2023-03-17 10:35:35 ET
Shares of Traeger ( NYSE: COOK ) surged over 20% at the intraday high on Friday after a stronger than expected Q4 earnings report.
The make of pellet grills notched a $0.07 per share loss for the quarter, less than half as wide as analysts anticipated. Meanwhile, $138.13M in revenue was $19.59M above the Street consensus.
“We were pleased to see the consumer respond favorably to our efforts to drive demand during the holiday period,” CEO Jeremy Andrus said. “Moreover, we made demonstrable progress on our key near-term priorities in the quarter, including driving a material improvement in channel inventories and realizing the benefits of our cost savings actions.”
Management told analysts on Thursday evening that it expects gross margin expansion in 2023 due to lower input and freight costs as well as cost-cutting efforts. The company expects to work through higher cost inventory by the second half of 2023. Inventory at the close of 2023 had risen about 8% from the prior year to $153.5M.
Total revenue is expected to be between $560M and $590M in 2023 against a $579.48M consensus. Adjusted EBITDA is expected to be between $45M and $55M for the year against a $54M expectation on the Street.
Andrus said that results should improve sharply into the back half of 2023 as inventory levels normalize.
“Retail destocking will continue to pressure our selling in the first half of the year as our retail partners continue to reduce inventories,” he told analysts. “We expect that 2023 will be a tale of two halves for Traeger and we are planning to return to top-line growth in the second half of the year.”
Shares of Traeger rose 17.28% in the early hours of Friday’s trading session.
Read the earnings call transcript .
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Traeger stock heats up on earnings beat, upbeat outlook