Hello and welcome to today's Weber Inc. second quarter 2022 earnings conference call. My name is Bailey, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to Brian Eichenlaub, Vice President of Investor Relations and Treasury. Brian, please go ahead. Good morning, and thank you for joining us today for our second quarter fiscal 2022 earnings call. I'm joined this morning by Chris Scherzinger, our Chief Executive Officer, and Bill Horton, our Chief Financial Officer. I'll start with our forward-looking statements disclaimer. As you are aware, certain statements made today, such as projections for Weber's future performance, are forward-looking statements. Actual results could be materially different from those projected. For further information concerning factors that could cause results to differ, please refer to our public Form 10-Q SEC filing, our earnings release, and our SEC filings, all of which are available on the company's website. During the call today, the company may also discuss certain non-GAAP financial measures. For a reconciliation of these measures to GAAP reporting, please refer to the company's earnings announcement, which has been posted on the company's website at investors.weber.com and can be found in the company's SEC filings. A recording of today's webcast will be archived for at least 90 days on Weber's Investor Relations website. Now I'd like to turn the call over to Chris. Thank you, Brian, and good morning, everyone. Like other companies, we faced a challenging operating environment in our fiscal second quarter, but we believe Weber has navigated the volatility well. I'd like to take a moment to reflect on the major global dynamics that have risen to the forefront since our first quarter update back in February. First, supply chain complexities persisted through the quarter, which continued to impact operations. Additionally, rising inflation paired with geopolitical uncertainty drove market turbulence and pressured consumer shopping behaviors globally. We remain highly confident in our leading market position and strategy, but these external factors have changed our outlook for the balance of fiscal year 2022. We will discuss this in detail after reviewing the second quarter results. Before that, I do want to acknowledge the tragedy in Ukraine, which erupted shortly after our last earnings call. We have since suspended our commercial operations in Russia, resulting in a $25 million revenue reduction. We have many employees globally with ties to Ukraine, and we are supporting them as best we can. I'm particularly moved by the efforts of our team in Poland, who not only continue to make great progress on operational initiatives at our new plant, but many of whom are hosting refugees in their homes and donating their time and resources to help Ukrainians. It is this type of spirit that makes Weber a special place to work, and I'm proud to be part of this team. Weber has operated through many economic environments over the last 70 years. We've faced every type of cycle, every recession, every inflation surge, every war, and we have navigated them all to achieve consistent and resilient sales growth marked by a 10% CAGR all the way back to 1980. While we expect current macroeconomic headwinds to continue through 2022, we are confident we will manage this market cycle well, just as we have in the past. The reason is that Weber is as durable as the products we make. We have the right brand, the right strategy, the right global team, and the right operational footprint to drive the company's long-term success and unlock substantial value creation for shareholders. With that said, I'll turn now to our operational and financial performance for our second quarter. We're pleased with the progress made against strategic initiatives in the quarter to maintain our position as the clear global category leader, to drive large sequential improvements to our gross margin, to further optimize our unique global manufacturing and distribution capabilities, and to continue to deliver the highest quality, most innovative products and best service to our consumers around the world. For the second quarter, net sales were $607 million, which was down 7% versus the prior year period and down 4% excluding a negative 3% impact of foreign exchange rates. This sales performance is still markedly above 2020 levels, with Q2 sales from 2020 to 2022 up 46% on a two-year stack basis, or $180 million. Compared to pre-pandemic 2019, our Q2 sales this year are up 35% and fiscal year to date sales are up 37%. We generated $86 million in adjusted EBITDA in the quarter, down from $149 million in the second quarter of 2021. The decline is a result of a year-over-year sales decrease attributable to the challenging supply environment, the significant devaluation of the euro, and the inflationary cost of goods impact we've been discussing. We're pleased that the pricing actions we took last fall and in Q2, which were fully accepted, are offsetting these challenges and favorably impacting gross margin. This dynamic will continue to improve over the next several quarters. We continue to experience significant cost increases in commodities and inbound freight, with container rates up 3x-4x versus prior year levels. These increases will continue to produce difficult comps for the rest of fiscal year 2022, but we do believe that inbound freight costs have stabilized, and we don't see additional near-term risk of further increases this fiscal year. As I just mentioned, we addressed inflationary cost pressures through pricing and other tactical initiatives, and we're pleased to report the effectiveness of these actions. Taking