Good afternoon, everyone. Thank you for joining Traeger's call to discuss its first quarter 2024 results, which were released this afternoon and can be found on our website at investors.traeger.com. I'm Nick Bacchus, Vice President of Investor Relations at Traeger. With me on the call today are Jeremy Andrus, our Chief Executive Officer; and Dom Blosil, our Chief Financial Officer. Before we get started, I want to remind everyone that management's remarks on this call may contain forward-looking statements that are based on current expectations but are subject to substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied herein. I encourage you to review our annual report on Form 10-K for the year ended December 31, 2023, a quarterly report on Form 10-Q for the quarter ended March 31, 2024, once filed, and our other SEC filings for a discussion of these factors and uncertainties, which are also available on the Investor Relations portion of our website. You should not take undue reliance on these forward-looking statements, which speak only as of today. We undertake to update or revise them for any new information. This call will also contain certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income, adjusted net income per share and adjusted EBITDA margin. The most comparable GAAP financial measures and reconciliations of the non-GAAP measures contained herein to such GAAP measures are included in our earnings release, which is available on the Investor Relations portion of our website at investors.traeger.com. Please note that our definition of these measures may differ from others. Now I'd like to turn the call over to Jeremy Andrus, Chief Executive Officer of Traeger.

Thank you, Nick. Thank you for joining our first quarter earnings call. Today, we'll be discussing our first quarter results, and we'll provide an update on our strategic growth pillars before handing the call over to Dom to provide further detail on our quarterly performance. Despite facing a challenging demand backdrop, I'm pleased with our execution in the first quarter. Sales were $145 million, and adjusted EBITDA was $24 million, at the high end of our guidance range. Our first quarter results give us confidence in the outlook for the year, and we are reaffirming our prior financial guidance for fiscal 2024. As we move through the quarter, we continue to focus on our key strategic imperatives of driving energy to our brand and delighting our consumers with innovative products. The underlying measures of health for our brand remain strong, and I continue to believe that Traeger is well positioned to be a long-term share gainer in outdoor cooking. Our retail partners continue to be very supportive of the Traeger brand which enhances the consumer experience at retail. The Traegerhood, our community of Traeger enthusiasts, continues to be passionate as evidenced by the strong growth in engagement in our social media channels as well as our industry-leading NPS score. I believe that our premium positioning and our current efforts will allow the company to disproportionately benefit from an eventual recovery in grill industry demand. As we anticipated, the demand environment continued to be soft in the first quarter. From a sell-through perspective, consumer demand for grills remained below the prior year. We believe the consumer continues to shift spending away from durable goods like our grills and other product categories previously dominant during the pandemic. In particular, we see greater pressure on higher ASP SKUs. From a sell-in perspective, in the first quarter, we faced significant load-in tied to the launch of two new grills in the prior year, which also pressured sales this year. We are assuming that consumer demand for grills remains soft for the balance of this year. The first quarter is a seasonally slower period in terms of consumer demand for grills, and our peak selling season at retail typically starts with Memorial Day and lasts through the end of the summer. Therefore, we are highly focused on execution as we move into our most important seasonal period in the next several months, and we will have greater visibility as we move through the second quarter in key holiday periods. In the first quarter, our results continue to benefit from our significant efforts over the last two years to enhance profitability and efficiency. Despite lower sales versus the first quarter of last year, adjusted EBITDA grew 11% year-over-year, and our adjusted EBITDA margin grew by 250 basis points. This growth was driven by 700 basis points of gross margin expansion. I am very pleased with our ability to drive first quarter gross margin above 43%, and our Q1 margin represents the highest quarterly gross margin we reported as a public company. This is our fourth consecutive quarter of gross margin expansion and the significant progress we have made on margins has been driven by both improvements in the cost environment as well as company-specific initiatives. We continue to have line of sight into strong gross margin improvement for the fiscal year. The Traeger story is our long-term opportunity to expand our household penetration and market share. In the current challenging demand environment, our ability to drive meaningful improvements in our margins and our adjusted EBITDA speaks to our financial discipline, and we expect these improvements will set the company up well for significant growth as demand improves. Overall, I am pleased with our ability to deliver first quarter results at the high end of our guidance range. I believe we are well positioned to execute on our plan this year. Let me now review our strategic growth pillars and key wins in these areas. Our first growth pillar is to drive awareness and penetration in the United States. While the first quarter is a seasonally slower period in terms of grill usage, our community was highly engaged with our brand during the quarter, and we continue to interact with the Traegerhood and create energy behind our brand during key seasonal events. In February, our