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Good afternoon. Thank you for attending today's Traeger's Fourth Quarter and Full Year 2025 Earnings Conference Call. My name is Megan, and I'll be your moderator for today. I would now like to pass the conference over to Stephanie Read, Vice President of Finance, Strategy and Investor Relations. Stephanie, you may proceed.

Good afternoon, everyone. Thank you for joining Traeger's call to discuss its fourth quarter and full year 2025 results, which were released this afternoon and can be found on our website at investors.traeger.com. I'm Stephanie Reed, Vice President of Finance, Strategy and Investor Relations at Traeger. With me on the call today are Jeremy Andrus, our Chief Executive Officer; and Joey Hord, our Chief Financial Officer. Before we get started, I want to remind everyone that management's remarks on this call may contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and views of future events, including, but not limited to, statements made regarding our organizational focus and strategy, our mitigation efforts to offset the direct impact of tariffs, our Project Gravity initiative and its impact on our business, our expected product launches and our outlook as to our anticipated first quarter 2026 and full year 2026 results. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied herein. I encourage you to review our annual report on Form 10-K for the year ended December 31, 2025, once filed and our other filings for a discussion of these factors and uncertainties, which are available on the Investor Relations portion of our website. You should not take undue reliance on these forward-looking statements, which we speak to only as of today. We undertake no obligation to update or revise them for any new information. This call also contains certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income or loss, adjusted net income or loss per share, adjusted gross margin, free cash flow and net debt, which we believe are useful supplemental measures. The most comparable GAAP financial measures and reconciliation of the non-GAAP measures contained herein to such GAAP measures are included in our earnings release and investor presentation, which are available on the Investor Relations portion of our website at investors.traeger.com. Please note that our definition of these measures may differ from similarly titled metrics presented by other companies. Now I'd like to turn the call over to Jeremy Andrus, Chief Executive Officer of Traeger. Jeremy?