price when we did drove gross margin improvement of nearly 12 percentage points above first quarter results. This margin expansion effort will help us achieve improving year-over-year gross margin comps for the rest of fiscal year 2022 and well into fiscal year 2023. Bill will provide more context around this strong gross margin improvement. I'll turn now to our operating environment. Since the beginning of March, the industry has seen a significant drop-off in year-over-year point of sale data, with sharply reduced shopper traffic both in retail stores and online. This can be partly attributed to unfavorable weather in the early spring months, as well as a return to travel for many families enjoying a spring break. In addition, there is meaningful inflationary pressure on consumer spending behaviors globally, and in some regions, significant consumer distraction related to the Ukraine conflict. The sales data and trends we are monitoring inform our financial outlook for the fiscal year. Based on these evolving macro factors, combined with recent changes to the valuation of the euro, we now expect our net sales to be between $1.65 billion and $1.8 billion. Flowing that update through to the bottom line, we expect adjusted EBITDA to be between $140 million and $180 million. Bill will present a breakdown of the drivers behind these numbers in a moment. Weber's decades of commercial and operational experience across global markets offer deep insights into environments like the one our industry is facing today. With these external pressures in full view, we have taken decisive actions, which include the following. First, taking pricing action to offset cost headwinds, the most recent of which was announced in early Q2 and took full effect in early Q3. Second, reducing SG&A spend while still amplifying our new product launches to grillers globally. Third, driving two key operational initiatives that will improve our efficiency and gross margin performance well into the future, a global ERP upgrade across all regions, and the startup and now expansion of our new Poland manufacturing plant. Fourth, and finally, investing for future growth with continual product and technology innovation, including an exciting range of new products teed up for 2023 that build on this year's launches. These initiatives are consistent with our existing strategic growth priorities. As a reminder, these priorities are to introduce disruptive new products, accelerate direct-to-consumer revenue and e-commerce, grow with new retail customers and drive new consumer revenue streams, expand in emerging geographies, and finally, to execute value-enhancing operational initiatives. These growth priorities continue to be the foundation of our go-forward strategy and business roadmap. I'd like to highlight the progress we're making in 2022. Earlier this year, we unveiled three new product lines that transform the outdoor cooking experience, designed to fuse the best in smart technology, high quality materials, superior performance engineering, and craftsmanship. First is the 2022 Genesis smart gas grill lineup. Second is the all-new Weber Crafted outdoor kitchen collection of grillware accessories. Third is the Stealth Edition of the SmokeFire smart wood pellet grill line, which is a Red Dot product design award winner this year. These products are revolutionizing the way Weber owners grill and gather for outdoor meals. The smart technology experience is nearly doubling usage of our Weber Connect platform, which we believe will only further solidify first-party data relationships with our already loyal user base. Creating innovative products not only improves families' cooking experiences, but also drives top and bottom line growth through accelerated purchase frequency and trade-ups, as well as increased frequency and value of accessory purchases in between major grill purchases. The experiences these products deliver are resonating really well with our consumers. Our 2022 innovations are receiving an average 4.8 out of five stars from purchasers online, which bolsters our consumer satisfaction scores. As a reminder, our global satisfaction score remains exceptionally high at 91%, with 96% of Weber owners recommending Weber to their friends and family. Additionally, Weber continues to be recognized as the global barbecue leader by grilling enthusiasts through recent awards that stretch across our uniquely diverse range of product segments. These include Best Gas Grill of 2022 by CNET, Best Overall Electric Grill by MarthaStewart.com, Best Charcoal Grill of 2022 by Gear Patrol, and Best Portable Grill by Wired Magazine. We also received best grill accolades from a wide range of publications in tech, fashion, and culinary arenas globally, such as Engadget, T3, British and German GQ, The New York Times, Food Network, Epicurious, Yahoo, and many more. Weber was even named the most trusted barbecue grill brand of 2022 by Lifestory Research based on their evaluation of consumer trust in brands found inside and outside the home. Our brand is as strong as ever. Among global grill brands, Weber engages the largest community of grillers online by more than double, approaching 4 million followers across social channels around the world. Further, our engagement is outpacing the competition on Facebook, Instagram, and Twitter. Our community even extends outside our Weber-owned channels with fans who have started forums across Facebook, Reddit, and other third-party community sites. These organic forums are great Weber communities, with members sharing their passion for grilling with Weber products on a daily basis. Our marketing and influencer teams actively