social post focused on the Super Bowl, and we offered up content and recipes for the big game, including our EPIC take on Trash Can Nachos. We also teamed up with the Dan Patrick Show to demonstrate to viewers how to use our Traeger to create an incredible Super Bowl spread. Overall, we saw strong engagement with our brand during the Super Bowl and had another record year of user-generated content posts. We also saw a solid increase in connected cooks on the day. Heading into the peak grilling season this year, we are highly focused on driving execution and positioning at retail. Historically, Traeger has leveraged community and ground level marketing as well as in-store selling and merchandising efforts to drive awareness and accelerate conversion. We will continue to utilize these strategies in the coming months, and we believe that investments into retail execution and merchandising are some of our highest return activities. This includes our Captain Traeger program. This program is designed for associates and retail partners who are barbecue enthusiasts and are ready to take their knowledge, training, and commitment to the Traeger brand to the next level. Captain Traeger provides retail associates with access to educational training, limited edition products, and exclusive VIP events. It transforms these associates into Traeger ambassadors. This year, we are investing into the Captain Traeger program through in-person and digital training experiences, moving into peak grilling season. Next week, on May 18, we will be celebrating our Seventh Annual Traeger Day. Traeger Day centers around gathering friends and family, enjoying food cooked on your Traeger, and sharing these memories with the Traegerhood via social media. Members of our community have been recording their best Traeger Day videos and submitting these to us over the last couple of weeks. On May 18, we'll post the best submissions and we'll also run a contest with Traeger giveaways to encourage our community to post their Traeger Day content on social media. The day is a celebration of all things Traeger and is our highest user-generated content day of the year. Turning to innovation. Innovation is a key pillar of our long-term vision for Traeger, and we remain committed to empowering our capabilities in this area. In the first quarter, we completed the build-out of our new R&D lab in our corporate headquarters in Salt Lake City. The R&D lab is designed to equip the R&D team with tools needed to bring innovation into their physical forms as well as to inspire creativity. We believe this new space will greatly enhance our ability to create and will be a driver in our long-term mission to disrupt the outdoor cooking industry with innovation. Also on the innovation front, I'd like to mention that Traeger was named one of Fast Company's Most Innovative Companies in 2024. In fact, Traeger was ranked the sixth most innovative company in North America. Fast Company lists highlighted businesses that are shaping industry and culture through innovations in a variety of sectors and the annual list is highly anticipated. This achievement is a testament to our long-standing commitment to innovation and disruption. I'm incredibly proud of our team for this well-deserved recognition. Our next growth pillar is growing our consumables business. In the first quarter, we drove innovation in our pellets business through our partnership with an iconic American brand. In March, we announced the introduction of a limited edition of wood pellet in collaboration with Louisville Slugger, the official bat of Major League Baseball. Traeger's limited edition maple pellets are crafted from the same hardwood used to make Louisville Slugger's iconic bats, repurposing wood from the bat manufacturing process to transform wood pellets for the enjoyment of Traeger users. To drive awareness for this launch, we released a series of videos. As we mentioned on our last earnings call, in February, we relaunched our new branded barbecue sauces across all markets and launched a marketing campaign highlighting our updated offering. With new and improved formulas and easier-to-use squeeze bottles, we believe our new line is a big upgrade. We have also positioned our revamped sauces with a more competitive MSRP. We are pleased with consumer reception of our new sauces and have seen a lift in sell-through versus our previous line of sauces. Next, I will discuss our fourth pillar, expanding internationally. In Canada, we saw improved sell-through at our big box and specialty grill channels in the first quarter, and we are pleased with the momentum and demand going into the summer. In Europe, our distributors continue to work down excess inventory, and we expect that inventory level will be balanced later this year. In Germany and the U.K., our direct markets in the EU, we are focused on retail execution going into the peak grilling season. We recently rolled out a sales training initiative where we gathered leading sales associates from our retail partners to educate them on the brand, demo the product, and have them meet brand influencers. Similar to our strategy in the U.S., we believe that ground-level execution will drive retail conversion in our international markets where awareness of our brand remains lower than in the United States. On the MEATER side, we recently launched new distribution at Canadian Tire, one of the leading retailers in Canada. MEATER also continues to see growth from its partnership, which complements MEATER's revenue base. Overall, I am pleased with our ability to execute our plan in the first quarter, particularly given the near-term market challenges continuing to face our industry. We saw strong growth in gross margins, which has been a key area of focus for our organization for the last 24 months and grew adjusted EBITDA. Going into the peak seasonal period, we are hyper-focused on executing against our plan and I remain highly confident in our ability to navigate the current environment while positioning the brand for long-term success.