Thanks, Steph, and thank you all for joining our fourth quarter earnings call. We closed fiscal 2025 with strong execution and meaningful strategic progress, and I'm proud of how this team performed in a dynamic environment. For the full year, revenue came in above the high end of our guidance at $560 million and adjusted EBITDA landed in the upper half of the range at $70 million. More importantly, we delivered on what we said we would do. We navigated tariffs, took actions to protect profitability and made hard decisions that simplify the business and strengthen our foundation for the long term. Before I get into 2026, I want to step back and talk about what we saw in 2025 and why we remain confident in the long-term value of this business. Even with more cautious consumer spending, the Traeger brand remains as strong as ever, and our community engagement continues to be a leading indicator of demand. Over the holiday season, we leaned into seasonal cooks and ambassador content and the community showed up in a big way. On Thanksgiving alone, we had 315,000 connected cooks, up 11% year-over-year, which we believe is a powerful signal of engagement across our installed base. What's important is that this brand strength is translating into business performance. In 2025, we held market share across outdoor grilling, including fuels, despite a sluggish category backdrop. That performance was supported in part by strong consumer response at price points below $1,000 where we've seen traction without sacrificing brand or performance. And with household penetration still low, we believe this brand strength positions us well as replacement cycles normalize over time. Innovation has always been core to Traeger, and it continues to be rewarded when we execute. A good example of how we're meeting consumers where they are is the Woodbridge platform launched earlier this year. Woodridge combines thoughtful innovation like the Easy Clean Grease and Ash Keg increased cooking space and our free flow fire pot that delivers better smoke with approachable price points. That balance of performance and value has driven strong consumer reception, and we believe Woodbridge is well positioned to be a meaningful contributor to our grills business in 2026 as consumers continue to prioritize value without compromising quality. Looking ahead, we plan to launch 2 additional products in 2026 that we expect will deliver Traeger innovation at more accessible price points and with a broader reach. That matters because expanding household penetration remains one of our largest long-term opportunities and the ability to deliver great product at price points that meet consumers where they are is a key part of our strategy. Our pellets business performed well this year, supported by the continued fuel category expansion of wood pellets overall. Pellet performance remains an important indicator for the broader category. When consumers are buying fuel, they're cooking. And when they're cooking, it supports the long-term health and replacement outlook. Historically, parts of this category have been tied to housing cycles and broader consumer confidence. The outdoor grilling market, including fuels, has been relatively steady since 2022, reflecting only modest declines. We believe replacement cycles have been extended beyond historical norms due to elasticity following tariff pricing actions and other macro factors. Now let's talk about what defined the operating environment in 2025. Tariffs had a meaningful impact on the category this year, and they drove volatility in ordering behavior across the channel. But through discipline and execution, we managed the impact while still delivering the full year results I just mentioned. As we've discussed in prior quarters, our approach has been consistent. We focused on 3 pillars: supply chain, pricing and cost discipline, and we've worked closely with our partners to protect profitability and maintain inventory health. We'll continue to take a disciplined approach, managing pricing on a portfolio basis as policy evolves. Meanwhile, our current guidance remains based on the framework in place earlier this year. Next, I want to provide an update on Project Gravity because it's a central part of how we're building a stronger Traeger. Project Gravity is a multiyear effort to reshape the business, not just to reduce costs but to simplify how we operate, sharpen where we compete and improve the durability of our profit model. Just as importantly, it allows us to focus and invest in the areas that matter most, including product innovation and brand. Phase 1 focused on organizational efficiency and foundational cost actions, including changes to our operating structure and the integration of MEATER into our Salt Lake City infrastructure. Phase 2 builds on that foundation and is more strategic in nature. It is focused on simplifying the business, sharpening our channel strategy, reallocating resources to our highest return opportunities and driving sustainable profitability improvements. A key component of Phase 2 has been channel optimization, including exiting the Costco roadshow, winding down direct-to-consumer commerce and transitioning to a distributor model in Europe. We've executed most of these actions already, along with additional organizational changes announced for the fourth quarter, and we expect continued progress on the distributor transition as we move through 2026. Taken together, these previously announced Phase 1 and Phase 2 savings are expected to deliver approximately $58 million of run rate savings with benefits beginning to materialize in 2025 and continuing as we move through 2026. As we've gone deeper into the work, we've also identified additional value capture opportunities within Phase 2, particularly around SKU rationalization and pricing. These initiatives are focused on simplifying our product portfolio, exiting lower-margin SKUs and taking a more strategic approach to pricing, which results in a simpler product architecture and a structurally higher-margin business mix. We expect these actions to drive an incremental $6 million to $12 million of run rate value with the majority of that benefit realized in 2027 and 2028 as the portfolio fully resets and end-of-life activity rolls off. Taken together, Project Gravity is now expected to deliver approximately $64 million to $70 million of total value across both phases. And I want to be clear, the point of Gravity isn't just about cost takeout. It's about applying a more disciplined, return-focused lens to how we run the business. Gravity is helping us simplify the model, concentrate resources where returns are highest and make deliberate trade-offs that improve margins, cash generation and long-term earnings power. That's what enables us to perform through uncertainty and generate operating leverage as the business grows. Before I move to guidance, I want to briefly address MEATER. MEATER continues to face challenging competitive dynamics, and we're working through elevated inventory as we reset the business. The steps we've taken, including closing the U.K. operation, integrating MEATER into our Salt Lake City infrastructure as part of Phase 1 of Project Gravity and optimizing demand creation investments are designed to improve the profitability profile of the business and give us more flexibility to invest in the product road map and retail channel over time. Near term, we're prioritizing inventory health and margin discipline. Longer term, we remain focused on product and retail execution to stabilize and improve performance. Now turning to guidance, 2026 is a year of disciplined execution as we focus the business on our highest return opportunities for long-term growth. After a period of tariff-driven disruption and ordering volatility in 2025, we are focused on normalizing channel inventory and working through discontinued product in the marketplace as we enter the year. In addition, our outlook reflects the full year annualization of price elasticity impacts from prior pricing actions taken in response to tariffs. At the same time, our channel actions under Project Gravity, particularly exiting the Costco roadshow and winding down DTC commerce will reduce revenue, but these are deliberate choices that simplify the business and improve profitability over time. Finally, our accessories business will continue to see pressure in 2026, primarily driven by the ongoing MEA reset. To be clear, these impacts are driven by specific identifiable actions and timing dynamics, not a change in underlying consumer demand. For fiscal 2026, we are guiding to revenue of $465 million to $485 million and adjusted EBITDA of $50 million to $60 million. Importantly, our expectations for sell-through in 2026 are significantly higher than what our sell-in plan reflects. We view this as a normalization of channel behavior rather than a change in underlying consumer demand, and we expect closer alignment in sell-through and sell-in as we move into 2027. As a result, we expect to exit 2026 with owned in-channel inventory aligned to our new grill product architecture, a lineup that delivers clear price value for consumers and supports a healthier marketplace as we move into 2027. Encouragingly, we are seeing early sell-through trends exceed expectations, particularly with our largest retail partners. That said, we are taking a prudent approach to extrapolating those trends across the full year given promotion timing and broader operating environment. We believe we're taking the right actions on efficiency, product strategy and inventory management to position Traeger for sustainable long-term growth and profitability. To wrap up, fiscal 2025 was a year where the team executed through uncertainty. We delivered on our commitments, managed meaningful tariff pressure and drove structural changes that strengthened Traeger for the long term. We're approaching 2026 with strategic discipline to set the foundation for our long-term growth strategy. We are prioritizing inventory health and continue to invest behind the product and brand with a focus on extending our consumer reach. And we believe the work we've done through Project Gravity sets up a stronger foundation for operating leverage as we look beyond 2026. And with that, I'll turn the call over to Joey. Joey?

