When barbecue sales plummet, King Weber loses his stock market crown

(BFM Börse) – From a rudimentary and static stone oven, Weber has transformed the grill into an impressive marketing tool that promotes an enjoyable lifestyle around a good meal with friends. If the pandemic had revived sales of the Rolls-Royce of grills, enthusiasm for Weber’s flagship product has since waned… The stock has also lost more than 60% of its value since its IPO a year ago.

weaver. Just invoking the brand acts as an invitation to enjoy grilled meats under the sun. Founded by George Stephen, the company has been delighting the taste buds of meat lovers and other grilled dishes around the world for more than 70 years.

In France, grilling has become such a hobby over the years that according to a BVA survey for the Weber grill brand, 63% of French households are equipped with it. In the United States, the barbecue, or BBQ, is an institution and an integral part of the culture of the Stars and Stripes country. Across the Atlantic was also born Weber, the undisputed leader of the grill, whose full name Weber-Stephen Products refers to George Stephen, steel plate assembler at the Weber Brothers Metal Works factory. A fan of large family barbecues, the father of twelve children was obsessed with creating the perfect cooking utensil that was efficient and safe in all weather conditions.

Legend has it that he got the idea of a round barbecue by assembling large steel plates into hemispheres to make nautical buoys for Lake Michigan (or by observing a metal beacon during a sailboat trip, if you wish). a lid. The original kettle (or Weber kettle) was born, and George Stephen then set out to travel the country to promote his invention. Success came quickly because the feedback was unanimous: An even heat inside the grill ensures better cooking quality. Charcoal, gas or electric grills, and now linked, the group has subsequently developed a wide range of appliances, as well as a range of accessories and consumables (representing 26% of its income).

Grills that don’t sell well

Weber has average annual sales growth of 10% between 1980 and 2021. Because of this tantalizing story, the BBQ king took to Wall Street last year with a goal of raising nearly $800 million. However, the grill manufacturer has not had success commensurate with its notoriety. Weber was forced to lower his claims to ensure a successful IPO. The group will only manage to raise $250 million, less than a third of what the group originally hoped for, while the list price was below the original $15-$17 price range.

Weber therefore made his first attempts at the stock exchange on August 6, 2021 at a price of $14. The initial listing of the stock was in good conditions with a share soaring 18%. Weber’s capitalization reached $4.7 billion at the time.

After a few months of stock market honeymoon – Weber shares reached their high of 17 dollars in October 2021 – market interest in the king of grills has ebbed over the quarters. The grills that made it famous aren’t selling like hotcakes anymore. Evidenced by the last quarterly update released by the group at the end of July. In its most recent quarter, Weber’s net sales declined 7% and its net loss was $51 million compared to its net income for the same period last year. The Palatine, Illinois-based company also suspended its quarterly dividend.

The root cause of this evaporation in sales has been found: inflation, which is distracting consumers from its flagship barbecues as their budgets are increasingly devoted to essential everyday products. Against this inflationary background, Weber expects a further decline in sales in the third quarter and is urging his CEO to resign.

Exactly one year to the day after the IPO, the grill king’s stock market balance sheet is far from fueling the rating. Weber has seen its stock fall more than 60% in a year, indicating a reduced market cap to $2 billion. That’s nearly $3 billion gone up in smoke in a short year…