Traeger Q3 Revenue Falls 40%, Full-Year Guidance Ranges Narrowed

Traeger Inc. (NYSE: COOK) reported a 40.4% year-over-year decline in third-quarter fiscal 2026 revenue and moved to an adjusted EBITDA loss, as some activity shifted into the fourth quarter. The company narrowed its full-year revenue and adjusted EBITDA guidance while keeping the midpoint of both ranges unchanged, and said it expects revenue and adjusted EBITDA to return to growth in the fourth quarter.

Revenue for the quarter ended September 30 fell to $74.7 million from $125.4 million a year earlier. Grills, which accounted for 53.2% of quarterly revenue, posted the largest decline: sales dropped 48.1% to about $40 million from $77 million. Consumables revenue decreased 23.1% to approximately $19 million, while accessories revenue fell 34.1% to about $16 million.

Management said third-quarter revenue was at the low end of the pacing outlined in the prior quarter, with some shipments and other activity moving into the fourth quarter. Traeger said it believes underlying consumer demand is healthier than reported revenue indicates, particularly at more accessible price points.

Profitability weakens, but cash flow remains positive

Gross profit declined to $25 million from $49 million, while gross margin contracted to 33.5% from 38.7%. Adjusted EBITDA was a loss of $3.3 million, compared with positive adjusted EBITDA of $13.8 million a year earlier. The adjusted EBITDA margin fell to negative 4.4% from 11.0%.

The GAAP net loss narrowed to $28.5 million from $89.8 million in the prior-year quarter, which included a $74.7 million goodwill impairment. Adjusted net loss improved to $18.7 million from $22.3 million, although the adjusted net loss margin widened to 25.0% from 17.8% because of the lower revenue base.

Traeger generated $8.4 million of free cash flow during the quarter, bringing free cash flow for the first nine months of fiscal 2026 to $49.4 million. Quarter-end liquidity was $167 million, unchanged from the year-earlier period. The company had $68 million in cash and had not drawn on its $82.5 million revolving credit facility.

Net debt declined to $335 million from $398 million a year earlier. Management said balance-sheet health remains a priority, supported by ongoing profitability measures.

Full-year ranges narrowed around unchanged midpoints

Traeger now expects fiscal 2026 revenue of $440 million to $460 million, compared with its previous range of $435 million to $465 million. The company attributed the narrower range to increased visibility, including the expected recovery of shipments delayed from the third quarter and initial product load-ins connected with its distribution expansion at Lowe’s.

Adjusted EBITDA is projected at $59 million to $65 million, narrowed from the previous $57 million to $67 million range. The gross-margin outlook remains 40% to 41%, and Traeger continues to expect at least $30 million of free cash flow, supported by year-to-date cash generation and working-capital efficiency initiatives.

Project Gravity remains on track to provide an additional $30 million of value capture in 2026 and a cumulative impact of $50 million, according to the presentation. Traeger said the initiative has produced a simpler operating model, strengthened its balance sheet and increased its capacity to invest in consumers and retail partners.

The company expects broader distribution and fourth-quarter activity delayed from the third quarter to support a return to revenue and adjusted EBITDA growth in the fourth quarter. Looking further ahead, management expects a national Lowe’s launch in spring 2027 and said that wider distribution, together with the Westwood and Irontop products, should expand access to the Traeger brand. The company expects to return to profitable growth in fiscal 2027, with both revenue and adjusted EBITDA increasing.

Those expectations remain subject to several uncertainties. Traeger identified risks including the realization of Project Gravity savings, execution of the Lowe’s expansion, consumer demand, dependence on three major retailers, tariffs and potential tariff-refund repayments, product quality and warranty claims, supplier concentration, international operations, competition and its ability to refinance or extend debt before maturity.