engage with these forums, providing them with access to resources, products, and experts. As I said, we are the global category leader with an immense industry-leading installed base of more than 55 million Weber households worldwide. Building on that base, we are entering new markets and growing brand awareness and household penetration. That's demonstrated by our results in emerging geographies. For the quarter, sales in emerging countries grew 26% over the prior year quarter and represented 12% of our global sales versus 9% of sales in the second quarter of last year. We see more opportunity and white space in these emerging markets, and we're not taking our foot off the accelerator. Lastly, I wanted to touch on the progress against our value creation strategy. Last fall, we achieved a major milestone in our multi-continent manufacturing strategy as we began producing grills at our new Poland plant. Initially, this facility was designed to manufacture two key product lines for Europe. However, given the outstanding results year to date, which have exceeded our throughput and cost savings expectations, we have begun the build out of an expansion that will nearly double the capacity, expand the number of product lines manufactured there, and enable us to serve other regions outside Europe, including North America in early 2023. We anticipate the expansion will be completed and fully operational by the fourth quarter of this year, and will serve as a key competitive differentiator for us in driving long term value for Weber shareholders. I'll say it again, Weber is as durable as the products we make. The challenges we are seeing are trying, but they're temporary. We are highly confident in our strategy and our ability to not only mitigate our exposure in this market, but to set ourselves up for continued long term growth and the clear category leadership we've consistently demonstrated over the last 70 years. We remain exceptionally well positioned and uniquely so with the best brand, the largest geographic and consumer footprint, the only global manufacturing footprint, the best innovation engine, and the best team in the industry. I would like to thank our team members for their continued resilience, passion, and commitment to serving our customers and loyal Weber fans as we continue to focus on delivering value to our shareholders. With that, I'll pass it over to Bill Horton, our Chief Financial Officer, to discuss the second quarter financials and guidance in greater detail. Bill? Thanks, Chris, and thank you everyone for attending our call today. During our fiscal Q1 earnings call in early February, I discussed the seasonality of our business in which the second and third quarters have historically represented approximately 70% of our annual sales. Through January and early February, sales were generally in line with our expectations, with most of the sales being retailer load in of our products in advance of the late March through mid-July heavy POS driven sales period. However, in late February into early March, we saw two dynamics that impacted our selling results. First, component part availability from suppliers continued to bring challenges to our supply chain, impacting our ability to manufacture and distribute our products to customers. This left us with more than $50 million of unfulfilled customer orders at the end of fiscal Q2. These are firm orders that will be delivered with a timing shift from Q2 to Q3. Second, we noticed a significant drop off in retailer foot traffic, both in key brick-and-mortar retailers and online, primarily in the U.S., which started to generate declines in early season point of sale data for the outdoor grilling category. We are seeing in real time how today's macroeconomic headwinds are impacting grillers and retail foot traffic, and this will likely have negative impacts on outdoor grilling category POS in the near term. This is reflected in our fiscal 2022 outlook that I will speak to shortly. Now let me summarize our second quarter actuals. Our fiscal second quarter continued to trend from the last three quarters, with sales and income down versus the comparable prior year period, but with very strong growth on a two-year stack basis. As a reminder, the last three quarter growth rates we've comped against were +82%, +83%, and +52%. Our focus is on executing against long term objectives that drive sustainable growth. Our top priority remains building off of our established momentum, generating consistent growth compared to our sales activity prior to the pandemic period, which brought on unprecedented lockdowns. To this end, second quarter fiscal 2022 net sales decreased 7% or $47 million to $607 million from $654 million last year. Of the year-over-year sales reduction, foreign exchange accounted for $20 million, driven by US dollar strength against the euro and Australian dollar. Excluding the impact of foreign exchange, net sales declined by just 4%. On a two-year stack basis, sales increased 46% above 2020, or $180 million from $427 million to $607 million. Even amid today's challenging operating environment, we are finding ways to drive meaningful growth compared to our pre-pandemic performance. For the Americas, net sales decreased 18% or $67 million to $306 million from $373 million last year. As a point of reference, in the second quarter of 2020, America's net sales were $235 million, and on a two-year stack basis, revenue increased 41% versus Q2 of 2020. For EMEA, net sales increased 9% or $22 million to $268 million from $246 million last year. Excluding the impacts of $18 million of negative foreign exchange headwinds, net sales grew 16%, and on a two-year