Thanks, Jeremy, and good afternoon, everyone. I'll walk through our fourth quarter and full year financial results in more detail, then discuss our balance sheet, cash flow and our outlook for fiscal '26. Starting with the fourth quarter and the full year, I'm pleased with how the business performed financially in a dynamic operating environment. In the fourth quarter, we exceeded the top end of our revenue guidance and delivered adjusted EBITDA in the upper half of our full year range despite continued elasticity following tariff-related pricing actions and ongoing pressure in m. For the full year, we delivered adjusted EBITDA of $70 million while executing through these pressures and making deliberate decisions to simplify the business. There are 3 financial takeaways from fiscal '25 worth highlighting. First, we successfully managed tariff exposure and protected profitability through disciplined pricing, supply chain actions and cost control. Second, consumables, including pellets, continue to be a source of strength and stability, reinforcing the durability of the reoccurring fuel model even in the cautious consumer environment. And third, we made meaningful progress on Project Gravity, delivering $20 million of cost savings in fiscal '25. This exceeded our original expectation of $13 million and represents an important step towards a structurally improved cost base and stronger cash generation profile. Turning to fourth quarter results. Fourth quarter revenues decreased by 14% to $145 million. Grow revenues were $61 million or down 22% compared to the fourth quarter of last year. Declines in our grow category were driven primarily by elasticity and an unfavorable mix shift as well as a difficult comparison related to the Wood Ridge load-in ahead of launch in the prior year quarter. Consumables revenues were $36 million, up 16% from the prior year. Consumables growth was driven by higher unit volumes across both wood pellets and food consumables. Accessories revenues were $49 million, down 18% versus the fourth quarter of '24. Revenues were pressured by negative sales growth at MEATER. Fourth quarter gross margin was 37.4%, down 350 basis points versus the prior year. Excluding $3 million in costs related to Project Gravity, adjusted gross margin was 39.5%, down 130 basis points, driven primarily by tariff-related costs, offset by lower promotional activity and supply chain efficiencies. Sales and marketing expenses were $23 million compared to $34 million in the fourth quarter of '24. The decrease was driven by the reduced MEATER investment and Project Gravity savings. General and administrative expenses were $22 million compared to $27 million in the fourth quarter of '24. The decrease is primarily driven by lower stock-based compensation expense as well as lower professional fees and employee-related costs as a result of Project Gravity. Net loss for the fourth quarter was $17 million as compared to net loss of $7 million in the fourth quarter of '24. Net loss per diluted share was $0.13 compared to a loss of $0.05 in the fourth quarter of '24. Adjusted net income for the quarter was $2 million or $0.01 per diluted share as compared to $2 million or $0.01 per diluted share in the same period in '24. Adjusted EBITDA increased 6% to $19 million in the fourth quarter as compared to $18 million in the same period of '24, demonstrating operating leverage in the model even at lower revenue levels. Turning to the balance sheet. We exited the year in a solid financial position after making the balance sheet health a leading priority throughout '25. Cash and cash equivalents were $20 million compared to $15 million at the end of '24. We had $403 million of short-term and long-term debt, resulting in total net debt of $384 million. Net debt declined by $10 million in fiscal '25 compared to the end of fiscal '24. Cash flow from operations was $16 million in the fourth quarter, driven by disciplined working capital management and Project Gravity cost savings. From a liquidity perspective, we ended the fourth quarter with ample liquidity of $162 million. Inventory at the end of the fourth quarter was $99 million, down from $107 million in the fourth quarter last year and down from $115 million at the end of the third quarter. While we have elevated meter inventory that we expect to work through in '26, we are pleased with the positioning of our Traeger branded inventory. Now turning to our outlook. As Jeremy outlined, fiscal '26 is a foundational year. From a financial perspective, it is a year of disciplined execution as we continue to focus the business on our highest return opportunities. For fiscal '26, we are guiding to revenues of $465 million to $485 million and adjusted EBITDA of $50 million to $60 million. As Jeremy mentioned, we expect a divergence between sell-through and sell-in in '26. Importantly, the year-over-year revenue decline implied by our guidance is driven by a small number of specific identifiable factors, not a deterioration in the underlying consumer demand. There are 4 primary drivers shaping our '26 revenue outlook. First, Project Gravity actions reflect deliberate decisions to exit or reshape lower return revenue streams, including the Costco roadshow direct-to-consumer commerce