Premarket trading on Thursday saw shares of Traeger (COOK), which fell more than 20% after it released its FY2022 guidance.

Traeger reported Q4 adjustedEPS of 3c, which is below the expected loss of 4.9c per share. The fourth quarter revenue was $174.9million, exceeding the consensus estimate of $156.6 million.

The period’s gross margin was 37.4%, against the 35.1% analyst consensus. Traeger reported Q4 adjusted EBITDA at $13.8 million. This is higher than the consensus projections of $9.08 millions.

Traeger anticipates that revenue will range from $800million to $850million for the entire fiscal 2022. This is significantly lower than the $954.8 million consensus estimate. An adjusted EBITDA of between $70 and $80 millions is forecast, which will miss the estimate $112 Million.

The company stated that full-year guidance shows a moderated year-over year growth in sales, compared to two years of rapid retail activity as well as the effect of inflationary pressures. Geopolitical instability on consumer sentiment and discretionary spend as well as the gross margin pressures resulting from global supply chain problems.

Jim Duffy from Stifel lowered the COOK share price to Hold from Buy. The target was also lowered to $7.50 from $26.00

The trends in early grill season indicate that there will be a decline of categories due to the anniversary stimulus. There may also be an increase in elasticity for price increases. The equity is at risk due to declining revenue from grills and supply chain/logistics margin pressure. EBITDA projected at 3.7x for FY23E. Duffy stated in a client letter that at the current share price we don’t believe shareholders are adequately compensated for such risks.

Morgan Stanley John Glass, analyst at NYSE:, reduced the target price to $10.00 per shares from $26.00 by John Glass while remaining Equal-weight.

Despite lower market expectations (COOK shares have fallen more than 50% since the IPO), our FY22 guidance was significantly below our previous view. While we “ and the market “ had appreciated the cost pressures mounting in the business (and specifically for inbound freight, which has weighed on gross margins at an increased rate through 21, and now also higher input prices, neither unique to COOK), grill demand is now softening post-Covid bump as we enter ’22 to a greater extent than previously assumed, Glass wrote in a memo.

Yesterday’s closing price for Trager stock was $8.80

By Senad Karaahmetovic