Traeger's Q1 2025: Navigating Contradictions in MEATER Strategy, Pricing, and Inventory Management

MEATER strategic shift and performance expectations, Woodridge grill strategy and impact on sales, tariff impact on COGS, strategic price increases and consumer price sensitivity, inventory management, and retailer appetite are the key contradictions discussed in Traeger's latest 2025Q1 earnings call.



Revenue and Segment Performance:
- Traeger, Inc. reported first quarter revenues of $143 million, resulting in a 1% decline versus the first quarter of 2024.
- Grill revenues increased 13% to $87 million, while consumables revenues decreased 6% to $30 million, and accessories revenue fell 27% to $26 million.
- The revenue decline was primarily due to a softness in the accessories business, particularly MEATER, despite strong growth in the Grills segment.

Tariff Impact and Mitigation Strategies:
- Traeger faces significant tariff exposure, with the majority of Grills produced in China, subject to a 25% Section 232 steel tariff and 20% IEEPA tariff, totaling 45%.
- The company has implemented mitigation strategies such as sourcing diversification, strategic pricing increases, and cost reductions to offset the impact of tariffs.
- These efforts are aimed at stabilizing profitability despite the volatile macroeconomic environment and uncertain consumer demand.

Accessories and MEATER Challenges:
- Accessories revenue decreased due to declines in MEATER, which faced pressure from a slowing Smart Thermometer category and heightened competition.
- Traeger is implementing strategic changes at MEATER, including promotional calendar shifts and cost reduction efforts, to stabilize demand and profitability.
- The company remains optimistic about MEATER's long-term value, focusing on both short-term stability and long-term growth strategies.

Inventory Management and Future Outlook:
- Traeger has withdrawn its prior financial guidance, citing uncertainty due to tariffs, consumer sentiment, and evolving trade policies.
- The company maintains a leveraged balance sheet but has ample liquidity to navigate the current environment, planning for various outcomes and assessing cost savings opportunities.
- Traeger will continue to focus on innovation, brand awareness, and cost control as it navigates the current macroeconomic landscape.