WEBR - Earnings call transcript Q1 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning and welcome to today’s Weber Inc.

First Quarter 2022 Earnings Conference Call. My name is Jenna and I’ll be the Operator for today.

If you’d like to ask a question for the Q&A session, please press star followed by one on your telephone keypad, and if you change your mind, it’s star followed by two. I’ll now hand over to the team. begin. Please

Brian Eichenlaub

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

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

to filings, concerning differ, XX-Q on information For which factors our earnings cause results are website. refer that public please further SEC release could to and all available our filing, Company’s our the SEC of

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

earnings announcement, has on of days at and webcast Company’s on Weber’s A posted reconciliation investors.weber.com, at which website Relations measures archived the today’s of XX a filings. be will Company’s reporting, SEC these be the Company’s for website. found please recording in can GAAP been For the to refer Investor to least

I’d over to Chris. Now the to turn call like

Chris Scherzinger

you This touch themes everyone. major three quarter. morning, our and Brian, first on from good I’ll Thank morning

First season, acute new broader particularly is exciting strong third navigating progress in these the the proactively XXXX inflationary solid innovations into on growth and objectives face to XXXX season. with in for a momentum the and the is progress strategies, is five disruptive mentality; our track chain our and leading recently dynamics leadership sales performance, market our announced key product generally of challenges supply logistics our second and the in particularly on quarter;

of amid that strong We needs worked period Recall but about first Weber demand of restocking unprecedented represent for quarter talk QX show face year two-year out compounded the of annual results basis two-year sales calendar shelves about The prior rate a depleted first X% our XXXX, strong of we of $XXX the when generated in which the me and a XX%. COVID year’s of net team retailer year, quarter demand was stacked the let This products. million, fourth tirelessly decrease inventories summer, a from the to First on inventories performance. XX.X%. retailer sustaining our meet last saw up coming bare. the continued of fiscal growth customers healthier QX of were

with peak negatively first pressures As Weber believe These detail and for has and unfavorable led cost remainder organizations, been to to our environment quarters. and we outdoor persist industry, loss the operating we our an entire costly million. QX freight generational you and patterns our will commodity results impacted margins costs, quarter. material EBITDA has spoke last of you, more actions Adjusted challenging greater maintaining also results the impacts significant for shortly, to the as of we’re growth. investment in positive year. this future proactive financial while well drag Bill the will cover term near mitigate of become these the Since through $XX inbound quarter increases, first as on many taking seasonal low a financial challenges the do normal being Like timing seasonality our to and a the seeing extreme were foreign exchange volume quarter inflation and sales including QX know, and business we’re impacted believe headwind, cooking a by raw fiscal is We now off-season return order retailer historically movements.

challenging about very talk Second, navigating to how are we operating like this I’d environment.

Weber agility stronger and will and with which focused ever. we come leadership than last shared challenges they today’s intently that confident conditions eventually mindset, managing will, a out with I and logistics when on quarter, you normalize, As I’m are costs that

container value a industry, footprint, team we worldwide. leadership, and have the in cost innovation uniquely brand and Current strongest the a bringing diversified world-class our manufacturing actions have we We have times inflation, global consumers That success. we the will said, taking rates, even this in and significant pressures. at derail moment combat historic long are growth our XX and vision to not cannot inflationary term to

and implementing manufacturing, lines numerous to transportation cost negotiations tactics to operations and for improvement mix driving in manufacturing level, instruments. currency certain sourcing in supplier product the including and network, financial manage we’re shifting First, down, initiatives, both and management shifting different costs our mid-season activities our sites volume at driving transportation and commodity

address XXXX increase. just six months cost higher than inflationary increase key we the also second first in a when introduced to XXXX markets in ago pressures price we recently most the saw We order even took

third pricing yet these this actions to combined given to and see timing season. is partnerships power a pricing still impact our in expect to the a the that does on basis, second across great Weber customers requires have execute retail the the with quarters. global difficult relative the We of marketplace brand premium

value delivering and and our collaboratively. We our maximum to consumers our are business committed to to retail partners’ building business

to of leaps many the one challenges, defining keep the eye deliver key is pricing, thinking the me forward most key XXXX third exciting Weber, throwing many been the future toss we’re the on face will XXXX is today of and the and cycles one to and substantial to do we’ve season. back set economic being pulling always risk SG&A strategies I for reasons and generation the that which produce has these is on also making which expenses to impact offsets it at an final demand growth we’re areas strategies in In levers. our future that our XX it’s initiatives progress the for unprecedented create topic years inflation succeeded over growth shareholder redundant, take and in that before action of the characteristics of not addition Weber’s term value years great five to are DNA in In us. my in cost and consistently will plans Bill, long aggressively That come. past today’s of reductions the Combined, to good to three brings At for bad.

