On November 8, 2023, Traeger Inc (COOK, Financial), the innovator in the wood pellet grill industry, announced its financial results for the third quarter ended September 30, 2023. The company reported a robust increase in total revenues and a significant improvement in profitability metrics, prompting an upward revision of its full-year 2023 guidance.
Financial Highlights and Operational Performance
Traeger Inc (COOK, Financial) experienced a 25.5% increase in total revenues, reaching $117.7 million for the quarter. This growth was driven by a 45.1% rise in grill sales, which totaled $56.6 million, and a 20.7% increase in accessory sales, amounting to $35.8 million. The consumables segment also saw a modest uptick of 0.9%, bringing in $25.4 million.
The company's gross profit margin saw a remarkable year-over-year increase, reaching 37.9% in Q3 FY 2023, up from 26.7% in the same period last year. This improvement was primarily attributed to favorable freight and logistics costs.
Despite the positive trends in revenue and gross margin, Traeger Inc (COOK, Financial) reported a net loss of $19.3 million, which is a significant improvement from the net loss of $211.1 million in the third quarter of the previous year. The prior year's net loss included a non-cash goodwill impairment charge of $110.8 million.
Expense Management and Adjusted EBITDA
Sales and marketing expenses were slightly up at $25.9 million, while general and administrative expenses decreased substantially to $24.8 million from $70.5 million in the prior year's quarter, mainly due to a decrease in stock-based compensation expense.
Adjusted EBITDA, which excludes certain non-recurring and non-cash items, was $4.7 million, a significant improvement from an Adjusted EBITDA loss of $13.0 million in the same period last year.
Balance Sheet and Liquidity
As of September 30, 2023, Traeger Inc (COOK, Financial) had cash and cash equivalents of $11.3 million, down from $39.1 million at the end of 2022. Inventory levels decreased to $101.9 million from $153.5 million, reflecting strategic inventory management.
Updated Full-Year 2023 Guidance
CEO Jeremy Andrus expressed satisfaction with the third quarter's financial results, which exceeded expectations.
Third quarter's performance is the direct result of our team's unrelenting focus over the last year on positioning Traeger for improved financial flexibility and profitability,"Andrus stated. He also noted that the company is well-positioned to grow the Traeger brand despite a volatile macroeconomic environment.
Based on the better-than-expected third-quarter performance, Traeger Inc (COOK, Financial) has raised the midpoint of its full-year 2023 revenue, gross margin, and Adjusted EBITDA outlook. The company now expects total revenue to be between $590 million and $600 million, with a gross margin between 36.5% and 37%, and Adjusted EBITDA between $57 million and $59 million.
Conclusion
Traeger Inc (COOK, Financial)'s third-quarter results demonstrate a strong trajectory in sales growth and profitability improvement. The company's strategic pricing actions, disciplined expense management, and lower supply chain costs have contributed to these positive outcomes. With an updated and optimistic guidance for the full fiscal year 2023, Traeger Inc (COOK) is signaling confidence in its operational strategy and market position.
For more detailed financial information and to participate in the earnings call, investors and interested parties can visit Traeger Inc (COOK, Financial)'s investor relations website.
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Explore the complete 8-K earnings release (here) from Traeger Inc for further details.
