Traeger Q1 2026 Earnings Call - Tariff Refund Boosts EBITDA, Project Gravity Drives Discipline

Operator: I’ll now hand the conference over to Stephanie Reed, Vice President of Finance, Strategy, and Investor Relations. Please go ahead.

Stephanie Reed, Vice President of Finance, Strategy, and Investor Relations, Traeger: Good afternoon, everyone. Thank you for joining Traeger’s call to discuss its first quarter 2026 results, which were released this afternoon and can be found on our website at investors.traeger.com. I’m Stephanie Reed, Vice President of Finance, Strategy, and Investor Relations at Traeger. With me on the call today are Jeremy Andrus, our Chief Executive Officer, and Joey Hord, our Chief Financial Officer. Before we begin, let me remind you that participants on this call will make forward-looking statements based on current expectations, and those statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in Traeger’s reports filed with the SEC.

This call also contains certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income or loss, adjusted net income or loss per share, adjusted gross margin, free cash flow, and net debt, which we believe are useful supplemental measures. The most comparable GAAP financial measures and reconciliation of the non-GAAP measures contained herein to such GAAP measures are included in our earnings release and investor presentation, which are available on the investor relations portion of our website at investors.traeger.com. Now I’d like to turn the call over to Jeremy Andrus, Chief Executive Officer of Traeger. Jeremy?

Jeremy Andrus, Chief Executive Officer, Traeger: Thanks, Steph, and thank you all for joining our first quarter earnings call. We had a solid start to the year, and I’m encouraged by the signals we’re seeing heading into our peak selling season. Q1 revenue reflects a combination of planned timing, channel decisions, and marketplace dynamics we discussed on our last earnings call, and Joey will walk through those details shortly. Before turning to results, I want to note that we recognize a $12 million P&L benefit in Q1 related to an IEPA tariff refund that was not contemplated in our original outlook, and I’ll address in my guidance commentary. What I want to focus on today is what we’re seeing in underlying demand, because sell-through is the clearest signal of where the business is headed and of a healthy retail environment.

On today’s call, I’ll cover the consumer and brand, our product launches, and how we’re executing with our key retail partners. I’ll also update you on Project Gravity because the discipline we’re applying in 2026 is foundational to what we’re building for the long term. I’ll turn it over to Joey for financials. Let me start with the consumer and the brand. Even in a cautious spending environment, Traeger brand engagement remains strong, and it continues to be a leading indicator of potential demand. In Q1, social engagement was up over 30% year-over-year, with 65% of our organic impressions coming from non-followers. That matters because expanding household penetration remains one of our largest long-term opportunities, and reaching new consumers is the first step to earning their purchase.

Our brand ambassador roster, including Matt Pittman and Bennie Kendrick, generated 170 million impressions across more than 3,000 posts in the quarter, part of a program that delivers over 1 billion impressions annually. Authentic content that demonstrates the benefits of wood-fired cooking remains one of our most effective demand creation tools. As we head into Q2, we’re expanding that effort with new creators who we believe will reach new consumer demographics. Innovation has always been core to Traeger, and it continues to be rewarded when we execute with focus. In April, we launched Westwood, a new grill lineup designed to cascade Traeger innovation into a more accessible segment of the market, bringing the Traeger experience to more households at a lower entry price while keeping the connected capabilities, performance, and seven-year warranty that define the platform.

We believe the Westwood launch is an early proof point of brand momentum. We shifted to a platform-specific customized content model, generating over 60% more impressions across earned and organic channels when compared to our Woodridge product launch in 2025. One thing was consistent: reviewers specifically called out the combination of Traeger performance and the accessible price point. The product also launched into retail with consumer ratings of 4.8 to 5 stars already live across traeger.com, The Home Depot, and Ace Hardware. That kind of credibility at the moment of purchase matters. It’s early. We have only a few weeks of data, what we’re seeing so far is encouraging. Later this month, we’ll also begin landing Irontop, our new griddle lineup, in retail. Strategically, this is an important expansion for Traeger.