key life to moment from of these today they’re drive in me strategies to XXXX me focus growth so our this about coming how Weber. let in for all on date, five heard You’ve communications to

disruptive First really is that experience our products season, outdoor breakthrough for new and introducing products for new re-imagine consumers. announced In products. the we January, cooking the market XXXX

a grill unlock Genesis attachments Crafted, Genesis throwback and all-new heritage gas with to special Connect product Weber smart this including food back line, XXXX wood cooking new XXXX. and in invention XXth to of ware collection kitchen cool celebrate Weber on the lastly your of new a and of methods modern Our into accessories kitchen, to SmokeFire patio smart grills pretty our our Weber outdoor and retro discoveries a our addition built blown, stealth pellet anniversary in, unveiled grill, grill that transform new new later month, outdoor your multi-faceted full grilling be the

in flagship We on significant innovation are these fired the gas Genesis the up grilling our line, years. about most innovation products XX and

a more few [indiscernible] the single Here’s PUREBLU and pit, called and a technology oven, your how your to a time in of and food been current trade It instructions we’re and crafted that strong, one of a the to food heights. flat prep Early changes largest up Weber built-in outdoor fry and the that and well owners sunset rotisserie system a new start, Connect Weber experience. of grill and by forever, even ready move zone To monitoring phone step larger, that area, Weber lighting real plus maximum a interest to examples high Genesis. other taking grill, just has efficiency, consumers’ our grilling bar stir flame, new framework with on Vision heat a lesser cook owners on and turn best-in-class of ready cooking setting response built-in it’s sear the line grill piquing Weber burner delivers heat, as surface with new just a as quick top called for rundown consumer has on design proprietary storage grills step into a high Genesis in integrated a Night area, the ware, of after extremely Genesis. proprietary history dramatically pizza larger the the fuel experiences to to cooking

to revenue. key strategy and second The direct-to-consumer is accelerate ecommerce our

all and expansion regions strong and seven of the in stores and to bringing weber.com track showed new Weber first have in our performance count substantial QX, XX% grill launch in as in Our internationally initiatives markets sales, in all to We our strong opened well quarter QX. for total upgrades XXXX place global we’re stores Weber and business we social store across programming alone, representing XXX season. influencer academies site on as the new weber.com globally,

and retail consumer new revenue Third our is expanding base streams. customer

in in building all partnerships retailers the Canadian regions around and bring We Weber presence Amazon regions across life Costco brand the continue like successes retail to more. on Buy strong their Weber increased REI in can building and Tire and value the who We globally, many footprint. to footprints Best in in deliver U.S., world, with multiple Canada,

we to streams, classes, warranty across engagement emerging revenue programs. addition, video XXXX new deepening such well events is deepen piloted as user drive Australia, Fourth number markets. consumer programs our and maintenance instructional have or presence In being in of service as going live a grill and recurring exciting and expanding as in trade-in

our investment from Europe, speaking of part year Shanghai today, seeing was developing finally opening on we exciting were XXXX the quarter. see season. in eastern Italy, and executing only represents Fifth the the from XX% QX prior regions and great geographies in Chile, with are China, performance were is opportunities although coming quarter most operational China; significant growth first continue the Weber business from our growth it up initiatives. value-enhancing to emerging on store sales our building We and versus in of all upcoming countries coming of This for our small a Mexico,

may I engine our earlier, the talk see of of a operationally face to term seem current long great that to competitive evidence great infrastructure driver differentiator us a is a While for continue productivity headwinds Weber. a in and key value. it we about multi-continent progress the is paradox for This discussed

exceeding Our the capacity there, cost outstanding are we early expectations; already new plant our success fact, results add in in yielding at Poland further and leaning and is given into throughput site.