and certain international markets as we prioritize profitability and cash generation. Second, the annualization of tariff-related elasticity reflects pricing actions taken primarily in the second half of '25 to offset tariff costs. Because those actions were not fully in effect for the full year, we continue to see their impact carry into the first half of '26. Together, these 2 drivers are continuations of strategic actions taken in fiscal '25 and account for approximately $70 million of the year-over-year decline with just over half coming from Project Gravity actions net of recapture. Next, our outlook reflects deliberate actions to optimize marketplace health. We exited fiscal '25 with select pockets of elevated inventory, and we're proactively managing these positions to reduce weeks of supply. That inventory dynamic was driven by 2 largely timing-related factors in fiscal '25. First, advanced orders placed to mitigate anticipated tariff exposure and support country of origin transitions; and second, higher order volumes following a strong spring selling season before the full impact of pricing elasticity became evident. Finally, we are planning for continued competitive pressure in LTE as we reset that business. Taken together, these factors explain the expected revenue decline in '26 and importantly, reflect deliberate actions and timing dynamics rather than a change in the long-term demand profile of the Traeger brand. From a margin perspective, we are guiding to gross margin of 38% to 39% or down 120 basis points to down 20 basis points versus fiscal '25. Margin guidance reflects pressure from tariffs and deleverage on fixed promotional investments, partially offset by the benefits of Project Gravity. On operating expenses, we expect meaningful improvement in '26 as we realize the full year benefit of actions taken in '25 and continue executing Phase 2. In total, we expect Project Gravity to deliver approximately $50 million of adjusted EBITDA benefit in fiscal '26, reflecting roughly $30 million of incremental benefit on top of approximately $20 million realized in fiscal '25. Taken together, adjusted EBITDA for fiscal year '26 is expected to be $50 million to $60 million. Despite the year-over-year decline in adjusted EBITDA, we continue to expect strong free cash flow generation. While we do not typically provide free cash flow guidance, we currently expect free cash flow of at least $30 million in fiscal '26, driven primarily by inventory reductions and working capital management. This expected free cash flow will support continued net debt reduction as we expect our leverage ratio to remain comfortably below covenant levels throughout the year. I'd also note that our covenant calculation includes credit for cost calculations taken over the trailing 12 months, resulting in a lower leverage ratio than what you would calculate using published EBITDA alone. As a reminder, our revolver capacity will step down by $30 million in the second quarter as part of the amendment executed in '25. This has no impact on our operations. The remaining $82.5 million of capacity is fully available through December of '27 and currently undrawn. Our first lien term facility does not mature until June 2028. Turning to the first quarter. We are seeing some meaningful timing shifts from Q1 into Q2, so I want to provide explicit guidance for the quarter. Importantly, we expect first half seasonality to be broadly consistent with historical patterns, with 26 impacted by new product load-ins occurring in Q2 rather than Q1. From a margin perspective, we also expect some timing impacts between the first and second quarters, driven by promotional activity and direct import mix, which we believe will pressure gross margin rate in Q1 and benefit later quarters. For the first quarter, we are guiding revenue of $92 million to $97 million and adjusted EBITDA of $3 million to $7 million. As it relates to tariffs, our guidance is based on the tariff framework that was in effect through mid-February and does not incorporate the recently announced changes. Depending on market conditions, any incremental benefit could flow through a combination of improved gross margin, dealer margin support or pricing actions for consumers. Before I close, I want to step back and talk about how we see the business position beyond '26. As we move into '27, we believe several factors create a constructive setup for improved profitability. These include the continued realization of Project Gravity value beyond what is reflected in our '26 guidance, including the incremental $6 million to $12 million of value capture announced today as well as the potential for a more favorable tariff environment and improved alignment between sell-in and sell-through. As these dynamics come together, we would expect the business to begin to benefit from meaningful operating leverage as revenue returns to growth with a structurally improved margin profile and cost base. As a result, these factors support our view that fiscal '26 represents a transition year financially and that the business is positioned to deliver higher profitability and improved adjusted EBITDA performance as we move into '27 and beyond. And with that, I'll turn it over to the operator. Operator?