Thanks, Jeremy. Good afternoon, everyone. Today, I will review our first quarter performance and discuss our outlook for fiscal year 2024. First quarter revenue declined 5% to $145 million. Grill revenues declined 14% to $77 million. Grill revenue was impacted by lower sales through retail and a lower average selling price. Furthermore, in the first quarter of 2024, we were lapping initial sales of two new grill launches in the first quarter of last year, which pressured selling on a comparative basis. Consumables revenues were $32 million, up 7% compared to the first quarter of last year, driven by growth in both our pellet business as well as our food consumables business. While first-quarter pellet revenues did benefit from a timing shift in the second quarter, we are pleased with the growth. Accessories revenues increased 7% to $36 million, largely driven by increased sales at MEATER. Geographically, North American revenues were down 9%, while Rest of World revenues were up 31%. Gross profit for the quarter increased to $63 million from $55 million in the first quarter of 2023. Gross profit margin was $0.432, up 700 basis points versus the first quarter of 2023. We are pleased with our first-quarter gross performance, which benefited from lower costs as well as the margin-enhancing initiatives we implemented in the last two years. The increase in gross margin was primarily driven by: one, lower freight and logistics costs, which drove 290 basis points of margin favorability; two, higher pellet margins driven by our efforts to increase efficiency at our pellet mills which drove 170 basis points of margin; three, FX stability, which positively impacted margins by 90 basis points; and four, other favorable gross margin items worth 150 basis points. Sales and marketing expenses were $22 million compared to $22 million in the first quarter of 2023. During the quarter, increased demand creation costs were partially offset by increased employee expenses. General and administrative expenses were $32 million compared to $27 million in the first quarter of 2023. The increase in G&A expense was driven by higher stock-based compensation expense, higher employee expenses, and higher occupancy expenses, partially offset by nonrecurring expenses related to the disposal of pellet mill assets in the comparable period. Net loss for the first quarter was $5 million as compared to a net loss of $11 million in the first quarter of 2023. Net loss per diluted share was $0.04 compared to a loss of $0.09 in the first quarter of 2023. Adjusted net income for the quarter was $5 million or $0.04 per diluted share as compared to adjusted net income of $1 million or $0.01 per diluted share in the same period of 2023. Adjusted EBITDA was $24 million in the first quarter as compared to $22 million in the same period of 2023. First quarter adjusted EBITDA was approximately in line with the high end of our guidance range of $21 million to $24 million. Next, I will discuss the balance sheet. At the end of the first quarter, cash and cash equivalents totaled $24 million compared to $30 million at the end of the previous fiscal year. We ended the quarter with $404 million of long-term debt. At the end of the quarter, the company had drawn down $41 million under its receivables financing agreement, resulting in total net debt of $421 million. From a liquidity perspective, we ended the first quarter with total liquidity of $153 million. Inventory at the end of the first quarter was $100 million compared to $96 million at the end of the fourth quarter of 2023 and $132 million at the end of the first quarter of 2023. We believe inventories on our balance sheet are appropriately positioned for our current demand outlook. Moving to our outlook for fiscal year 2024. We are reiterating our guidance for revenues of $580 million to $605 million and adjusted EBITDA of $62 million to $71 million. As previously discussed, we expect our Grill revenues to be pressured by lower sell-through as consumer demand for grills remains below historical levels. Furthermore, we will be sunsetting several grill products this year ahead of future product launches, which will also pressure Grill revenues. We expect that third-quarter revenues will be our most challenging on a year-over-year basis. We are also reiterating our outlook for full-year gross margin of 39% to 40%, which represents expansion of 210 basis points to 310 basis points. We continue to expect that our margins will benefit from lower transportation costs, in particular, lower inbound freight rates, as well as margin-enhancing initiatives, including our pellet optimization and our direct import program, partially offset by planned strategic pricing actions to stimulate demand. We expect that our first-quarter gross margin improvement will be the largest of the year and believe the rate of improvement will moderate going forward. Furthermore, we expect that third-quarter gross margin will be negatively impacted by deleverage, given the expected pressure on sales and the lower revenue base in the quarter. Overall, while we faced ongoing demand pressure, we delivered first-quarter results in line with our plan. Despite lower sales, we grew adjusted EBITDA and we have visibility into a second year of meaningful gross margin expansion. We are highly focused on execution as we move into our peak selling season and remain committed to navigating the current environment, all while positioning for long-term growth. And with that, I'll turn the call over to the operator for questions.

