Weber Grill accessories go on sale at a home improvement store July 23, 2021 in Palatine, Ill.
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Weber Shares fell 17% in morning trading on Monday after the barbecue maker suddenly said CEO Chris Scherzinger was leaving amid waning demand for its products in stores and online.
The Illinois-based Palatine Corporation also suspended its quarterly cash dividend and said it was committed to working with its lending partners to stay in compliance with its credit facilities.
Webber has appointed chief technology officer Alan Matola as interim CEO, effective immediately, as he searches for a permanent replacement.
“We are taking decisive action to improve Weber’s position to address historic macroeconomic challenges, including inflationary and supply chain pressures affecting consumer confidence, spending patterns and margins,” said Kelly Renko, Non-Executive Chairman of Weber Council.
The company also announced preliminary results for the three-month period ending June 30, pegging net sales between $525 million and $530 million. Webber said its performance was affected by the slowdown in retail activity as rising inflation and other pressures weighed on consumers. It was also affected by the continued depreciation of foreign currencies.
Weber said headwinds are expected to continue into the fourth quarter of the fiscal year and has withdrawn its financial forecast for 2022 due to market uncertainty.
The company said it was considering layoffs and other ways to cut expenses, including by tightening its inventory. It said it will provide additional details when it announces its third-quarter financial results on August 15.
Weber, which makes smokers, barbecue grills and other accessories for outdoor cooking enthusiasts, was announced last year as families spent more time cooking and entertaining at home during the pandemic. Lately, though, demand for cooking products has slowed as consumers rethink spending amid inflation and the prospect of a recession on the horizon.
In the quarter ended March 31, Weber’s net sales fell 7% and a net loss was $51 million, compared to net income in the same period last year.
Scherzinger Joins a Growing List of CEOs They left retail businesses in recent monthsfrom Gap to Game Stop, as councils grow increasingly dissatisfied with sluggish performance, persistent supply chain disruptions and other challenges.
Weber’s shares are down about 42% year-to-date, as of the market close on Friday.
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