Our first question will go to the line of Brian McNamara with Canaccord.

First, I'm curious, where did the grill market finish in 2025 relative to 2019 levels in terms of industry volumes? And what is the company's expectation for grill market growth in '26, if any?

Thanks, Brian. So a couple of thoughts. First of all, after, of course, a very meaningful decline in unit volume between '21 and '22, the market has been modestly down the last handful of years. Last year, down probably sort of mid-single digits or so on a revenue basis. I don't have the exact numbers in front of me on unit volumes between last year and 2019. What I can tell you is that units are still down meaningfully. We, of course, we spent a lot of time thinking about, in addition to our strategy from a macro perspective, what are the catalysts to really to get the outdoor cooking category to return to more normalized replacement levels. Mathematically, we should be heading into that window. We did not see that last year, and that was probably in part driven by the fact that tariffs really hit in the spring, and we saw this corresponding very, very material drop in consumer confidence. But we are now 6 years removed from the beginning of the pandemic, and that should be when consumers generally begin to think about replacing other grills, at least the Traeger Grill in terms of the ownership life cycle that we observe. I will say this has been historically a remarkably steady category. And what we've seen, of course, is unusual since the pandemic. But our expectation is that the market will recover. There are just as many, in fact, slightly more outdoor books than there were pre-pandemic. And so this is more around the replacement cycle. I will say that we have not forecasted in the guidance that we've offered, we have not forecasted a return to a more normalized replacement cycle because it's hard to know exactly when. We just believe that this is a very durable category and then it will return to those more normalized levels. So we're heading to that period at some point in time, certainly over the next 12 to 24 months. The other thing that I would add that I think is relevant as we think about brand position and engagement as the category improves is that this is a brand that has been very consistent in terms of the consumer engagement. We observed, for example, in the fourth quarter, connected cooks up 11%. We still -- we continue to see strong pellet attach, which, of course, is another important measure of engagement for us. So we're very focused on the things that we can control. We're not forecasting the next cycle, but we believe that we're getting closer to it.