Irontop brings Traeger innovation into a more accessible griddle price tier where we have not historically competed, unlocking a larger segment of the category and broadening our reach to new consumers. It’s a direct response to consumer feedback. Better build quality, more even heat, and more reliable results. With 2 and 4 burner options across key price points and clear feature differentiation. Strategically, Irontop broadens Traeger’s relevance beyond the traditional grill replacement cycle and into more frequent everyday cooking occasions, which we believe will support greater household reach and longer-term category participation. Across both Westwood and Irontop, we’re pairing product innovation with disciplined execution, including targeted marketing, retail readiness, and training to help support these launches where it matters most, at the shelf and at the point of sale. Turning to the marketplace, the signal we’re watching most closely as we head into peak season is sell-through.

We view sell-through as the clearest measure of underlying consumer demand, and we believe healthy sell-through supports a healthy marketplace for both Traeger and our strategic retail partners. Year to date, early season demand is encouraging. Sell-through is tracking slightly above our expectations and excluding strategic channel divestments from our DTC and Costco Roadshow businesses is slightly up year-over-year. While we’re always careful about drawing conclusions from short periods, at this point, we have not seen indications thus far for a broad-based slowdown tied to the macro environment. At The Home Depot, our success with this key strategic partner has been amplified by our retail sales specialist program, a dedicated field team that trains store associates and facilitates in-store product demonstrations featuring food cooked on a Traeger.

We believe the ability for consumers to see the product in action and taste the flavor is a meaningful driver of conversion. We know this model has worked for us. Last year, stores supported by our retail sales specialists converted at meaningfully higher rates than those without. We’re expanding that playbook this year, targeting at least 7,500 cooking events in Q2, which is almost twice the number we did in the same quarter of 2024 as we support both Westwood and Irontop through peak season. At Ace, we’re investing in approximately 1,000 elevated doors to support these launches, including enhanced store positioning, window signage, and floor stands. This is the first time we’ve brought a new grill platform and a new griddle platform to market simultaneously, giving consumers more compelling and accessible options at the point of decision. We’re seeing momentum.

At Ace’s Spring 2026 show, pre-book orders were up nearly 50% over last year, reinforcing our confidence in the partnership for the long term. Stepping back, 2026 is a year of disciplined execution, and Project Gravity is central to that work. Gravity is a multi-year effort to reshape this business, not just take out costs, but to simplify how we operate, sharpen where we compete, and build a more durable profit model. Just as importantly, it creates a capacity to invest in the things that matter the most, product innovation, brand, and retail execution. As a reminder, we’ve executed the majority of our phase 1 and phase 2 actions, including organizational changes, MEATER centralization, exiting the Costco Roadshow, and winding down DTC commerce.

Within phase 2, we’ve identified additional value capture around SKU rationalization and pricing that we believe will yield a simpler product architecture and a structurally higher margin business as we move through 2027 and 2028. Taken together, Project Gravity is expected to deliver approximately $64 million to $70 million of total run rate value across both phases. We believe our discipline strategy is working, and it’s what allows us to invest with confidence behind the brand and product while delivering on our financial commitments. Put simply, Gravity is about applying a discipline return-focused lens to how we run the business, improving margins, cash generation, and long-term earnings power. Before I close, I want to flag one item. We recognize a $12 million benefit in Q1 related to an IEPA tariff refund that was not contemplated in our original guidance, a welcome development.

We are flowing that benefit through to our full-year adjusted EBITDA guidance, which we are raising to a range of $57 million-$67 million while holding our revenue guidance unchanged. At the same time, we are holding an offset within our guidance to account for continued competitive pressure from MEATER, ongoing macro headwinds, including rising transportation costs due to oil prices and broader tariff uncertainty. We’ll reassess those factors on our Q2 call as we gain greater visibility into how these dynamics are evolving. Our core Traeger business is strong, and our priorities are clear. Drive brand momentum, convert demand through excellent retail execution, expand household reach with the right product at the right price points, and continue running the business with the discipline that Project Gravity instills. We’re entering peak season with a strong brand, strong partners, and a team that is executing well.

I’m encouraged by what I’m seeing. With that, I’ll turn the call over to Joey Hord. Joey?