Over largest positioned in Looking and detail. and global best to the a to pass term our operations, the around it long category Chief growth the moment that, in ahead, to the over view financials industry. footprint, geographic in like well Financial our best the consumer team to commitment thank of take with would the remains best their exceptionally challenges resilience, temporary With I world and term you, I’ll order trying innovation shareholders. value and a the Weber team leadership, in to brand, the quarter engine, and consumers best near both Officer face their Horton, maximum and with first the guidance our to to to Bill. greater Bill continued deliver passion our members to for their discuss but

Bill Horton

for Chris, our Thanks attending today. everyone call you and thank

the limitations, early seasonal Chris with we mentioned, Overall, shifted Zealand quarter represent port the and by to but demand, sales to being business delays, Weber first Australia our quarters quarter. a saw As issues China business, season and sell-in strong in congestion quarters is some our only due and availability our trade caused in supply shipping New historically we the of the year and lowest season quarter. the first second fourth product for power

a XXXX fiscal on million two-year last million up or to As X% though they were decreased from $XXX $XXX discussed, basis. stacked QX year, million XX% $XX net sales

net million quarter a chain related two-year net supply sales XXXX. net of million million this XX% year. versus were negatively increased accessories. Americas, sales On last shortages the XX% and Americas basis, sales or For by impacted of certain $XXX stacked grill $XXX decreased to components, from QX $XX

QX to expect We shortfall in this make and sales up QX.

our for at selling our ambassadors launches initiatives, prepared including retailers, content in-store, digital to key progressed for aisle new space and enrolling adding new on we we team. season, As several and increasing influencers product our

EMEA, sales stacked XXX% million sales QX decreased basis, For to two-year $XX year. increased X% net last $XX net of On to a million compared from or million XXXX. $X

markets European continue developing strong into the brand region. allowed to us Weber to growth in the has expand to ability Our achieve

the our improving stores next Weber by structurally markets and business of are more markets, end in targeting XX% We to in all major expanding year. XX% growth stores all

than distribution We driving of broad are the more developing in beginning versus also XXXX. by countries scale several XX% up

in stacked last Both basis, line million net are a with such national Basque expanding more Andalusia examples have our Italy, Spain $XX regional areas countries, than and spend. year’s areas area get focused net emerging the underserved coverage metropolitan payback currently in and were sales XX%. Asia-Pacific, we in Additionally, people. more as million, which one On of Campania in advertising sales the our on sales. two-year to were In increased

region, our and As in I overall in demand. strong two New are the seen largest Australia mentioned, season now markets very their and selling have core Zealand,

channel remains Our partnerships retain in focused investment generations team new Asia-Pacific to on engage, and advertising acquire growth consumers. brand of and and with Weber

for last to results, at profit to turning year. factors manufacturing is despite worth challenges with $XX are freight. cost million or points environmental the examples and million We’ve inflation with XX.X% to share our decreased margin a being margins be only gross and the today, our levels. not specifically quarter and to material faced gross Gross Now basis call-out, although historically XX% $XX and high It with we year, $XX significant last supply like $XXX we to about tariffs from cost from manufacturer XX.X% million domestic that talked chain tariffs of unprecedented from more X,XXX than noting burdened impacting macro grill seeing I’d year-on-year impact we major what some inbound business, of continue for presence. million negative decreased a

realized rate most the result was gross pricing containers driver quarter, of significant purchased our spot continue declines export margin inflation market commodity the record we goods for Although China. in from the cost and of

new to perspective, For paying $X,XXX $X,XXX prepared gross containers In grilling an capacity the range. the container, impact following The or XXXX of our demand average Christmas for cost inbound the the shipped multiple gross global cost year-over-year the rate quarter escalation impact our The in during of the XX% year-over-year shipping million, first times. as China we government our current due push in are season. is a to to decline. lunar season, negative driven shipping on year. high in container including QX we to outbound for power and $XX,XXX leading four Today, on restrictions $XX blended nearly three $XX,XXX up margin and shipping coming XX% the rate margin of by our continued QX, we per imposed was congestion was in quarter, to X,XXX situation by factors, margin the of

not representing expecting more our conditions of to from freight fiscal projections have normalize year and year our two million-plus X% this sold of are than increasing cost goods during currently times XX% We full inbound three creates freight to on percent sales. sales difficult of business of term. the surge headwind that to This the on a from overcome in is ago XX% years short in basis, a $XXX

our our the improve past of took to we price next responding to one the two In XXXX, terms in approach sequentially inflationary and and pressures, over impact fiscal gross fiscal XXXX months in of recently regions, the will several in XX increase third quarters. most margin

basis compensation in primarily million administrative global This and for last of we to primarily in grow XXXX impact transformational million of XX% non-cash driven increase X,XXX costs to points which XX.X% related example, the and SAP of $X costs our to basis additional increased XXX one-time and $XXX costs stock-based year-over-year, million higher basis by $XX to million, we to For XX.X% in business QX QX expense by acquisition. was XXXX sales points points project, Life of million June $X from related and year. $XX X,XXX realized Selling, expect general of increased pricing or to QX.

