Jeremy Andrus: Yeah. Hey, Peter, this is Jeremy. Happy to answer that. Yeah, 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 life cycle of existing products that have been in the market for some time to lean into promotion as a lever to ensure that — or a good channel inventory position as we launch new products next year. So, that’s sort of top 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. And so, 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.
Peter Benedict: Yep, that makes sense. Is there anything in terms of the timing of the innovation that you have planned for the back half of this year or even for 2025, which sounds like might be a bigger innovation year, that you could adjust that based on the macro? I’m just trying to get a sense for maybe how the macro is right now relative to kind of your expectations and whether it would — what would cause you to maybe shift the timing of any of the innovation, if there is anything that would make you do that?
Jeremy Andrus: We don’t really think about product launches around macro. Our development pipeline, our objective is to be very consistent in how we invest and when we launch. And so, we do it independent of the macro. And I would say from the time of launch, it’s driven more by seasonality and by our retailer reset windows. This category is one that tends to reset in the first quarter in preparation for the spring/summer selling season. And so, we will stick to that calendar. It’s what works best operationally for us. It’s what we plan on for our retailers — but to the extent that we need to be more promotional to ensure that our channel inventories are healthy before we launch new products, promotional is certainly a lever that we can use, especially at the end-of-life products — I mean, plans I would say, Peter, our innovation plan is many years out. And so, it’s really hard in a durables business to plan innovation around macro cycles.
Peter Benedict: Yep. No, no, I think that makes sense. That makes sense. Just one more for — maybe for Dom. Just to clarify on the third quarter gross margin expectation, you mentioned it would be the softest sales quarter and therefore, some pressure there. Do you expect gross margin in the third quarter to be down year over year or just up the least? I guess I should be thinking about the year. Thank you.
Dom Blosil: Yeah. We’re not guiding specifically to quarters from a gross margin standpoint or anything. But what I would say is that the impact should be pronounced. So, it will be a deviation from kind of 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 in relation to how you treat Q3 given kind of lower sales and the deleverage off of those lower sales.
Peter Benedict: Yep. OK, makes sense. Thanks so much, guys. Good luck.
Operator: Our next question is from Joe Feldman with Telsey Advisory Group. Your line is now open.
Joe Feldman: Great. Thanks, guys. I wanted to follow up. When you — when consumers are making purchases because 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 always curious about that.
Dom Blosil: No, we most definitely have seen a change in behavior where there’s been, I would say, 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 kind of 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 just simply more price sensitive, right? 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, right?
So, I think within the margins, we have flexibility to lean more aggressively into promo without straying outside of those guardrails. But that really is in an effort to follow these trends, which is certainly specific to Traeger as well as specific to, I think, broader kind of categories as you think about pressure on big-ticket in relation to where we see kind of the volumes and where we want to capture that benefit. I think at the end of the day, we still believe that there’s a consumer that is 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.