Our first question is from Simeon Siegel with BMO.

Dom, what was the breakdown in Grill revenue? And then Jeremy, higher-level question on that, just when thinking about the return to growth domestically when it happens. How do you think about what we're going to see in terms of replenishment versus new customers? And just kind of thinking about maybe if you have any views on replenishment and cycles there.

Yes. So the breakdown, roughly speaking, is there was a greater impact to ASP and a kind of high single-digit decline. And then for units, it was somewhat more moderated in kind of the single digits decline.

Simeon, happy to hit the second part of the question. First of all, as I mentioned in my remarks, the environment is soft, and it's not easy to sort of unpack how much of it is driven by a pull-forward demand from the pandemic versus a general sentiment being down. Consumer financing is expensive and housing transactions are very sluggish; these factors facilitate Grill sales or sell-through at retail. We spend a fair bit of time thinking about replenishment cycles, talking to consumers and doing the math on Grill ownership period. Our general belief is that we should be about to the end of pull-forward demand from 2021. As you step back and look at not only this category but other high-ticket discretionary consumer categories, they tend to have some element of cyclicality to them. As we see consumer strength and interest rates starting to come down, we believe those are catalysts to the beginning of the cycle. We believe that replenishment should start to normalize, certainly in '25, absent meaningful downside, and the consumer should be back to a fairly normalized cycle. The question is what is the impact on the macro on a consumer choosing to wait to get one more year as they tend to do with durables? In terms of how we think about new versus replacement, as we lean back into top-of-funnel investment, we are doing some testing this year, but we certainly don't believe it's in an environment where we should be investing meaningfully in top of funnel. We will always think about NPS and engagement and ensure that we can drive our existing consumers to our new products. We believe as we look at our innovation pipeline that the first consumer likely to buy is an upgrade from a Traeger owner who bought five, six, or seven years ago. I think we'll start to see the mix increase towards new customers as we invest in new markets where penetration is low.

That's great, and congratulations on the gross margin, which you mentioned is the highest. Do you believe the supply chain challenges are behind us? Looking at your current position and considering the long-term, are we on track to reach the low to mid-40s? Are there any external factors we need to be aware of, as this is an encouraging number?

