Traeger Earnings Call: 2025 Beat, 2026 Reset

Traeger, Inc. ((COOK)) has held its Q4 earnings call. Read on for the main highlights of the call.

Traeger’s latest earnings call struck a cautiously optimistic tone, pairing solid outperformance in fiscal 2025 with a deliberately conservative 2026 outlook. Management framed the coming year as a transitional reset, accepting near-term revenue pressure in exchange for cleaner channels, higher structural margins, and stronger cash generation heading into 2027 and beyond.

Full-Year Beat Underscores Strong 2025 Execution

Traeger closed fiscal 2025 with revenue of $560 million, topping the high end of guidance and signaling healthier demand than previously forecast. Adjusted EBITDA reached $70 million, landing in the upper half of the guided range and highlighting improved cost control and operational discipline across the business.

Project Gravity Delivers Above-Plan Savings

Project Gravity proved a key margin driver, generating $20 million of savings in 2025 versus an initial $13 million target as restructuring and efficiency efforts took hold. Management now expects total Project Gravity value of $64 million to $70 million, with about $50 million of adjusted EBITDA benefit in 2026, including roughly $30 million incremental year over year.

Consumables and Pellets Provide Durable Recurring Revenue

Consumables continued to shine, with Q4 revenues rising 16% year over year to $36 million, underpinned by a resilient pellets business. The company reported 315,000 connected cooks on Thanksgiving, up 11% from last year, underscoring sticky user engagement and the potential for ongoing high-margin, recurring sales.

EBITDA Growth Highlights Operating Leverage

Despite lower top-line in Q4, Traeger expanded profitability, with adjusted EBITDA increasing 6% to $19 million, illustrating operating leverage in the model. For the full year, adjusted EBITDA of $70 million reflected meaningful progress in aligning costs with a more normalized demand environment.

Balance Sheet and Liquidity Trend in the Right Direction

The company ended the year with $20 million in cash and cash equivalents, up from $15 million, while net debt fell by $10 million to $384 million, modestly de-risking the capital structure. Liquidity totaled $162 million, and inventory was reduced to $99 million from $107 million, supporting the outlook for better free cash flow.

New Products Aim to Broaden Market Reach

Traeger’s Woodbridge platform, launched earlier in the year, received strong consumer feedback, validating the brand’s innovation pipeline. Management plans two more grill launches in 2026 at sub-$1,000 price points, targeting more accessible segments to deepen household penetration and expand the addressable market.

Retail Sell-Through Outperforms Expectations

Early-season sell-through at major retail partners is running ahead of management expectations, suggesting end-demand is healthier than headline revenue trends. This outperformance comes even as the company intentionally curbs sell-in, a dynamic that should help normalize channel inventories and reduce future volatility.

Steep 2026 Revenue Drop Reflects Strategic Pullback

For fiscal 2026, Traeger guided revenue down sharply to $465 million to $485 million, implying roughly a 15% decline from 2025 at the midpoint. The company tied the drop primarily to Project Gravity channel exits, winding down direct-to-consumer operations, exiting Costco roadshows, and the full impact of prior pricing on elasticity.

Category and Quarterly Revenue Under Pressure

Q4 revenue fell 14% year over year to $145 million, with core “grow” grill sales down 22% to $61 million and accessories down 18% to $49 million. Management pointed to tariff-driven price sensitivity, a mix shift away from higher-priced items, and MEATER underperformance as the main drags on category results.

Tariffs and Mix Weigh on Gross Margins

Reported Q4 gross margin compressed to 37.4%, 350 basis points below last year, while adjusted gross margin, excluding $3 million of Project Gravity costs, was 39.5%, down 130 basis points. For fiscal 2026, the company is guiding gross margin to 38%–39%, incorporating about 120 basis points of pressure from tariffs and volume deleverage.

MEATER Struggles Add to Accessories Weakness

The MEATER probe business remains a sore spot, challenged by intense competition and elevated inventory across markets. Traeger has shut its U.K. MEATER operation and folded the unit into its Salt Lake City infrastructure but expects continued pressure and inventory cleanup in 2026, weighing on accessories.

Net Loss Widens Despite Adjusted Profit Gains

While adjusted metrics improved, GAAP results deteriorated, with Q4 net loss deepening to $17 million from $7 million a year ago and loss per diluted share expanding to $0.13 from $0.05. Management acknowledged this near-term earnings volatility even as it emphasized the structural cost improvements underpinning future profitability.

Sell-In Cutbacks Create Short-Term Revenue Drag

Management highlighted a growing gap between sell-through and sell-in for 2026, with end-demand set to improve while shipments into the channel decline. The company accelerated orders in 2025 to mitigate tariff risk and is now prioritizing in-channel inventory normalization, decisions that depress near-term revenue but aim to stabilize the system.

Leverage Still High as Transition Unfolds

Although net debt ticked down to $384 million and remains below covenant thresholds, Traeger’s leverage is still substantial relative to its earnings base. The company is relying on Project Gravity savings, tighter working capital, and improved free cash flow to gradually de-risk the balance sheet through the transition.

Guidance Points to Transitional 2026, Better Cash Flow

For 2026, Traeger forecasts revenue of $465 million to $485 million, adjusted EBITDA of $50 million to $60 million, gross margin of 38%–39%, and at least $30 million of free cash flow, supported by about $50 million in Project Gravity benefits. First-quarter guidance calls for $92 million to $97 million in revenue and $3 million to $7 million in adjusted EBITDA, with sell-through expected to outpace sell-in as the company realigns inventory and positions for margin expansion in 2027 and 2028.

Traeger’s earnings call painted the picture of a company accepting a step back in sales to build a more profitable and cash-generative foundation. Investors will need to look past the headline revenue decline and elevated leverage, focusing instead on cost savings, recurring consumables strength, and a cleaner channel setup that could support higher-quality growth in the years ahead.