of of XX.X% costs, sales last non-cash other impact a non-recurring the was Excluding SG&A year. stock-based versus and as compensation percent XX.X%

of the to For in the million net or net prior basis of a year. $X million decreased income from by million net quarter, X,XXX loss $XX $XX income points

million the to $XX return of profit expense a to non-cash sold patterns. as the a decrease of the loss Adjusted the over normalized quarter lower XX.X% compensation stock-based costs for seasonality was result was prior sales compared million XX.X% last or higher of and and driven As higher of goods inflation and million year. driven sales by Again, XXX% gross cost million the higher and previously net of net lower of of sales $XX $XX primarily year. EBITDA variance or $XX primarily discussed, to decreased by

raw increased XX%. cash and ended impacting levels, supply increased freight, the by timing used of net prepaid to from million chain by December in months operating inbound increase QX current $XX an million $XXX The accounts payments increased inventory usage cost an XXXX, million for assets, XX, leading For partially inflationary payable. was three or driven and global was impact $XXX increases materials offset of XXXX, This primarily income favorable activities of higher challenges in for other and unfavorable expenses taxes. of to

a revolving our term a loan. As credit and includes you are facility aware, facility credit

capital to As $XXX in fund markets. revolver given to capacity EBITDA cash QX, capital our average basis guided for are largest available the opportunistically strategic was guidance of under and of of secured towards and the assess fiscal sales lowest and cash additional may flow net debt that on These our equivalents December sheet above Keep financing, structure. our remarks include credit we XX-month currently to to future, strengthen a our the look balance planned adequate working may X% with additional position, range credit Based cash borrowing capital our working within and during of times finance year be X% our capital to ensure we on range providing financing our X.X due availability our and provided activities, up is requirements, operating and the I’d options plans, agreement. ratio XXXX. facility believe by to cash efficient and at and constant growth also seasonality capital the last wrap allocate under we we other sales in facilities, happened potential may service. which the acquisitions currency an like quarters options. that and and debt leverage expenditures, XXXX our mind QX updated basis. previously our revolver we to anticipate most We and net on net continue to had by XX, prepared our compliant XXXX, stacking million my usage debt leverage In average

exchange year headwinds U.S. with basis expect account in actual to the the X% negative on against dollar we now euro, currency taking rates, foreign sales X% net into for increase when fiscal strength the on However, an the to XXXX. particularly

remain which lowering inflation term highly In addition, full challenges those increases of now to cost Nevertheless, continue and the do million. and and in of are in year the for $XXX executing inflationary that longer particularly headwinds, and that, savings Adjusted benefits hold pricing In laser for our focused short fully remain offset the half have we five questions. yield the while for the we view call long we cost will on will our the With headwinds certainty take aggressively to key stakeholders. and I’d to confident are term in first offset our term actions continued million the between up Weber external opportunities we price before to expectations substantial pursuing on so, assumptions, open updated EBITDA be initiatives no year $XXX strategic can initiatives like our long both outlook and all full.

Operator

[Operator Capital go question our Markets. instructions] is Siegel We have ahead. Simeon Please of from first BMO

Dan Stroller

helpful. to that time was very the for capabilities on Stroller in the for here, to call on today, thanks freight Simeon. specifics the Chris, mentioned impacts, starting come Dan really your Thanks Bill, is This morning. fruition. good Hey, you and for Poland the on

to we in start or XQ were late I sort impacting the think it expecting the either previously of half. back P&L

thanks. anything, one impacts and may those earlier, inventory, if I start be wondering to or on realized then have Just now

Chris Scherzinger

I as would Poland we in lines really I October product I there, started we in impact SKUs the lines Sure, dynamics as as well. be able our is belt, to more say so and particular, and linearly thanks and full new expand do standpoint, freight in into and its volume products to in don’t as about that over here well, going to Bill, to if you QX think qualify the the well, that talked generally advantages Dan. handle mentioned to terms don’t commodities up from quarter extremely see to but in a time, line, under know, continue our anything and different see are it’s able of so we until be but markets it to and income there it’s of you Because and when of want of until going so shift be increase remarks. I in P&L timeframe, fully an that accelerating hit statement from sort but well. to I margin maximized terms full, there. the it the add new and would really relative operational on things will going honest, produced we’re investment and to we facility the the growing have

Bill Horton

Yes Chris, I think you’ve hit it.