Yes. I would say that it's consistent with what we've addressed around gross margin in previous calls in that there will be sequential benefits from macro over the next couple of years, just given the dynamics of certain decisions we made during the pandemic when pressure was pronounced, locking in some fixed contracts on the inbound transportation side as an example of something that will bleed down over the next couple of years. But it is safe to say that macro trends are working in our favor, and that has been an important assist to how we think about the long-term sustainability of a gross margin that we believe is appropriate for our business. So Q1 is a great signal; there are some idiosyncrasies to the year that I think you've spoken to. H1 is particularly benefiting from the continued tailwind of inbound transportation and also the FX component that we addressed on the opening remains, whereas the back half was maybe facing less of a benefit from a comp standpoint given the fact that the inbound rates were improving in the back half of last year. So I'd say we're starting to see some stabilization in that realm, and I think that, that assist is really driving a different perspective on the long-term gross margin together with the controllables that we continue to drive. So we maintain a positive view on where we are today and where we think we’ll be able to take gross margin in the future with continued tailwinds hopefully driving some of that in the coming years. But I wouldn't say that we've necessarily reached that mark just yet.

Our next question is from Peter Benedict with Baird.

Just on the strategic pricing plan, Dom, you mentioned kind of at the end there. Just curious if you can expand a little bit more on that. Is that around the existing portfolio? Is that new innovation that you plan to bring in at different price points or margin points? Just maybe help us understand a little more what you're referring to there.

Yes, Peter, this is Jeremy. Happy to answer that. Yes, I'd say a couple of things. One is, as we prepare to launch new products in the future, I think it gives us permission as we get later in the life cycle of existing products that have been in the market for some time to lean into promotion as a lever to ensure a good channel inventory position as we launch new products next year. That's sort of number one. Number two, in a challenging macro economy and notably for the category that we play in, we're very thoughtful as we look at what is selling through, what trends we're seeing from a consumer perspective, and price sensitivity is certainly one of those. We are measured in how we plan promotions. We plan our promotions many months in advance, but we feel this is an environment where we will lean into promotion a little bit more, perhaps not in the number of promotions, but in the level of promotion. We'll be thoughtful to consumer trends and where we think there's value and opportunity to do any more. So this is part of the plan. As we think about guidance, this is inherent in the guidance that we reaffirmed today.

Yes, that makes sense. Is there anything regarding the timing of the innovation you have planned for the second half of this year or even for 2025, which seems like it might be a significant year for innovations, that you might adjust based on the current economic conditions? I'm trying to understand how the macro environment stands relative to your expectations and what might lead you to change the timing of any innovations, if there is anything that would influence that decision.

We don't really consider product launches based on macroeconomic conditions. Our focus is on maintaining a consistent approach to our investments and launch timing, independent of the macro environment. Launch timing is more influenced by seasonality and our retailer reset periods. This category typically resets in the first quarter as we prepare for the spring and summer selling season, and we intend to adhere to this schedule as it is the most operationally effective for us. It's our strategy for our retailers. However, if we find it necessary to be more promotional to align channel inventories before launching new products, promotion is definitely an option we can utilize, particularly for products at the end of their lifecycle. Our innovation plan extends several years ahead, making it challenging to adjust based on macroeconomic cycles.

Yes, I believe that makes sense. Just one more question, perhaps for Dom. To clarify on the third-quarter gross margin expectation, you mentioned it would be the softest sales quarter, which would create some pressure. Do you anticipate that the gross margin in the third quarter will be down year-over-year or will it be up? That's something I've been considering for the year.

Yes. We're not guiding specifically to quarters from a gross margin standpoint. What I would say is that the impact should be pronounced. It will be a deviation from the general run rate we see in the other quarters. And just to add to that, we are reaffirming our gross margin guidance, so that's an important comment as you think about modeling and planning how you treat Q3 given the lower sales and the deleverage off of those lower sales.

Our next question is from Joe Feldman with Telsey Advisory Group.

I wanted to follow up. When consumers are making purchases, clearly you are selling quite a few grills still. But are they opting for the better quality grills? Are they spending more? Have you seen any change in their behavior? I know it may be subtle, but I am always curious about that.

