COOK: EPS Aftermath – Incremental Headwinds/Caution Limiting Tariff Refund Upside

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COOK: EPS Aftermath – Incremental Headwinds/Caution Limiting Tariff Refund Upside

Traeger, Inc.

Continued ... higher oil prices (estimated at ~$1M incremental Y/Y) and broader consumer

demand uncertainty given all-time-low April consumer sentiment, and 3) broader tariff

uncertainty in the out-months, with management noting that tariff rates have been volatile

throughout the year and that prudent planning requires cushion for potential future rate changes

even as the current rate (~25% on Section 232 steel) is in line with original assumptions. 2)

Underlying Margins – Stripping the $12.4M IEEPA refund, gross margins were 32.6% (cons.

37.1%), -890 bps Y/Y. The drivers include unfavorable timing of trade spend, lower direct import

mix, ongoing tariff costs, and MEATER fixed cost deleverage. 1Q'26 represented a trough in

margins according to management, and the underlying profitability of the business in Q1 was

materially weaker than the headline 45.7% implies. 3) MEATER Softness – MEATER continues

to underperform across multiple dimensions: Accessories revenue fell -21.8% primarily due

to lower MEATER sales, MEATER contributed to fixed cost deleverage in gross margins, and

MEATER inventory levels remain elevated and are described as the one soft spot in the company's

otherwise improved inventory position. Management flagged they are revisiting pricing on

MEATER and noted that competitive pressure in the segment is expected to continue for the full

year, which contributed to the only partial tariff refund flow through to guidance.

Guidance: Management raised its FY'26 adjusted EBITDA and gross margin guidance, flowing

through the $12.4M IEEPA tariff refund recognized in Q1 (total expected FY benefit ~$14M).

Revenue guidance of $465–485M was reiterated.