Joey Hord, Chief Financial Officer, Traeger: Thanks, Jeremy, and good afternoon, everyone. Before I walk through the numbers, I want to anchor on something important. We are doing what we said we would do, and Project Gravity is working. In the first quarter, we delivered $15 million of year-over-year operating expense reduction, reduced inventory by 31% versus the prior year, and generated $14.5 million of free cash flow. Those results reflect disciplined execution against our commitments and reinforce that financial health remains our top priority. Against that backdrop of improved financial discipline, it is also important to touch briefly on demand. As Jeremy discussed, underlying demand remains intact, with first quarter sell-through tracking slightly above our expectations as we head into the peak selling season.

With that as context, a quick reminder that our first quarter guidance contemplated challenging year-over-year comparables and timing shifts that would weigh on revenue, as well as lower margins on the back of mix shifts and promotional timing. The quarter developed largely as we expected. I also want to briefly frame the IEPA tariff refund Jeremy referenced, as it is material to the quarter’s results. In Q1, we recognized a $12.4 million benefit to gross profit and adjusted EBITDA, and a $3.2 million reduction in inventory carrying cost, and recorded a $15.6 million receivable, all related to the refund of duties paid under IEPA. Where relevant, I’ll call out the impact of this item alongside our underlying results. Excluding this refund, our adjusted EBITDA would have been near the midpoint of the guidance range for the first quarter.

First quarter revenues declined 34% to $94 million. Rural revenues decreased 45% to $47 million, driven primarily by four key drivers. 1, difficult prior year launch comparisons. 2, pull forward ordering ahead of tariffs last year. 3, deliberate channel optimization under Project Gravity. 4, continued mix shift toward lower price grills. Consumables revenues decreased 14% to $26 million, primarily from wood pellet channel mix shifts and timing of trade spend, partially offset by an increase in units. Accessories revenues decreased 22% to $21 million, primarily due to lower sales in MEATER. Gross profit for the first quarter decreased to $43 million from $59 million in the first quarter of 2025.

Gross margin was 45.7%, up 420 basis points versus the first quarter of 2025, which includes a $12.4 million benefit from the IEPA tariff refund. Excluding this item, gross margin was 32.6%, down 890 basis points, reflecting timing of trade spend, lower mix of direct import sales, tariff-related costs, and deleverage in MEATER. Sales and marketing expenses were $13 million compared to $22 million in the first quarter of 2025. The decrease was driven by lower employee-related expense, reductions in discretionary operating overhead, as well as lower demand creation costs and professional service fees, reflecting cost reduction actions associated with Project Gravity. General and administrative expenses decreased to $19 million compared to $25 million in the first quarter of 2025.

The decrease was driven by a reduction in stock-based compensation expense as well as employee-related costs. Net income for the first quarter was $3 million as compared to a net loss of $1 million in the first quarter of 2025. Net income per diluted share was $1.08 compared to a loss of $0.30 in the first quarter of 2025. Adjusted net income for the quarter was $4 million or $1.49 per diluted share as compared to the Adjusted net income of $7 million or $2.54 per diluted share in the same period of 2025. Adjusted EBITDA was $17 million in the first quarter as compared to $23 million in the same period of 2025. This includes a benefit of $12.4 million from the IEPA tariff refund. Moving on to the balance sheet.

At the end of the first quarter, cash and cash equivalents pulled $34 million compared to $20 million at the end of the previous fiscal year. We ended the quarter with $403 million in pulled debt and nothing drawn on our credit facilities, resulting in total net debt of $370 million. From a liquidity perspective, we increased our first quarter total liquidity to $184 million. Inventory at the end of the first quarter was $88 million compared to $99 million at the end of the fourth quarter of 2025 and $127 million at the end of the first quarter of 2025. Lower year-over-year inventory was primarily driven by in-transit timing, MEATER inventory reductions, and strategic reductions associated with Project Gravity.

Despite the revenue and margin headwinds in the quarter, we continued to focus on disciplined execution. We finalized several Project Gravity initiatives, including the wind down of Costco Roadshow and our DTC business, which contribute to a meaningful operating expense reduction and a 31% year-over-year reduction in inventory. That discipline helped drive $14.5 million in free cash flow in the quarter, including benefits from working capital improvements and an $11.6 million Employee Retention Credit. This represents meaningful progress toward our full-year goal of at least $30 million. As I just mentioned, we maintain ample liquidity with healthy leverage metrics that we expect to sustain through 2026.

