By Colin Kellaher
Shares of Weber Inc. slid more than 20% on Monday after the grill maker said that slowing demand and supply-chain issues continue to weigh on its results, and that its chief executive has left the company.
Weber said that sales for its fiscal third quarter ended June 30 would miss Wall Street’s expectations, and that its adjusted earnings before interest, taxes, depreciation and amortization would fall well short of internal projections, and the Palatine, Ill., company pulled its full fiscal-year guidance, which called for sales of $1.65 billion to $1.80 billion and adjusted Ebitda of $140 million to $180 million.
Weber and fellow grill maker Traeger Inc. both went public last summer after cashing in on booming demand for high-end barbecue equipment sparked by lockdowns created by the Covid-19 pandemic.
But Weber said rising inflation, supply-chain constraints, fuel prices and geopolitical uncertainty has led to a shift in consumer confidence and spending patterns while weighing on margins.
US consumer inflation accelerated to 9.1% in June, a pace not seen in more than four decades, pushing up prices broadly across the economy, while consumers’ short-term outlook for the US economy dropped sharply to its lowest point in nearly a decade.
Weber, which had already cut its guidance at least twice this year, said that it is considering cutting its workforce as it moves to reduce costs, and that it has suspended the 4-cent quarterly dividend it initiated late last year as it works to stay in compliance with the covenants in its credit facilities.
Weber said Chris Scherzinger, who had been CEO since April 2018, has left the company, and that Alan Matula, its chief technology officer, would serve as interim CEO while the company looks at internal and external candidates for a permanent successor.
Traeger last week said it was cutting jobs and suspending operations at its Traeger Provisions meal-kit service, among other moves aimed at cutting costs and boosting long-term operational efficiencies.
Weber shares were recently changing hands at $5.96, down 21%, and are now more than 70% below the high of $20.44 they reached last August after the company’s IPO. Shares of Traeger, down nearly 90% from last year’s highs, were recently 7.1% lower at $3.28 after touching a new all-time low of $3.22 early in the session.
Write to Colin Kellaher at [email protected]
Credit: www.marketwatch.com /