges we to But,

head demands. fulfill season, be able we into the As consumers’ we’ll to

Arpiné Kocharyan

Would say the Great. you levels…

Chris Scherzinger

Yes.

for and If ahead his go shoot a Bill, you have way. follow-up it

Arpiné Kocharyan

say you not anything? or of inventory levels? that channel words, pre-pandemic a looking really star Would Yes. at kind In you to are at are comparable levels quarter-end other

Bill Horton

I exactly how put better we That’s That’s myself. have view it it. correct. couldn’t

it. exactly But we takes that’s within that’s how generally, So, it viewing exactly and we view in of are all puts markets. some overall, There’s how categories. our

Chris Scherzinger

And positive of didn’t to standpoint. or the one a this then, remarkable will dynamics I is earlier, on of of this XXXX. the I of the age me question that we I jump that of out add and which is grilling wave really part coming we post-COVID Chris. coming first that earlier jump dynamics around I’ll sort your who COVID from are the would see let there. on relative mention millennials of in in the mentioned the sustain think -- the some tailwinds

with there is -- get a a I of turn is there little it there we but by million you are, US. in think which XX is factor global XX of to XX the look the our U.S. XX a So, years. of at the to next are what number, soundbite, half outside the can of two soundbite course, business multiply the in that U.S., will millennials over this But,

part dynamic for consumers and coming brand historically orienting for a into been your a really home that’s more wave your where a of Weber backyard. your millennials life around to families’ for and sweet -- like a starting lives. so, traditionally there’s Weber plays And tidal spot really is the what And a introduction a place buying family, and of a home,

that and are one-year front coming XX prolonged a that’s us. tailwind. next tailwind, a excited about we That’s sizable. so, tailwind And it’s not of That’s in years

even and might the it think, boomer that ago. be I baby happened sizable more than fact, years In surge years

with growth Everything to and the what we’re in exciting partner is growth which and ways and the our to retailers new doing those drive positive customer our geographies, face all to base, our to disruptive products of an there, those our grilling then experiences, and drive emerging in in pillars. direct-to-consumer of with revenue deepen prepared consumers’ outlined four introduce remarks, and presence growth that’s I represent brand, that expand tailwinds in So, earlier interaction the our which with key is strategies, expand tailwind. innovate experiential to change

new be business. solutions results, our impact that Just a XXXX, to the consumers team that sure at that as when mantra my line I value-added only always a everything will our our bringing we happen to have impactful live which were will XXXX our think I brand and XXXX our an results and to they get and it. to a Weber, And we’re forefront burn our internally we to be with make category leader that do to that we QX the of “the And strategies drive ambition how to to to at we we is happen Weber as up impactful the consumer Weber they use And us, that’s is, to and of doesn’t here well. brand. put that category.” the

Operator

for any and further We the coming are are now time to out of the end we of call. questions,

for will hand closing I remarks. to team back over So, the any

Chris Scherzinger

for your time want everyone to today. just thank I

today And that is conversation, As but life exciting, are our bring not me the throughout bottom rise we well. top the very for the very in I the in growth of Weber excited team and talked line those QX up ability as face to our And the we’ve accomplished, see to the results. for that just great about Company. of about from many show so you I’m earlier, to mentioned challenges but also the on we up on proud initiatives what the line to results and heard

the by that So, with higher. the our conversations we delivering and Weber And you push shareholders we continuing of brand. forward right to promise future that are and it our doing on look we we feel are to

everyone. you, thank So,

Operator

you for call. concludes Thank today’s This joining.

now disconnect lines. may your You

Weber (WEBR) 15 Sep 212021 Q3 Earnings call transcript