Turning to guidance, we are reiterating our full-year outlook for revenue between $465 million and $485 million. We are increasing our adjusted EBITDA guidance to between $57 million and $67 million, reflecting the flow-through of the IEPA tariff refund benefit recognized in Q1 with an offset held within our guidance to account for continued MEATER competitive pressure, macro headwinds, including rising transportation costs due to oil prices and broader tariff uncertainty. We are also increasing our gross margin outlook to 39.5% to 40.5%, incorporating that same benefit and offset along with the same structural factors we discussed last quarter, including tariff pressure, promotional deleverage, and continued benefit from Project Gravity. We will reassess these dynamics on our Q2 call as visibility improves.

Free cash flow guidance remains unchanged at greater than $30 million and does not reflect the tariff refund. The $15.6 million IEPA receivable has not yet converted to cash. We will update our free cash flow outlook once that conversion occurs. The underlying drivers we discussed last quarter remain unchanged. Benefits from Project Gravity offset by price elasticity, marketplace inventory headwinds, and MEATER challenges. We still expect first half seasonality to be broadly consistent with historical patterns. Finally, our full year guidance continues to reflect approximately $50 million of Project Gravity value capture, including roughly $30 million of incremental benefit in 2026, reinforcing continued progress against our cost and margin objectives. As we navigate this transition year, we continue to believe that we have a robust liquidity.

We are currently undrawn on our $112.5 million revolver, and based on our current expectations, we do not anticipate using our revolver this year. In summary, the underlying strength of our core Traeger business gives us confidence as we manage through this 2026 transition. We are seeing the tangible benefit in our results of Project Gravity reshaping our cost structure and cash generation. Category demand remains intact, with sell-through slightly above our plan year to date. We believe the actions we’re taking position the business for improved profitability and operating leverage beyond 2026. With that, I’ll turn the call over to the operator. Operator?

Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Peter Benedict from Baird. Your line is open. Please go ahead.

Peter Benedict, Analyst, Baird: Oh, hey, guys. Thanks, thanks for taking the question. A couple here. I guess first, do you have a, when do you expect the tariff refund to be paid out? How much visibility do you have into the timing of that? Secondly, can you talk a little more about the fuel cost assumptions that are in the forecast now, kinda where they sit, maybe what that impact was relative to what was in there, 90 days ago? Thank you.

Joey Hord, Chief Financial Officer, Traeger: Yeah. Hey, Peter, it’s Joey. Thanks for the question. Overall, we have the ability to book this in Q1. We were given that leeway, we broadly speaking, took it to P&L. We do have some additional potential on the balance sheet right now in terms of total refund. As far as we expect the cash, we do expect it to be paid within 60-90 days. This is widely thought through in terms of, you know, other CFOs I’ve spoken to. With that said, I do think at the same time, we need to be prudent in our plan this year. Overall, I do believe that our AR balance right now is appropriately reflecting our refunds.

The other thing I wanna say about this, Peter, is around fuel cost. We have around $1 million of increased fuel cost this year regarding macro. We also wanna be prudent in our planning around just the ongoing tariff exposure we have. Our tariff rate has bounced around, but we also wanna be prudent in our plan in the out months.

Peter Benedict, Analyst, Baird: Okay. No, that’s helpful, Joey. I guess my follow-up would be just around the improved sell-through, obviously, good to hear that. I’m curious if you guys, I know it’s only been a little bit here in the peak selling season, but what you think might be driving that. Do you think it’s kind of the whole, you know, grill category starting to pick up a little bit? Is there anything, maybe unique within wood pellet that’s taking share or Traeger taking share? Again, maybe not trying to be too nuanced. Related to that, just the promotional tone that’s out there, what role do you think that is playing in the improved sell-through? What your thoughts are there. Thank you.