stack basis, net sales increased 47% compared to Q2 of 2020. Successful retail sell-in ahead of grilling season and other consumer outreach engagements have allowed us to continue to achieve strong growth and expand the Weber brand throughout the region, despite our decision to suspend operations in Russia. As Chris mentioned earlier, expanding into emerging geographies is a key focus area. In Europe, emerging country sales grew 31% over the prior year, led by the UK, Italy, Denmark, and Norway, who all exhibited strong sales growth for the quarter. In Asia Pacific, net sales decreased 6% or $2 million to $34 million from $36 million last year. For the quarter, foreign exchange negatively impacted sales by $2 million, primarily driven by the Australian dollar weakness against the dollar. On a constant currency basis, sales were flat year over year. Severe flooding in certain regions in Australia also adversely affected product demand, while regions unaffected by the flooding grew well. On a two-year stack basis, APAC net sales increased 157% compared to Q2 of 2020. Our Asia Pacific team continued to generate brand and channel growth through a multitude of activities, including sponsorships, outdoor cooking events, marketing campaigns, and social media engagement, and those activities are yielding solid results. As one example, our name sponsorship of the Women's Big Bash League in Australia was an overwhelming success. For the quarter, gross profit decreased $77 million or 27% to $209 million from $286 million last year, and gross margins decreased 932 basis points to 34.3% from 43.7% last year. If you recall, during our first quarter earnings call, I mentioned we had initiated incremental pricing actions to address unprecedented cost challenges with inbound freight, material cost inflation, tariffs, and supply chain disruption at historically high levels. I discussed how price increases were staggered, that the favorable Poland plant results were skewed towards the back half, and that we would continue to improve gross margin comparisons as we move through 2022. To emphasize this point, 73% of our commodity and inbound freight cost variances are in the first half of this fiscal year, and only 35% of the full year effect of price increases are realized in the first half. As we move through the balance of the year, you will see a rising effect of our pricing action, resulting in continued sequential gross margin improvement through 2022 and well into 2023. For the quarter, we made significant progress against our recovery plan as we improved gross margins by nearly 12 percentage points from 22.6% recorded in the first quarter to 34.3% in the second quarter. With the exception of the net sales miss and continued FX headwinds in the quarter, our gross margin assumptions were in line with our expectations during our Q1 call. Selling, general, and administrative costs for the second quarter decreased by $18 million or 10% to $166 million from $184 million last year and decreased 77 basis points to 27.3% from 28.1% of sales last year. The decrease was primarily driven by specific cost-cutting actions taken across the company. We believe our SG&A actions will continue to improve profitability throughout the remainder of 2022. For the quarter, net income decreased by $120 million to a net loss of $51 million from net income of $69 million in the prior year. As previously discussed, the decrease was primarily driven by higher inbound freight costs, higher commodity costs, and increased income taxes. Adjusted EBITDA decreased $63 million to $86 million from $149 million last year. For the second quarter, adjusted EBITDA margin came in at 14.2% versus 22.8% last year. As previously discussed, cost of goods sold and foreign exchange headwinds accounted for 930 basis points of the EBITDA margin reduction, offset slightly by our pricing actions and SG&A savings. For the six months ended March 31st, net cash used in operating activities increased to $243 million from $215 million in the prior year. Increased cash usage was driven by global supply chain challenges, leading to increased inventory levels and inflationary cost increases in raw materials and inbound freight. In the quarter, we added a $250 million incremental term loan B, which brought total liquidity to $313 million, and we remain in compliance with our credit agreement. Now, turning to fiscal year guidance. We believe that 2022 will be a story of two distinct halves. In the first half of the year, global supply chain disruptions and inflationary pressures led to a significant cost challenge that we addressed by taking decisive pricing and cost reduction actions. As we look at the second half of the year, our pricing and cost-cutting actions will sequentially improve margins, but the effects of inflation will impact consumer sentiment and sales volume. Earlier, we called out the drop in year-over-year point of sale data and low foot traffic, both in-store and online in key channels. These recent consumer traffic patterns across both channels will impact our business as grilling season kicks into high gear. As Chris mentioned, we are resetting our 2022 fiscal year guidance. Our fiscal year sales outlook range is $1.65 billion-$1.8 billion, and our adjusted EBITDA range is $140 million-$180 million. We want to provide some additional context for you as there are a few drivers within this range. As we have discussed, if early season POS and retail traffic trends continue throughout the season, it would have a negative impact on sell-through projections and thus reduce Q3 replenishment orders and top-line results. This is the single largest driver of our