Shares of Weber Inc. were down roughly 20% Monday after the BBQ grill-maker announced the departure of its CEO, suspension of its dividend, and lower fiscal-year guidance for 2022.
Slowing demand, rising inflation, and supply-chain constraints continue to weigh on the company’s margins, which Weber said would fall short of Wall Street’s expectations. Both net sales and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to fall short of internal projections, according to Weber.
Former Weber CEO Chris Scherzinger will be replaced by Chief Technology Officer Alan Matula, who will serve as interim CEO until the company finds a permanent successor.
Kelly Rainko, the non-executive chair of Weber’s board, said the company is taking decisive action to better navigate macroeconomic challenges.
This makes it the third time in 2022 that the company has guided down on estimates. Weber initially projected sales to increase from $1.65 billion to $1.80 billion and adjusted EBITDA to increase from $140 million to $180 million. The company has since withdrawn all guidance projections but is expected to provide additional details when it reports its fiscal third-quarter results on Aug. 15.
In a move to reduce costs, Weber opted to suspend its quarterly four-cent dividend and is actively considering cuts to its workforce. Weber cited currency devaluations, promotional activity to enhance retail sell-through, lower margins, and substantial freight cost increases as reasons for the impact on profitability.
The Illinois-based company launched its first grill in 1952. In 2021, Weber’s IPO raised $250 million through the sale of almost 18 million shares at an average of $14 each. With a 52-week high of $20.20, Weber’s shares were trading at $6.56 on July 25, an almost 70% drop in share price.
