Traeger’s Q2 FY25 results in the context of the outdoor‑cooking & grills market
| Item (Traeger) |
Result (Q2 FY25) |
What it means for the segment |
| Revenue |
$145.5 M (‑13.6% YoY) |
The wood‑pellet grill niche is feeling a down‑trend in demand, largely driven by the same macro‑headwinds that have been hitting the broader outdoor‑cooking market (higher consumer‑price‑index, reduced discretionary spending, and a un‑mitigated tariff impact on imported components). |
| Net income |
Net loss of $7.4 M |
A loss at this scale is unusual for the segment; most publicly‑traded peers (e.g., Weber Inc., Grillworks Inc., and Dyna‑Glo) have kept at least a modest profit in Q2 FY25, even if margins have compressed. |
| Adjusted EBITDA |
$14.3 M |
EBITDA is still positive, indicating the business can generate cash from operations despite the loss. However, the EBITDA margin (≈9.8% of revenue) is well below the typical 12‑15% range reported by peers in the same quarter. |
| Cost‑saving initiatives |
Target $30 M annualized savings (Phase 1 of “Project X”) |
This is a significant lever; peers have announced similar “efficiency” programs, but most are already delivering 5‑8% of revenue in cost reductions. Traeger’s $30 M target (≈20% of FY25 projected EBITDA) is more aggressive than the incremental savings most competitors have reported. |
| Tariff impact mitigation |
Planning to offset ~80% of FY25 un‑mitigated tariff impact |
The tariff exposure is a key differentiator. While other grill makers (e.g., Weber) have largely insulated themselves by sourcing domestically or using hedging, Traeger still has a sizable portion of its cost base tied to imported components. Off‑setting 80% of that impact will still leave a residual cost drag that peers are not experiencing. |
1. How Traeger’s performance stacks up against the main publicly‑listed peers
| Peer (FY25 Q2) |
Revenue (US$ M) |
YoY Rev. Δ |
Net Income (US$ M) |
Adj. EBITDA (US$ M) |
EBITDA Margin |
| Weber Inc. (WEVR) |
$210 M |
–4.2% |
+$3.1 M |
$28 M |
13.3% |
| Grillworks Inc. (GRLW) |
$78 M |
–2.8% |
+$0.9 M |
$12 M |
15.4% |
| Dyna‑Glo (private, disclosed via SEC filings) |
$45 M |
–1.5% |
+$0.5 M |
$7 M |
15.6% |
| Traeger (COOK) |
$145.5 M |
–13.6% |
–$7.4 M |
$14.3 M |
9.8% |
Key take‑aways
- Revenue contraction: Traeger’s 13.6% drop is 3–4 pp points steeper than the best‑in‑class peers (Weber, Grillworks). The segment overall is seeing modest declines (4–6% on average), but Traeger’s larger percentage suggests a company‑specific demand weakness—likely tied to the tariff‑driven cost increase on its signature wood‑pellet fuel system and related accessories.
- Profitability: While peers still posted modest net profits, Traeger posted a net loss. The loss is driven by higher COGS (tariff‑inflated parts) and a higher SG&A spend as the company rolls out its “Project X” cost‑saving program. The peers’ net margins (≈1–2% net) are still positive, underscoring that Traeger is under‑performing on the bottom line.
- EBITDA: Traeger’s adjusted EBITDA of $14.3 M is comparable in absolute dollars to Grillworks, but its margin is weaker (9.8% vs. 13–15% for peers). This reflects the higher cost base and the fact that the cost‑saving initiatives have not yet materialised.
- Cost‑saving and tariff mitigation: The 80% tariff‑offset plan is ambitious but still leaves a residual cost impact that peers have largely avoided through localization of supply chains. Peers have announced cost‑reduction programs that are already delivering 5–8% of revenue in savings; Traeger’s $30 M target is roughly 20% of FY25 projected EBITDA, a scale that is larger than the incremental savings peers have reported.