guidance, and any upside would have a positive impact on our results. In addition, given 30% of our business is conducted in euros, we have seen a material negative effect from FX. When we last spoke to you, the euro to USD was 1.14, and this has come down to 1.04, which has impacted the midpoint of our EBITDA range by over $40 million. Finally, should volumes come down, we would have fixed cost absorption impacts. Importantly, this revised guidance still outpaces our pre-pandemic sales levels above fiscal 2019 by $428 million and 2020 by $200 million, and we are continuing to build on the momentum generated over the last few years. We are also working hard to outperform these numbers. As Chris referenced earlier, since 1980, Weber has grown at a 10% CAGR, and it has not necessarily been linear in macroeconomic event years like this one. I want to reiterate the points Chris made earlier. The fundamentals of our business remain strong, and we have the right team and strategy to take on the current operating environment. We are going to transition directly into questions now ahead of concluding remarks from Chris. Operator, I'd like to open up the call for questions. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, please press star followed by one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. Our first question today comes from Robert Ohmes from Bank of America. Robbie, please go ahead. Your line is now open. Hey, good morning, guys, and thanks for taking my question. It's actually two questions. The first is, you know, Chris, can you maybe talk more about the customer, if there's a customer behavior shift that you can discern from what you're seeing? Are your wholesale partners talking about different shifts in categories of your grills? Are they gravitating to lower price points? You know, any kind of thoughts on what you may be seeing in consumer adjustment to the high inflation environment? Sure, Robbie. Thanks, and thanks for the question. You know, it starts with traffic, I think. I would tell you know, a lot's changed in the world since our last conversation in mid-February and the dynamics in Europe to start with, because you know, as a global brand, we monitor the answer to your question in a few different continents. As in Europe, the impact of the Russian invasion in Ukraine certainly sent consumer anxiety and just general societal anxiety, I think, into disarray there around you know, consumer confidence and focus, if you will, or distraction relative to the category. That's been true in the U.S., although I think more driven by the macroeconomic factors around inflation and, you know, the devaluation of 401(k) accounts. Also, I mentioned comments even for the month of March, which is largely what we're basing this judgment on, although clearly it's informed by April as well. The consumer behaviors in March were impacted by even the return for the first time in three years to taking a spring break, which was, I think, a really impactful dynamic to consumer behaviors in March. It starts with traffic, and I think that's what we saw between February and March was a substantial falloff, almost like flipping a light switch on March first. There was a substantial falloff in retail traffic, and that's true both in brick-and-mortar and in online retailers. That consumer traffic is where we started the conversation in terms of modeling consumer behavior. That's continued to lag, honestly, even since March. That informs our decision on the guidance. Relative to the consumer dynamics on trade down or maybe differences across segments, we haven't seen differences across segments. It's been fairly consistent between gas, charcoal, electric, pellet, and even accessories. You know, I think in general, the traffic is driving it at a macro sense at a category level, and it's less about consumers being in the category, but making different choices in the category. Relative to pricing, you know, we have taken a lot of pricing, and we're not alone. I think everyone in the industry has taken a lot of pricing in the last year and a half, and that does create price elasticity issues. Something we are keeping an eye on is how the increased prices versus, let's say, pre-pandemic levels, how is that affecting the unit volume takeaway or consumer choices at various price points? Generally, I would say we haven't seen anything early season that looks differentiated between, you know, more expensive grills in our lineup versus more discount grills in our lineup. The last thing I would say, Robbie, is we've launched a lot of innovation this year, and our primary innovation on gas grills, as I mentioned earlier, is on Genesis, which tends to be our premium line. What we're trying to do with our more expensive grills is bring an entirely new value equation to the table, where the innovation, the addition of technology, the addition of some of the features and benefits that are new to Genesis earn the pricing. That's where we're trying to fight against price elasticity, is to deliver increased value propositions to consumers that really make it worth the money. That's really helpful. Just a quick follow-up maybe for Bill. Is the sort of changing environment, should we think of a lower long-term adjusted EBITDA margin target for Weber? No, Robbie. Thanks for the question. For the long term, no. It's important to note that, you know, with if you look at our Q2 results, with the exception of the sales shift, which was driven really by the supply chain complexity, you know, we would have been right on our margin assumptions, and we were on our general margin assumptions in the quarter. All the actions we've taken on