Shares of outdoor grill maker Weber Inc. (NYSE: WEBR) were up 9% on Wednesday after the company released its first quarterly earnings report since going public last month. The stock has dropped 8% over the past one month.
Quarterly performance
For the third quarter of 2021, Weber’s net sales increased 19% year-over-year to $669 million. The company posted sales growth across all its regions, with Americas increasing 8%, EMEA rising 35% and APAC growing 25%. Net income fell 78% to $18 million, or $32.84 per share in Q3. Adjusted net income fell 6% to $85 million.
Trends
During the third quarter, Weber saw high demand for its grills and accessories across all its product fuel types and geographic regions. The company continues to gain market share as it sees resilience in the outdoor cooking category.
Weber has an installed base of over 50 million households across 78 countries. On its quarterly conference call, the company said it is well-positioned to grow its share in the global outdoor cooking total addressable market which is currently estimated at $49 billion.
However, Weber’s products mostly fall in the consumer discretionary category and therefore its prospects would depend on economic recovery and people’s spending power. Its sales could be impacted by seasonal factors and unfavorable weather conditions.
Weber is focusing on accelerating direct-to-consumer and ecommerce growth. Growth from Weber.com has been strong in 2021 with year-to-date sales up 54% versus the same period last year. The company is also working on expanding its presence in emerging geographies.
Weber saw 90% growth in Canada as its focus on new customer acquisition drove favorable results. In Europe, every region saw solid growth but the strongest results came from the UK and Nordic countries like Denmark, Norway, Sweden and Finland.
Weber’s gross margins improved during the quarter, helped by pricing actions offsetting cost inflation, a favorable mix shift towards EMEA which is its highest margin operating segment, and reduced COVID-19 costs.
Outlook
For fiscal year 2021, net sales are expected to increase 28-29% YoY to $1.96-1.97 billion while adjusted EBITDA is estimated to grow 35-37% to $305-310 million.