Great. You actually answered my second question. So good on you there. My next question is, how big is the expected revenue impact from the DTC exit? And what is the underlying assumption for sales recapture with your retail partners? And in addition to that, I guess, why wouldn't we see a bigger margin boost there? It sounds like Project Gravity is accounting for kind of $50 million of the $50 million to $60 million EBITDA guidance, if I heard that correctly.

Sure. Brian, it's Joey. As far as what we're speaking to right now, we spoke originally around the $60 million just recapture or sorry, a $60 million impact in terms of just overall the shift out of DTC, Costco roadshow and international. That was on a rear-looking number. On the go-forward number, it's a little bit smaller. What we can say is overall between the full year pricing elasticity and Project Gravity, the shift there is around $70 million of the total revenue impact. And if you're doing the math on the P&L flow-through, we have margin rate pressure, and that's driven by full year tariffs and promo deleverage. And that's probably if you're doing the math on why there's not as much flow-through.

Our next question will go to the line of Peter Benedict with Baird.

This is

Yes, of course. So let me start with the SKU rationalization, and then I'll lead into some of the thoughts on pricing and sort of how it impacts our product line or how we think about product strategy going forward. The intent of SKU rationalization was it was twofold. First of all, I wanted to streamline the product portfolio so that we create efficiencies in manufacturing and inventory. There are certainly opportunities to, in a modular way, ensure that we're just driving more volume in assembly, in subcomponents and fewer SKUs, of course, leads to lower inventory levels. That's sort of thought number one. Thought number two is that the rationalization also has consumer benefit. Our ability to create a more clear line, a clear line with a clear step-up story and real clarity from a consumer decision process also was an underlying motivation of the rationalization. These things take time. Of course, we are in a consumer durable, we're looking years out from a product line perspective, and we will sunset certain SKUs beginning this year, but over the next 2 to 3 years. And so as you saw from some of the increased value capture of Gravity, some of these things extend out into '27 and into '28. But we believe in that. We think it's going to make us a better, more focused business, and we have begun this process. The pricing is -- I will say, really forecasting price elasticity last year was challenging. not only because our prices were moving around, but it was a very dynamic environment, not knowing how competition was going to price, being a discretionary, high-ticket discretionary durable, how decision-making on the consumer part relative not only to this category, but thinking about other discretionary purchases that they'll make. We're getting sharper on elasticity. I would say that one of the learnings is that during promotional windows, there is there's greater elasticity. And -- but I would say on balance, we're feeling pretty good about how we've priced our products, and it's given us confidence where we are going forward. We'll continue to evaluate this. There -- as has been announced over the last week or so, there have been some shifts in tariffs. We haven't forecasted any of that in our guidance, but there is some decline in our tariff rate, which will give us the ability to sort of step back and think about how do we allocate those savings. Where will we get value in reducing MSRP versus value in allocating some of that to our dealers where there is some additional margin need. And of course, to the extent that some of it gets allocated back to Traeger, how do we think about that from a business reinvestment perspective. As it pertains to our product strategy relative to what we've learned about elasticity, I would say that it really doesn't change how we think about the future. It takes it takes 30 to 36 months to bring a durable -- this durable, which is a highly engineered product with firmware, software, industrial mechanical design from concept to consumer launch. And so it's hard to really build a product line around macro environment trends. But I think what we've learned is that although there has been a little bit of pressure on price point as consumers have tightened their belt, notably last year as we saw consumer sentiment decline meaningfully -- what we believe and what we see -- what we have seen in cycles over time is that the consumer will return to price points in better times where they are comfortable, but also where there is a reason to purchase. So those features and those innovations that may be slightly discounted in a down period, we believe a consumer will continue to value. And so we think about our product line going forward in a very similar way. Of course, we're always learning from the consumer, and we're always thinking about how should our brand be positioned long term. On a positive, and this just happens to be a nature of where we are in our product development life cycle, we're launching a couple of new products this year in the second quarter. As is our strategy, we really launch innovation at more premium price points, and we cascade that innovation downstream as we understand consumer value of certain products and features and as we understand how we get scale from a product manufacturing perspective. And it so happens that where we are in that life cycle, the 2 product platforms that we're launching this spring, they're sub-$1,000 products, which are -- which is certainly very appropriate for the moment in time. But otherwise, we don't shift our product strategy relative to the cycles that we're in.

