Traeger Boosts Full-Year Outlook on Improved Grill Demand — Market Talk

Traeger reported $168.47 million in revenue for the quarter ended June 2024, representing a year-over-year decline of 1.8%. EPS of $0.06 for the same period compares to $0.04 a year ago.

The reported revenue represents a surprise of +0.84% over the Zacks Consensus Estimate of $167.07 million. With the consensus EPS estimate being $0.06, the company has not delivered EPS surprise.

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.

Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.

Here is how Traeger performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

• Net sales- Grills

  : $95 million versus the three-analyst average estimate of $84.76 million. The reported number represents a year-over-year change of +2%.

• Net sales- Consumables

  : $33.80 million compared to the $36.07 million average estimate based on three analysts. The reported number represents a change of -3.2% year over year.

• Net sales- Accessories

  : $39.70 million compared to the $45.55 million average estimate based on three analysts. The reported number represents a change of -8.7% year over year.

View all Key Company Metrics for Traeger here>>>

Shares of Traeger have returned -3.6% over the past month versus the Zacks S&P 500 composite's -6.7% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.

Zacks Investment Research

Traeger came out with quarterly earnings of $0.06 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.04 per share a year ago. These figures are adjusted for non-recurring items.

A quarter ago, it was expected that this barbecue grill maker would post earnings of $0.04 per share when it actually produced earnings of $0.04, delivering no surprise.

Over the last four quarters, the company has not been able to surpass consensus EPS estimates.

Traeger, which belongs to the Zacks Consumer Products - Discretionary industry, posted revenues of $168.47 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 0.84%. This compares to year-ago revenues of $171.51 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Traeger shares have lost about 21.3% since the beginning of the year versus the S&P 500's gain of 8.7%.

What's Next for Traeger?

While Traeger has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Traeger: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.07 on $112.8 million in revenues for the coming quarter and $0.03 on $591.46 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Consumer Products - Discretionary is currently in the bottom 31% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the same industry, Funko-A , is yet to report results for the quarter ended June 2024. The results are expected to be released on August 8.

This company is expected to post quarterly loss of $0.14 per share in its upcoming report, which represents a year-over-year change of +67.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Funko-A's revenues are expected to be $231.8 million, down 3.4% from the year-ago quarter.

Zacks Investment Research

Q2 2024 saw grill revenue growth, gross margin expansion to 42.9%, and Adjusted EBITDA up to $27M. FY 2024 guidance was raised for revenue, margin, and EBITDA, with new products and global growth supporting the outlook.

Original document: Traeger, Inc. [COOK] Slides Release — Aug. 6 2024