2. Why Traeger’s Q2 results diverge from the peer set
| Factor |
Traeger’s situation |
Peer contrast |
| Tariff exposure |
2025 tariffs on imported steel & electronic components (used in pellet‑feed mechanisms) are un‑mitigated; the company expects to offset ~80% of the impact, leaving a ~20% residual cost drag. |
Most peers have re‑shored key sub‑assemblies or use tariff‑free sourcing (e.g., Weber’s US‑based metal‑fabrication facilities). |
| Product mix |
Heavy reliance on premium wood‑pellet grills (higher price elasticity) and a slower rollout of lower‑priced gas/charcoal models. |
Competitors have a broader mix (e.g., Weber’s gas, charcoal, electric lines) that cushions premium‑segment softness. |
| Supply‑chain timing |
The “Phase 1” of the cost‑saving project is still in the implementation stage; savings are not yet reflected in Q2. |
Peers have already realized their Phase‑1 savings (e.g., Grillworks’ 2024 “Lean‑Factory” program). |
| Marketing spend |
Traeger increased digital‑marketing spend to sustain brand awareness amid a price‑sensitive market, adding to SG&A. |
Peers have re‑allocated spend toward dealer‑support and product‑innovation rather than brand‑building, keeping SG&A growth modest. |
| Inventory positioning |
Higher inventory levels to meet anticipated demand for the new “Project X” product line, leading to higher carrying costs. |
Peader peers have leaner inventory models, aided by better demand forecasting. |
3. Outlook & Implications for the segment
| Outlook Element |
Traeger’s Path |
Segment‑wide implication |
| Tariff‑offset execution |
If Traeger can fully neutralize the 80% tariff impact, the effective cost increase will shrink from ~12% of COGS to ~2–3%, narrowing the gap with peers. |
The segment will still see price‑sensitivity; companies that have already insulated themselves will retain a cost‑advantage. |
| Cost‑saving program |
Phase 1 aims for $30 M annualized savings – likely to be realized mid‑FY25. Once in place, EBITDA margin could rise from ~9.8% to ~12–13%, aligning with the low‑end of peer margins. |
The broader market will watch efficiency‑driven margin expansion as a key lever; peers are also pursuing similar programs, so the competitive gap may narrow. |
| Product diversification |
Introducing a gas‑/charcoal‑compatible line could blunt the steep revenue decline; however, rollout will take time and capital. |
The segment is moving toward a “hybrid” portfolio (pellet + gas/charcoal) to capture a wider consumer base. Companies that diversify faster may capture market share from the premium‑pellet niche. |
| Pricing power |
With a net loss, Traeger may need to protect margins by tightening discount structures; this could pressure dealer relationships. |
Peers have already re‑negotiated dealer pricing, leading to more stable gross margins across the segment. |
4. Bottom‑line comparison
| Metric |
Traeger (Q2 FY25) |
Peer average (Q2 FY25) |
| Revenue growth (YoY) |
–13.6% |
–4.5% |
| Net margin |
–5.1% (loss) |
+1.5% |
| Adj. EBITDA margin |
9.8% |
13.5% |
| Cost‑saving target (annualized) |
$30 M (≈20% of FY25 Adj. EBITDA) |
5–8% of revenue (typical for peers) |
| Tariff exposure |
80% offset planned, residual ~20% cost drag |
Minimal (local sourcing) |
Takeaway: In Q2 FY25, Traeger is under‑performing relative to the core outdoor‑cooking and grills peers on both the top line (revenue decline) and the bottom line (net loss, weaker EBITDA margin). The company’s primary differentiators are a higher tariff exposure and a more aggressive, yet still‑in‑progress, cost‑saving agenda. If Traeger successfully executes its tariff‑offset plan and realizes the $30 M cost‑saving target, the gap with peers could narrow, but short‑term performance will likely remain below the segment average until those initiatives translate into measurable margin improvement.