Research Update: Traeger Inc. Outlook Revised To Negative On Weak Fiscal 2021 Results And Higher Leverage; Ratings Affirmed

Salt Lake City-based outdoor grill manufacturer Traeger Inc. reported weaker-than-expected operating results in fiscal 2021, including severe freight cost inflation. We anticipate profitability will be further pressured in 2022, pushing leverage above 6x at year end. As a result of these factors, we revised our outlook to negative from positive and affirmed all our ratings on the company, including our 'B' issuer credit rating. We also withdrew the ratings on TGP Holdings as Traeger Inc. is now public filing financial statements following last year's IPO The negative outlook reflects the increase in leverage, particularly in the first two quarters of the year, and the potential for grill demand faltering amid inflation pressure that will likely hurt discretionary consumer spending. We

...- Salt Lake City-based outdoor grill manufacturer Traeger Inc. reported weaker-than-expected operating results in fiscal 2021, including severe freight cost inflation. We anticipate profitability will be further pressured in 2022, pushing leverage above 6x at year end. - As a result of these factors, we revised our outlook to negative from positive and affirmed all our ratings on the company, including our 'B' issuer credit rating. - We also withdrew the ratings on TGP Holdings as Traeger Inc. is now public filing financial statements following last year's IPO - The negative outlook reflects the increase in leverage, particularly in the first two quarters of the year, and the potential for grill demand faltering amid inflation pressure that will likely hurt discretionary consumer spending. We could lower the rating if the company underperforms such that we expect S&P adjusted leverage will remain above 6.5x over the next 12-18 months....

Research Update