No, we most definitely have seen a change in behavior where there's been a pronounced shift from the volumes that we tended to see increasing above $1,000 to now having that kind of dynamic shift to sub-$1,000 in those entry price points that we offer. So that is definitely a trend that we're seeing and reinforced by the point Jeremy made earlier in terms of how we're thinking about promotion to ensure that we are strategically competitive in an environment where consumers are simply more price-sensitive. These aren't necessarily systemic changes that we were making per se. We just want to make sure that we remain competitive, and we always think about price as a strategic lever within the guardrails that we've defined around how we think about gross margin and ensuring that we're not a brand that's considered to be on promotion. We believe there's a consumer willing to pay for innovation and quality, and we address that across our product line. But at this moment in time, we want to follow that trend and ensure we play more aggressively where the consumers are shopping.

Yes. We do have an active effort underway to diversify sourcing outside of China. We currently manufacture in Vietnam; there are other geographies in Asia where we are actively exploring options. In some cases, existing suppliers are just taking operations outside of China. Those are active conversations. We do certainly believe in the value of diversification and always measure it against stability and cost within the supply chain. We're also very considerate of the environment that may emerge should a new administration decide to lean into additional tariffs on goods from China, and we think about what a contingency plan may be to accelerate movement from China to other sourcing geographies. That's top of mind.

Our next question is from Brian McNamara with Canaccord.

This is a follow-up question. We were just curious about retailers' floor space dedicated to the category and whether they remain committed to keeping or increasing floor space for the category.

Madison, yes, we haven't really seen any shift in retailers' point of view on the category either in season or across seasons. There is certainly a time a handful of years ago where we saw retailers begin to move to year-round barbecue sets and also to expand floor space. It feels pretty steady state right now.

Our next question is from Megan Alexander with Morgan Stanley.

Wanted to come back to the sell-through. Jeremy, I know you talked about it still being down in the quarter. Is there any way you can quantify maybe just for Grills, what that sell-through number looked like in relation to your Grill revenue being down that mid-teens number? I know you were lapping the sell-in of the launch last year. So just trying to understand, number one, what sell-through looks like in the quarter? And then just bigger picture, from a unit perspective, are you seeing that decline stabilize? Or was your commentary earlier around the macro, does that suggest the declines may get worse? Or are you kind of thinking about the declines have heavily stabilized at this point?

I can jump in and answer that. Thanks for the question. I think to your first question on sell-through, it sets a baseline for how we think about our forecast this year, but there are idiosyncratic components to sell-in that are building on the declines that we're seeing in sell-through, which look more pronounced on a reported basis. As you said, it's the launch comparison, right? So comping Flatrock, Ironwood launch in H1 of last year and then the sunsetting of products ahead of a new product launch in 2025 in the back half of the year. Those are layered on top of our baseline forecast, which underpins our general thinking around demand planning. I wouldn't necessarily say we're in a position to tell you that things are getting worse or better. I think right now, it's just kind of consistent themes around the sell-through side.

Got it. That's really helpful. And then maybe asking the gross margin question a different way. Again, really impressive. It was above what you did in Q1 '19, and you did a 43% full year gross margin in '19, understanding you have the unique dynamics in the second half with the sunsetting of some products. But is there a way to quantify maybe just what the impact you expect the sunsetting of the products to be, whether it's from a top line or margin basis? I know you've said it's accretive from an EBITDA perspective. But any way to contextualize that?

Yes. The sunsetting isn't really driving margin erosion by replacing old with new. It's more a function of the added pressure on Q3 around the fact that, one, Q3 is always our lowest selling period. And two, sunsetting products adds additional pressure to volumes in that quarter, which drives more pronounced deleverage in the quarter. Where we saw some nice expansion in gross margin in Q1, we do expect that to moderate some over the run rate from Q2 to Q4, reaffirming our gross margin guide for the full year, which means that most of the pressure is coming in Q3 based on the impacts on volume and how pronounced that deleverage is in relation to the impact on gross margin.

We have no further questions at this time. There are no additional inquiries. We appreciate your participation, and you may now disconnect your lines.