Poland think, because into full seeing he you I the scale that additional certainly facility. get on more it so and P&L margin the season, Chris product improve in Chris run as be said, meat will and sequentially of productivity we’ll versus get that as more Poland a standpoint, by like that if and, the accretive significant overall, on also QX adding producing mentioned, as is will. we be the brings plant today certainly, is, that lines rate to we’re Dan, mentioned, you’ll But the from benefits

Dan Stroller

of either Got or what in-transit it, in thanks. of On inventory, give composition cost? terms like the on versus unit the you basis could looks a Thanks. growth anything

Bill Horton

inventory and start-up, in me--there’s we seeing and if so thing dynamic have a inventory low, normalized think parallel if to stock pause a kind factor plant variances remember, on Poland definitely your it raw inventory in cost because we’re was know, seeing product finally, we’re times is you second with strong of season will, existing retail for year significant you more is we’re investment play, of as conscious Poland of we we is seeing plant inventory what cash what so I levels, in levels. demand an number upside factors you finished in that and balance we’re you obviously goods in and to so have years abnormally right see now two longer financials, Poland U.S.-built on last bringing inventory inventory, times as dual our given grills in as sitting the transit QX, part a we’re A inventory of helps low the in QX, and in sales as we’re Chris into mentioned the seeing, was question. material POS our facilities, up Poland have in and EMEA the QX last plan. if XXXX, in that’s was, in see it saw and year just replenishing the against of goods so were plant, strong in is replenishing--you make well another the sure from you as a driver full one flow and excess our Yes, quarter. certainly sheet on operating let increased double that’s our that call we’re really the our to that that of now capitalized more ago seeing, in, a two as product with Then I’ll return Then that if globally, from generally given you’ve QX you rolled well. so protecting in that’s now, from wanted and, you’re inflation bit into on right season, will, we’re plant, starting your balance times the impact. being sitting build-up QX, off, the supply higher now the in coming but got was now Chris expensive, having as a the variance there a built mentioned, product mentioned, that sheet transit you safety count still Poland of the inventory executing so of this

Dan Stroller

Thank appreciate No, both, that’s great. it. you

Chris Scherzinger

Dan. Thanks

Operator

Alexander ahead Megan. Please on next go comes Megan of the with Morgan. from JP question, line your Our question

Megan Alexander

about Hi, you for forward, of in that hoping XQ, in assuming thanks and Absent XQ rest so, is you year are if how the talk very much. was seasonality does your of normal a come talked of could about base out I our shift given Americas. built forecast the estimates mean the the the bit we should you going below? sales did cut to kind

Bill Horton

wouldn’t I guidance great there’s your no provided Yes, region, recommend range for I purposely cutting few you think certainly. on dynamic forecast, the know, both on sales, our reasons. net We’ve guidance we question. and within widened that a

have to we’ve the still given the going of in dimensionalizes as the our chain POS POS it wider we’re XX% outlook. just front into January part our we’ve our until biggest big our season some of all, even got to be us, and a lowest into so uncertainty of still year, is we’ve we front transit sales season, by full the part--the QX increases, far us, it of sales that get that we QX First fiscal so of quarter heard in on through whether the supply in you’ve discussed, range and hold decided about, of season, now that time XX% of our etc., things year volumes still

and this of the question your that other of The call, Americas you dynamic on chain the might in to with relate the supply complexity QX, we you Does talked with our load piece the - in between last shifting line, the our some so there new seeing actuals. be new for that be could trade load Genesis help? because product QX and know, QX Genesis in that about line QX of that our might some launch,

Megan Alexander

helpful. really Yes, that’s

rest from prior follow-up, given taking this talk are year? growth price was were, you coming you just XX% how guidance you think, a additional changed, in assuming of the I that as has maybe units. increase Just an that from and Can XX% about price the

Bill Horton

the let my year me so perspective full Yes, give pricing. on you

We digits expect the pricing from double be growth low to year-on-year in a standpoint.

That’s the We you mid going as therefore expect foreign to on X% to season. back see but season, now, flat get low our we’re exchange, the be we and impact our we demand volume would POS digit press low range our guidance to exchange, down again get prepared into current into our to remarks, as right head mentioned in into on digits. kind if foreign top once we release range so to guidance the single as single peak X% insight more line, into consumer it we of much

Megan Alexander

Got you. it, thank

Bill Horton

for questions. Thanks the

Operator

Robbie Ohmes is line of your ahead America your Please Bank go Research, now with question. from Global open.

