Despite the Biden administration’s desperate efforts to gaslight America into believing “this is not the recession you’re looking for”, BBQ-maker Weber’s shares are in freefall in the pre-market after announcing a management reshuffle, suspending its dividend, and providing a dismal business update, withdrawing its FY 2022 Net Sales and Adjusted EBITDA guidance.
Weber announced that Alan Matula, the Company’s current Chief Technology Officer, has been appointed interim Chief Executive Officer, effective immediately. Chris Scherzinger is departing from his roles on the management team and Board of Directors. A search for a permanent CEO will commence immediately.
“We are taking decisive action to better position Weber to navigate historic macroeconomic challenges, including inflationary and supply chain pressures that are impacting consumer confidence, spending patterns, and margins,” said Kelly Rainko, Non-Executive Chair of the Weber Board of Directors.
“The management team is well positioned to guide Weber through this transitional period and execute a transformation of the Company’s cost base.”
Weber reported preliminary Net Sales of $525M to $530M for Q3 (lower than consensus).
Net Sales performance was affected by slower retail traffic, both in-store and online, in all key markets, as well as continued foreign currency devaluations that impact our reported results.
Management believes that the slower retail traffic patterns are the result of pressured consumer shopping behaviors globally, due to rising inflation, supply chain constraints, fuel prices, and geopolitical uncertainty. The Company expects these market headwinds to continue into the fiscal fourth quarter of 2022.
The Company now expects Adjusted EBITDA to be marginally profitable, which is materially lower than the internal budget related to the previously announced fiscal year 2022 Adjusted EBITDA guidance.
The Company also expects to have a net loss in the period ending June 30, 2022. Profitability was negatively impacted by significant currency devaluations within the quarter, promotional activity to enhance retail sell through, lower margin country, and product mix, as well as substantial freight cost increases.
Weber further announced that it is pursuing a number of financial transformation initiatives, which may include workforce reductions, reducing other COGS and SG&A expenses, as well as tightening its global inventory levels and working capital positions. The Company will provide additional detail, as well as its final fiscal third quarter results, on its earnings call on August 15, 2022.
WEBR is down 25% in the pre-open, back near record lows sine its IPO in August 2021 (and having traded above $20)…
This is ahead of peak grilling season!
None of this paints a rosy picture of the ‘strong’ consumer we keep being told is driving America forward?
Mon, 07/25/2022 – 09:03
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Author: Tyler Durden