Traeger Faces Tariff Uncertainty As 80% Of Grills Come From China, Says Analyst

Telsey Advisory Group analyst Joseph Feldman on Friday reiterated a Market Perform rating on the shares of Traeger Inc COOK and lowered the price forecast from $2.50 to $2.00.

Traeger’s first-quarter FY25 performance met expectations, with revenues down 1.1%, surpassing the FactSet consensus of -3.0%.

Adjusted EBITDA of $22.5 million slightly exceeded consensus but was below the company’s target of $24.0 million. Strong grill sales, up 13%, were driven by product launches like the Woodridge series.

However, the company faces uncertainty from tariffs under the new Trump administration, as 80% of its grills are sourced from China, which faces a 45% tariff, according to the analyst.

Traeger has withdrawn its 2025 guidance due to uncertainty around tariff impacts.

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Traeger faces significant tariff challenges, with a 45% tariff on grills from China and a 25% tariff on grills from Vietnam.

Accessories are subject to a 10% tariff from Taiwan, while the consumables business is not impacted. The company plans to offset these costs through cost-saving measures, sourcing diversification, and strategic price increases.

The company is actively managing expenses by freezing hiring, deferring non-essential spending, and exploring additional cost-reduction opportunities for the year.

Traeger aims to shift most Chinese manufacturing to other countries by 2026.

Traeger plans to leverage its brand strength, premium positioning, and innovation to maintain pricing power despite inflation, expecting other grill brands to also raise prices.

However, tariffs and macroeconomic challenges are likely to pressure short-term performance, the analyst noted.

Traeger is adopting a cautious inventory strategy amid macroeconomic and tariff uncertainties, reducing purchase orders to align with demand. The company has pre-tariff products in stock, which will help offset cost pressures temporarily.

For 2025, the analyst has lowered sales forecast to (1.4%) to $596 million from (0.3%) to $605 million previously.

Price Action: COOK shares traded lower by 1.3% at $1.46 on Friday.

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