Our next question will go to the line of Peter Keith with Piper Sandler.

So just trying to understand the revenue decline and maybe how you're thinking about general demand trends. So I'm going to kind of interpret what you've told us, which was some good detail. So we've got an $85 million revenue decline at the midpoint for the year. It sounds like $70 million of that is from exiting the Costco roadshows, DTC and then some demand elasticity impact from pricing. So there's sort of a $15 million delta that I'm trying to get my arms around. Is that a sort of a lack of sell-in because of the orders last year? Is that demand declines? Kind of how should we think about that other chunk of revenue decline?

Sure. Thanks for the question. So just to be clear, there's -- we're planning on sell-through. There's a divergence between sell-through and sell-in in '26. And sell-through, we're planning to -- current sell-through trends in the beginning of the year are exceeding our expectations. We're planning on sell-through to be in line with the overall category, and that's sort of flattish. So keep in mind, there's a divergence there. As far as the remaining $15 million, there's sort of 2 factors driving that. One is ongoing meter pressure. And the other is we're calling it marketplace health initiatives. We have as Jeremy mentioned, we have specific inventory pockets in a specific retailer that have higher weeks of supply inventory in market than we would like, and we're going to rightsize the inventory. And keep in mind, pricing elasticity, project Gravity reduction in revenue and marketplace health initiatives are strategic in nature. MEATER is -- we're addressing MEATER through the centralization of the MEATER office here in Salt Lake, leveraging the fixed cost infrastructure. We're resourcing the plan and the business to drive ongoing growth. So if you're doing the math on that, it's really focused on that marketplace health initiatives in MEATER.

Okay. Yes. That's the detail I was looking for. And that -- just a follow-up on that, that marketplace pressure, that's just with one retailer where you're trying to rebalance the inventory? Or is that across a variety of retailers?

Generally speaking, yes. It's a distinct pocket of inventory. And keep in mind, it's high-volume inventory, it's high flow-through, and that also puts pressure on overall margin. And the other thing point I'll make on that is as we rightsize marketplace, this is the marketplace health initiative. There's going to be a role in FY '26, but this will create capacity in '27 and beyond, and we'll be able to fill that capacity, and that's why we're confident in the future growth algorithm.

Yes. Yes, that makes sense. Okay. And so then my last question, and I think you partially addressed this in your last answer, but we're looking at the decremental margin on the revenue declines, it's around 30% this year, pretty similar to last year. And I guess with Project Gravity, one would think that maybe the decremental margins would be coming down this year. So why is it a similar level of 30% decremental on the EBITDA margin with the revenue decline?

Yes. I think we need to focus on overall gross margin and gross margin is being impacted full year of tariffs. So last year, tariffs were announced -- they were announced in February, but they were relatively low in the first quarter. Liberation Day, I believe, was in early April, and then we had a much higher tariff burden. They've sort of settled throughout the year. So we have a full year of tariff impact. So that's driving some margin degradation. The other is what we're calling is promo funded deleverage. So we invest a fixed promo number into our P&L every year. And with the overall revenue coming down, it's eroding margin. That is also going to drive margin expansion in the out years as well as we get to more normalized revenue numbers.