Joey Hord, Chief Financial Officer, Traeger: Yeah, Peter, happy to take that. Let me start first with sort of the macro. You know, it’s a continues to be a challenging macro and we’ve certainly seen some high ticket sort of appliance brands report challenges, you know, related to replacement cycles and, you know, continued pressure on with interest rates on housing relocation and whatnot. And of course, consumer sentiment was an all-time low in April. I think with that backdrop, we feel pretty good about the sell-through results that we’re seeing. And I think it’s, you know, it is it speaks to the health of the brand and our ability to perform in an environment like this

Jeremy Andrus, Chief Executive Officer, Traeger: It also might begin to speak to the broader category, which has been meaningfully down post-pandemic and even down relative to pre-pandemic unit sell-through numbers. You know, as we track replacement cycle, we may be seeing a little bit there. In terms of the broader grilling category, we believe outdoor cooking is slightly down. As we evaluate our sell-through, excluding the channels of which we have divested, notably Costco Roadshow and DTC, we think our share is slightly up. I don’t know that there are any sort of strong macro or category trends. I think our brand and our team is executing well in a challenging environment.

You know, it’s, although we certainly like to see positive positive signals to this point in the year. Of course, there’s a lot that happens in the second quarter and, you know, we’re cautiously optimistic. Great. Thanks so much. Good luck, guys. Thanks, Peter.

Operator: Your next question comes from the line of Anna Glaessgen from B. Riley. Please go ahead.

Anna Glaessgen, Analyst, B. Riley: Hi, good afternoon. Thanks for taking my questions. I guess I’d like to start on follow-up on the IEPA tariff assumptions. Is the $12 million reflecting the full amount you’ve paid thus far while, like, that rule was in place? Are you assuming essentially a full recovery? Thanks.

Joey Hord, Chief Financial Officer, Traeger: Yeah. Hey, hey, Anna. Overall, we have just around $15 and a half million of total IEPA tariff refund that we feel we’re due. We’ve taken the $12.4 million in Q1, which is reflected. The way that we account for this going forward is, as we sell in inventory and that has been impacted by tariffs, we’ll continuously book that in the P&L. We do feel there’s going to be around $1 and a half million this fiscal year. Our total FY 2026 expected impact is just off of $14 million.

Anna Glaessgen, Analyst, B. Riley: Got it. Thanks. Turning to consumables, wondering if you could unpack the decline a bit more that we saw in the quarter. Do you expect that this dynamic would persist into subsequent quarters, or are you expecting an inflection embedded in the guidance for the full year at some point in the year? Thanks.

Joey Hord, Chief Financial Officer, Traeger: Yeah, I mean, the consumables is largely consistent with the rest of our portfolio regarding just the timing shifts year over year. There’s really a few main drivers of revenue declines, broadly speaking. First is just prior tariff, or, sorry, elasticity, built into our pricing, just some of the Gravity channel shifts. We’ve divested of Costco Roadshows and our DTC channel. That’s impacting, broadly speaking, all of our portfolio. Consumables is not immune to that. The other is just attach. That’s on the consumable side.

Anna Glaessgen, Analyst, B. Riley: Got it. I guess as a follow-up, could you share maybe sell-through on consumables in a similar way that you gave grills, just to get a sense of the underlying demand?

Joey Hord, Chief Financial Officer, Traeger: Sorry, can you repeat that?

Anna Glaessgen, Analyst, B. Riley: Oh, sorry. Could you share POS on consumables or pellets, so we have a better idea of underlying demand, similar to how you gave grills kind of stripping out the channel exits?

Joey Hord, Chief Financial Officer, Traeger: Yeah. Yeah. Sell-through is actually going according, if not above our plans. We’re really happy with sell-through on consumables, largely pellets. It’s an indication of engagement with our brand and our overarching product. So consumable sell-through is strong, like I said, going according, if not above plan. As we’ve spoken about in previous calls, we have a sell-through, sell-in dynamic here, which is reflected in net revenue. Overall, sell-through tracking according to plan.

Anna Glaessgen, Analyst, B. Riley: Okay, great. Thanks.

Operator: Your next question comes from the line of Joe Feldman from Telsey Advisory Group. Please go ahead.

