Tear Sheet: Traeger Inc.

The company raised both its revenue and EBITDA guidance for 2023 due to slightly better-than-expected demand at its key retail partners. While Traeger's revenue declined 14% year over year during the second quarter, the rate of decline has improved significantly from the 32% year-over-year drop it reported in the first quarter. We expect the company will increase its revenue in the second half of the year after the majority of the channel inventory de-stocking has been completed. Traeger?s S&P Global Ratings-adjusted leverage for the 12 months ended June 30, 2023, was 13.8x, which is down from 16.8x in the previous quarter. We project the company will continue to improve its leverage to about 10x as of the end of 2023.

...August 28, 2023 While the consumer demand for grills remain challenged, Traeger's second-quarter results could indicate that declines in channel inventory will lead to a rebound in its sales. The company raised both its revenue and EBITDA guidance for 2023 due to slightly better-than- expected demand at its key retail partners. While Traeger's revenue declined 14% year over year during the second quarter, the rate of decline has improved significantly from the 32% year- over-year drop it reported in the first quarter. We expect the company will increase its revenue in the second half of the year after the majority of the channel inventory de-stocking has been completed. Although the company's stronger cash flow generation and potentially rebounding revenue will likely lead to a modest improvement in its credit measures, its leverage remains high and its covenant cushion will be tight if it triggers its leverage covenant by taking on additional debt. Traeger's S&P Global Ratings-adjusted...

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