Robbie Ohmes

of A follow-ups Hello, couple good on that. morning.

you you that of With the give cannibalization growth when these and regionally, see new you’re from talked wholesale up do on from accounts? your any your us REI, pushback look - wholesale things accounts update partners about you opening any how kind Best or can and Buy

Chris Scherzinger

Hey for question. Thanks Robbie, Chris. it’s the

We that. haven’t seen

it’s--it and test expand partnering moment a closely really our distribution been very you I think partners we’ve healthy there. with is as core but our I well when be distribution, can think business

hardware with is In you they’ve to a and cannibalize take Hardware think our that channel, us like consumers different fact, new customer the been if and and in points grow co-op don’t distribution Ace I so for reach geographies, performing the of core. customers, there of room one that top different

the partnership a to a retail been our strategies to it partners drive core that’s in channels. it’s still core as specifically and and for with and our for recent certainly that’s successful and the that’s entry can REI well business of the experience, this occasion our on in of be the grow bit and a about way, collaborative what in to a portable for If so you as We for us, Weber successful and type them new complementary retailers think as year. on want consumer, an years Traveler, us primarily into little goes example, focused use so shopping different different grills

Bill Horton

point-- the Robbie, other Yes

Robbie Ohmes

That’s helpful.

Bill Horton

you have back growth just we is Canadian continue billion, thing do this a mentioned can Robbie, you north Sorry only add if complexities started, and Canada, grown the look years, candidly to Chris will Bill. in manage with back is whether and you customers, you $X.X of $XXX so, into if of The billion others, and and I’d so go launched Buy when business like million what weber.com, that. Best we new and it go Costco you $X and when across was few come Tire go well I when we’ve that has we a done this feel from to now through business, be it XXXX, then

Robbie Ohmes

helpful. Chris really as is acquisition for the these you this or can That’s days? looking you--Chris, can at and what working well, Maybe us on you’re remind strategy

Chris Scherzinger

spirit Yes, our in a barbecue of that’s within named Weber Ventures, of thanks entity XXXX year sort inventing did subsidiary frankly and when founded entity, with Weber reinventing and for that’s also with and on barbecue the Stephen or Shay, category, strategic We Officer, George opportunities. Troy XXXX CEO in new lot mindset that the category, the Robbie. we founding Ventures, the the called create different Ventures. of our focused currently Chief Growth go named is XXXX evaluating XXXX of of the who is process and into We Troy a

a also I sequentially, from candidates. between and CARS with would I us, stores bring core so ago, we the like of and look a XX paved business, high behind exciting now as the around presence consumer segments, technology a for world, pretty places the in in with of diligently of be inorganic are great to lever and it very we the are They June would world, would like different as idea for with outside they then business, drive for dialing kind the the much half and of where potential As been additional would strategic brand up the XXX the same those an down. in academies to can by global our engagement Weber like where margin be the other say pillars. drive terms incremental we’ve the favorable and more there have engagement then purchases we we gross and grill or particular has purchases by and frequency at let’s strategies to candidates would and did speaks business U.S., accessories initiatives, particularly bear margin and with footprint, Weber, drive Life the acquisition which for candidates say out we’ve in growth network example, of at potential we really strategic the infrastructure purchase where attractive mix want and road we that into year extending than around allocation that disruptive that growth accretive standpoint, drive exciting strategy to new are want invest a built either grill the to benefit innovation, of markets need from a add we we around looking doing and to and gate look at we have intent mix capital the to to

We are our and down not going do us on that return do capital, anything we or opportunities We’re in think rash calls foolish. something. of nail there to when be will invested first very terms but for and of be to grow, to financially tend minded we one phone disciplined

Robbie Ohmes

much. great, sounds That thanks so

Chris Scherzinger

Robbie. Thanks

Operator

comes on your thank question of Arpine, with next Our question, go from you. UBS. Arpine Kocharyan line the Please ahead

Arpine Kocharyan

Hi, demand. thanks. talk you This is Arpine. I was about could if wondering

weeks you could some demand. you I us inventory commentary follow-up, I in season yet, consumer you share. highlight of high my thank is I situation detail helpful, was POS if you - think would you release, but give sustained terms retailer understand in high what quick be inventory? wondering in anything any have aren’t the POS could you. Then of That on the