Joe Feldman, Analyst, Telsey Advisory Group: Yeah, thanks for taking the questions, guys. I’m gonna go to another one on IEPA refund. How are you sharing that with suppliers? ’Cause it seems like you guys are booking it all for yourself, and my assumption would be that suppliers and then even the retailers may want some portion of that, you know, because of price increases and such. We’ve heard a lot of other retailers talk about having to kind of balance that out. I’m curious how you guys are thinking about that as kind of first question.

Joey Hord, Chief Financial Officer, Traeger: I’ll start and then Jeremy can jump in on this one. The figures I’ve quoted are what we are due based on tariffs that we have been burdened by. As you know, we have a material amount of our business is direct import. Our partners that do direct import are paying IEPA tariffs as well. We have been in communication with those partners around just their ability to recapture that as well. Do you wanna add anything to that?

Jeremy Andrus, Chief Executive Officer, Traeger: Yeah. Look, the reality is that, where we do a meaningful direct import business, we of course build wholesale pricing with a tariff payment in mind paid by the importer, which is our partner. That of course is a larger number than the figures that Joe is sharing. You know, of course, we felt some volume reduction due to elasticity with the higher prices and certainly felt some margin. You know, sharing of that of those tariff refunds is a conversation that we’ll have with our direct import partners, we’ll see where that goes.

Joe Feldman, Analyst, Telsey Advisory Group: Got you. Thank you, guys. Maybe just a quick follow-up. inventory, you know, it’s quite low, as you mentioned. You gave a few reasons as to why, Joey. I’m curious if that should bubble back up closer to, like, $100 million as the year progresses or how we should think about that going forward, what level you kinda wanna be at.

Joey Hord, Chief Financial Officer, Traeger: Yeah. I’m actually really happy with our progress, just our overall inventory management. As we’ve spoken about, Project Gravity is really about driving profitability efficiency throughout the P&L, but also within just efficiency of the balance sheet. We’ve invested heavily around demand planning capabilities, focused on marketplace health, demand supply match, et cetera. Overall inventory, we’ve worked it down to what I consider a healthy level. I’m really happy around our inventory levels on the Traeger side. The other is as we shifted to DI, back to DI, it has taken pressure off the Traeger inventory. As you recall, there was a pause on DI when the tariffs were announced in prior year.

significant focus on overall inventory. The one soft spot we do have in our overall inventory is MEATER, which we’ve spoken about before. There’s a focus on bringing the MEATER inventory levels down. We’re gonna be revisiting pricing on MEATER, et cetera, and that will alleviate pressure on inventory for MEATER specifically.

Joe Feldman, Analyst, Telsey Advisory Group: Got it. That’s very helpful. Thanks, Joey. Good luck with this quarter, guys.

Operator: Your next question comes from the line of Philip Lee from William Blair. Please go ahead.

Philip Lee, Analyst, William Blair: Jeremy and Joey, thanks for the question. How should we think about the phasing of gross margin this year? There are a lot of moving pieces between changes in tariffs, higher transportation costs, now the IEPA refund. Any color there would be helpful. Does your guide embed the lower tariff rates? I believe current average rates are about 5%-ish lower than what was in your original guide. Is that still the case here?

Joey Hord, Chief Financial Officer, Traeger: Yeah. It is challenging to plan margin just in terms of year-over-year comps and the activity that happened within FY 2025 as the base year, given the pause of DI and tariffs, et cetera, pricing shifts. Regarding overall margin, we have spoken around the shaping of the P&L first half and second half. We do have a, what we’re considering a trough in our margin rate in Q1. We believe that there’s gonna be a rebound of margin in Q2, and then normal cyclicality around our margin for Q3 and Q4. As far as our overall margin rate, it’s capturing our guidance, which, you know, we’ve adjusted for the IEPA refund.

As far as full year, I’ll just say the following is, we do believe that we have a lot of conviction on guidance overall, and yeah, I’ll just stop there.

Philip Lee, Analyst, William Blair: Okay. Okay, great. Then maybe can you talk a bit about demand by price tier? I think now you have the Irontop and Westwood series that are new and, you know, leaning into these lower entry-level price points. Do you think there’s any room or, I guess, need for you to go any lower? Is this kind of at your sort of ideal entry point, and then you’ll look to keep moving up from there? Thank you, guys.

