Zach Beck

Zach Beeck asked for more details on the additional savings from Project Gravity, specifically regarding SKU rationalization efforts and categories addressed. He also questioned the dynamics of pricing elasticity from prior actions and how consumer response influences Traeger's innovation plans for 2026 and beyond.

Answer

Jeremy Andrus, CEO of Traeger, detailed that SKU rationalization aims to streamline the product portfolio for manufacturing efficiencies, lower inventory, and clearer consumer decision-making, with certain SKUs being sunset over the next 2-3 years. He acknowledged the challenge of forecasting price elasticity but noted improved understanding, particularly regarding greater elasticity during promotional windows. He mentioned that recent tariff shifts could allow for allocating savings to MSRP reduction, dealer margin support, or reinvestment. Andrus clarified that product strategy isn't built around short-term macro trends due to long development cycles, but new sub-$1,000 products launching in Q2 are appropriate for the current environment.

Zach Beeck from Baird asked for more details on Traeger's SKU rationalization efforts under Project Gravity, including specific items or categories targeted. He also inquired about the annualization of pricing elasticity impacts from previous actions and how consumer response to pricing influences current and future innovation plans.

Answer

CEO Jeremy Andrus explained that SKU rationalization aims to streamline the product portfolio for manufacturing and inventory efficiencies, create a clearer consumer decision process, and will sunset certain SKUs over the next 2-3 years. He noted that forecasting price elasticity was challenging but Traeger is getting sharper, feeling good about current pricing, and will evaluate tariff savings allocation. He added that product strategy isn't shifted by macro trends due to long development cycles, but new sub-$1,000 products are launching in Q2 2026, appropriate for the current environment.

Zach Beck, on behalf of Peter Benedict, inquired about YETI's pricing strategy for the current year, seeking details on timing, scope, and expected impact, and also asked about the company's contingency plans for potential tariff relief if the Supreme Court overturns recent policy moves.

Answer

President and CEO Matt Reintjes stated that pricing actions would be similar to the previous year in timing and scope, with CFO Mike McMullen adding that last year's pricing had a roughly 40 basis point impact on gross margin, expecting a similar level this year. McMullen clarified that no tariff relief is currently contemplated in the guidance, emphasizing flexibility to invest in growth initiatives if relief occurs.

Zach Beck asked about the details of YETI's selective price increases for the current year, similar to those implemented in Q2 of the previous year, and inquired about the company's contingency plans or expectations regarding potential tariff relief from the Supreme Court.

Answer

Matt Reintjes, President and CEO, and Mike McMullen, CFO, explained that pricing actions would be similar in timing and scope to the previous year, which had a roughly 40 basis point impact on gross margin. They clarified that any potential tariff relief is not factored into the current guidance due to unknowns in timing and size, and YETI remains focused on driving cost efficiency, top-line growth, and margin expansion.