Chris Scherzinger

all work-from-home in pandemic the miss cooking IPO about me and the two inflationary to hemisphere outdoor sale me would since I’ll Sure, the talked last to this Generally idea that in anything, staying feel up. that from two-year it pandemic, but with with great concepts cooking really soft of follow I comment that playing XX% when October engagement low mentioned chime warm mentioned, least will three a outbreak up generally then pathway, a still the around--the we’ve hits, dynamics of it behaviors, the around that level time more holding. of out weather a X% demand the think working grilling, put had up spending home days is and now though to five think first QX the it felt the as consumers of return and way a so we the or but from That December that can of a it over to order does QX is that floor, we’re and in fell dynamic the results, not consumers. sustain we was related the historically There’s seeing a there season during two for felt behaviors them QX say I been--you we like the time, the give the pandemic, peak and positive our you grilling on category, down more of see been at behaviors, the with those us at now those I that coming to tea always if on be home, oriented has out seeing. week for trends today, is to home the cycles which new higher about it, had--based engagement as characterized a home Even northern of sustaining, if are on their quarter, bears continue mid-double and I that’s be the reason around and quarter dynamics and as traditional that home-oriented the more down know, and lot of it’s positive two-year to to you last at on continue. like even even sale was over know, but - over particularly and sustained during work-from-home of last creates all is standpoint, favorable factors engagement have digit and continue we the one for over years social create years in or that eating Weber but more it’s know the Bill, and followed week, believe and and our out both of impact through the homes behaviors a I of thanks around that’s point dynamics so is period, don’t back we’re point a does in is appear even leaves, in the The category been, plus-XX%, I home, were that but behavior consumer it XX more that working Arpine, seasonality, bears does home-oriented call I be lockdown I and right up quarters remarks of new Chris. tailwind. quarter point chance what basis. and out speaking, that us couple about--you over digits cooking among the think more single from the out stack first, to in driven the during we’re floor if sale way does some for the couple days the good at we

The from a us, that without southern suggest--that quarter season was quarter even first business well digits our market, business, and of low other Australia-New year-on-year into really because northern so and be a portends pricing volume their from going standpoint volume that it’s any healthy that QX sale hemisphere positive in in and standpoint thing markets to is benefit, one and quarter the business for was point to in season during hemisphere, the growing which a probably hemisphere QX. mid northern single in tends would I for a season for and peak is That would significantly add QX. the attractive Zealand market that’s is up in

Arpine Kocharyan

weeks that all do helpful. that Thank you detail. inventory for Really very you have on quick of at color? retailers, That’s

Bill Horton

inventory-on-hand at QX, actually generally XX% end major were that data, the Europe. can we tell versus the in don’t or where about in have the But per se around I’ll I particular what up the can U.S. of color last is both Americas generally--and our retailers, and some and we year you weeks I XX% get was give Arpine, then front to at Yes you up of five but QX. me, in I’ll speak

you’ll should similar referenced, we gives get got delayed at higher the more standpoint, and where with came and just if door, of we’re as I will, containers at QX, inventory what QX, or that in hearing a but year, as lapping so feel to more launches and the bit correct will. with maybe in facings were levels generally inventory you out our would from well get to so XX%, waiting be expected trade about that inventory see where and out again, inventory at to you again, it we’ve had QX. water just European versus new the of chain kind you lighter just us be there. a From we be close would have we don’t to retailers XX% in up be the we out is product just to data, confident to necessarily in-transit shelf, what hard million low challenges we inventory of, QX through our inventory that’s literally fast would example $XX to the that both trade, be, we of trade all little and year, quote, we exception still say generally want the - we That’s just course on add where was year-on-year, be, I one about Europe little our this supply normal, additionally comments up the chain, the ability shipped really by last the of on work supply target that we bit once driven on but was if for a end I so Our to

Arpine Kocharyan

helpful. that’s much, very you Thank

Bill Horton

you. Thank

Operator

Fargo. Our final of Please from question Carey go Chris on Wells line comes ahead. the

Chris Carey

versus but to It’s takes, of EBITDA to range. wide understand morning. can end? talked I what kind end help the us get you’ve puts and just a know various maybe might low you the good high Hi, you