Jeremy Andrus, Chief Executive Officer, Traeger: Yeah, happy to take that. First of all, this is a more price-sensitive environment, and it has been. We have flagged a movement towards lower price points over the last 12 months or so on our earnings calls. I certainly believe the timing is right for the 2 product platforms that we just launched, both of which are hitting opening price points for our brand, the Irontop, in terms of getting a griddle SKU to market with very high quality and innovation at $499. That although it was concepted well before we saw the shift to lower price points, the timing works well.

I would say the same thing for the Westwood, which really is a multi-year process of launching innovation at higher price points and then cascading innovation downstream that both consumers value but also that we can affordably deliver at those price points. The Westwood is a, you know, a $599 price point, which is the lowest price point at which we’ve ever offered a connected grill product. We feel good about that. Overall, Traeger continues to meaningfully over-index relative to the category from an ASP perspective, which again speaks to brand strength.

Certainly not immune from some of the pressures that the consumer’s feeling and we have felt a bit of that mix shift downward. With that said, we’re seeing some nice green shoots from a price perspective. One analog I would share is the Woodridge Pro, which was originally concepted to be a $999 product.

Joey Hord, Chief Financial Officer, Traeger: A price point that our brand has historically sold well. It launched just as tariffs were hitting, and that is now a $1,149 product. We’re seeing really nice sell-through dynamics at a very high price point relative to the industry. We will continue to build a product line that is thoughtfully concepted and motivates a consumer to trade up to the extent that they could both afford it and value those trade-up features and benefits. Over time, that will work in our favor as the consumer strengthens and some of the macro dynamics improve.

Philip Lee, Analyst, William Blair: Excellent. Thank you, guys. Best of luck.

Joey Hord, Chief Financial Officer, Traeger: Thanks.

Operator: A reminder, if you would like to ask a question, please press star one on your telephone keypad. Your next question comes from the line of Craig Remsen from Wells Fargo. Please go ahead.

Craig Remsen, Analyst, Wells Fargo: Good evening, guys. Just two quick ones here. I know in Q3 call, and I think Q1, you know, you kind of mentioned you had a goal of being all your production out of China by year-end 2026, and I know tariffs are moving all over the place. Kinda where do we stand on that, and is that still your intention to try to move production to Vietnam, or are you kind of standing pat until you get more clarity on that? Then also, if you could touch on the April 2026 Section 232 tariff provision, where it became more of a finished product tax, if that affects you in any way, shape, or form. If it has, if you could just kind of expand on that’d be great. Thank you.

Joey Hord, Chief Financial Officer, Traeger: Hi. As far as our diversification efforts, when tariffs were announced, the overall tariff rate coming out of China was much higher than other countries of origin. We spoke about materially diversifying out of China by the end of FY 2026, and we were underway. Subsequently, tariff rates have obviously shifted materially. Our overall tariff rate has come down, and now we see parity between our countries of origin. What that’s allowed us to do is be long-term thoughtful and strategic in our diversification strategy. To be clear, our goal is to continue to diversify outside of China. With that said, we’re being more long-term and strategic about it. As far as our tariff rates go, our tariff rates have bounced around.

In the latest announcement, we have a 25% tariff on the Section 232 steel tariff. With that said, our tariff rate currently is at how we planned the year. We’ve had no material change in our tariff rate from our last call.

Craig Remsen, Analyst, Wells Fargo: Okay. Thank you. Basically the April finished product tax, it was still 25%. It continues to be, no real change there.

Joey Hord, Chief Financial Officer, Traeger: Yeah. There was a reduction in, for a few weeks in our tariff rate. It came back to the original tariff rate that we had planned at the start of the year.

Craig Remsen, Analyst, Wells Fargo: Appreciate it. Thank you.

Operator: At this time, there are no further questions. I will now turn the call back to Jeremy for closing remarks.

Jeremy Andrus, Chief Executive Officer, Traeger: Thanks. We appreciate the conversation and look forward to being in touch.

Operator: This concludes today’s call. Thank you all for attending. You may now disconnect.