Bill Horton

hold of yet through in as came uncertainty that and it in time is from cost that earlier, the and that, certainly to into out at percentage reality XX% much to mentioned moment and sales the But happens inbound QX QX discussed, impacts bearing On September given Chris. I freight be mentioned we thanks the chain inflationary XX% our I of year. the our this of QX. the booked annual of category as headwinds are fiscal that February impact. be supply that consumer lowest Yes, higher a there, we also range quarter line out the line to bottom that, we’re decided our a really both to wider our us drive at that’s top the etc, Obviously every just with new results products, and sell-through wider in third why get our impacting so until on we’ve are the well will this our that POS towards line time. the into all our going assuming not range space, that end quarter in and higher top range, we of chose season of to go

Chris Scherzinger

moderate, and this, worse know, as get happen possibly then on that, might a we’ve hat here. have to container that, hanging of that much think a partially costs Chris, costs post-lunar know that a so felt approach it gets covering pin exactly any rather, the new speak, leader, on our to don’t than like, ball taking range down. to modulate--or year. going business than it’s and rather but I crystal where they’ll correct what’s My course container is how I of than options could saw so having quarter just related comment behind we the we felt I I just year, of around like our and add, when container us this, front us would--and If lowest I rates they think at The think having to for and in Bill’s from costs there from October, in and years, in December-January. from maybe costs--you recollection went XX up didn’t go over there, up we almost from cost they ever container went up XX% least my there, at highest could difficult just with could worse hope it container my I

taking we’re the accepted as proactive our cost to that initiatives more tactics, our in and improving I get would the the as think. with increase that that our actions month can every would can in front on kind you road that price variability, those the I our the produce, business quarter freight literally the narrow have where the is--I and to I certainty that mentioned more--just reduce the more belt, to more that negotiations of through would a marketplace under us this, we impact new on within those and producing the range, think action forecast can a lunar be supplier out the based think so and our get mentioned in out window course correct living of will a of remarks, more call post impact situation, good called from the that what we higher can, manufacturing Poland, a expect into we and after I my very to shifting us of we suppliers, go that we and certainty earlier, today’s would today, increases the of much we that and more kind the we more down expect and implementing that’s things we level direction. improvement way in the actions steer are of range lot that that year the dynamics also just container can in

Chris Carey

follow-up outlook Very on just for cost. Quick the helpful.

inflation the pricing else you’re that’s the case. Thanks just the inflation provide what as that I the perspective said some you full COGS to half on expecting have factoring think COGS Can against? go, containers, into as is for year the going what of you’re not outlook correct so if far please be - you you’re much. and may me

Bill Horton

on XX% share generally than to and margin. freight, purchase in obviously, mentioned Yes, throughout selling cost the all than inflationary rest of fair XX inbound the bulk because progressing I again quote, your the the correct in that if grill our represented, COGS. on the bringing that this freight off goods, Chris, so on year, it’s, lowest It costs, call inflationary cost of challenges freight of collectively percentage was see were on to you more quarter, impact the you’re more the that combine QX represented in Chris it and as XX% sits of will points bulk into the rolled full it’s it P&L and hits drag sheet balance first QX headwinds season. then Where commodity and be mentioned, in gets almost you’re those of that QX, when headwinds of and in we it of in QX, the

to year, freight essentially the rates actually in assuming historical because from on margin inflated. But going rates in the that our times that from your rates are not averages stay that XX% seeing grill expect normalize is XX%of gross we coming purchase We four on outlook freight inbound and so that we’re are would to overly and market that - aggressive being we’re go. being high commodities are they closer we’re optimistic we’re roughly where to coming the where XX%, costs not about impact container across expect being today,

Chris Carey

so thanks Okay, much.

Operator

ask As please a by one star reminder, if would keypad. question, on you followed to like a telephone your press

the team. back hand I’ll questions further As over to we registered, have no

Chris Scherzinger

Thank joining today. us you all for

are prospects. to the We very--we about continue business optimistic be long term and very the

a forward. well The we have all in great that Q&A mentioned the business, talk very emerging stores also, advancement progress positive grill about built that and We’re our and being are there’s markets, we which a lot here, our us but a that’s lot place infrastructure strategies of working. the of very in excited direct the going academies, going so I for opportunities lot earlier about Weber and innovation didn’t certainly of in and our

word your headwind on that and cost this, to confident going would standpoint, We’re soon. forward way generational we’ll battle a speaking that. thank our transportation back you commodity from to again I strong look through of out But you with the for and I’m use the end today, time come cost and

Operator

and Thank joining you today, gentlemen. us for ladies very much

You disconnect your afternoon. may good now lines. Have a

Weber (WEBR) 14 Feb 222022 Q1 Earnings call transcript