pricing, costing, and cost cutting are right in line with our expectation. We feel confident about the actions we put in place. You saw the sequential gross margin improvement from Q1 to Q2. We're guiding to the fact that it's gonna continue for the foreseeable future. Obviously, our 22 EBITDA margins are down versus prior year, but for the long term, we feel confident in the glide path that we've projected going forward. Got it. Thanks so much. Thanks, Robert. Thanks, Robert. Thank you. The next question today comes from Simeon Siegel from BMO Capital Markets. Simeon, please go ahead. Your line is now open. Hey, good morning. This is Dan Stroller on for Simeon. Thanks for taking our question. Given the strength of gross margin relative to the last few quarters, just was hoping you could speak a bit about the successes you've had in controlling that line operationally versus the macro pressures and how that could progress for the rest of the year. Thank you. Yeah, thanks, Dan. I'll take this. You know, as I mentioned in the last question, you know, taking pricing action when we did drove gross margin improvement sequentially, as you called out, almost a full 12 percentage points. Just versus last year, pricing drove 770 basis points of improvement, and this was up from Q1's impact of 330 basis points. You've heard me talk about how there is a bit of a lag. You know, the one call that I'll make just to emphasize on margin is we took into our first half of the year almost 75% of our cost of goods sold variances, just the way that our inbound freight accounting works. We took the bulk of that in the first half of the year. Our pricing impact, we only realized about 35% in the first half of the year. What you're seeing in our margin progression is, and you'll continue to see this, is the result of the pricing action and some of the actions we're taking on COGS to kind of control the environment. In the supply chain in particular, the one thing I would say we've done, or a few things we've done, we adjusted our inbound supply of finished goods and components as we saw retail foot traffic begin to slow, as Chris alluded to. We adjusted our inbound supply of finished goods. We continue to adjust our factory output and mix to make sure we're balancing inventory levels to the evolving demand picture. The other point is Poland is fully operational as we expected. You're gonna continue to see the benefits of the Poland plant, which again helps us from inbound freight costs, tariffs, and just productivity within the facility. Does that answer the question? Yeah, that's helpful. Thanks, Bill. Maybe just on inventory, any color you could shed on what it looks like at retail, maybe in terms of weeks of inventory or anything? Thank you. Yeah, I would say generally we feel good about where our retailer inventories are both in the U.S. and in Europe, where we get reasonably good data. You know, generally overall, it's up about 15% year-on-year trade inventory. If you think about what's happened with pricing, where we've taken, you know, three consecutive price increases to the trade, again, followed by competitors, most of the trade inventory increase is driven by price. I would say, you know, across the board, we're feeling really good that if the retail traffic picks up and if POS picks up towards the higher end of our guidance, the trade is positioned and we are positioned from an inventory standpoint to fulfill that demand. Awesome. All right, thanks. Best of luck. Thanks, Dan. Thank you. The next question today comes from Megan Alexander from J.P. Morgan. Megan, please go ahead. Your line is now open. Hi. Thanks very much for taking our question. You know, I guess on the first one, have you seen any improvement in POS trends? Maybe as, you know, the weather's broken in the Northeast, it's gotten a little bit warmer up here. If not, like, how does that inform your view and, you know, the rest of the selling season? Megan, this is Chris. Thanks for the question. I think we have seen some green shoots, I would say, in just the last couple of weeks. I think your point on weather is well taken. It was unusually cold and wet March and April in the Midwest and in the Northeast, and so that's just in the last week or so shifted. We're watching that in real time. We know we've been in this business for a long time, for 70 years, and so we know how a cold, wet month in the spring can slow things down to start the year. Certainly there's hope and optimism that as weather improves, so will consumer shopping patterns and POS tied to those that traffic assumption. However, I would say the best way I can phrase it is that the April point of sale actuals and even early May did inform our guidance. While we saw the downtick from February into March, that was sharp, and it started to show some of those green shoots in recent weeks. We're still basing our guidance based on a, I would say, a more conservative scenario. I think we're just trying to be prudent here and not. You know, hope's not a strategy, I like to say. We're trying to use the data that we have in front of us to guide the range. The reason the range is as wide as it is is because if at the lower end of the range, you would expect to see that March trend continue through the entire year. You know, that's a conservative outlook given your observations on weather. You know, anything we do better than what we saw in March climbs up to the higher end of the range and goes from there. I think the point of sale outlook is conservative. You know, our fingers are crossed for things to turn. They have turned some, but they haven't returned back to, you know, maybe where we would all want them to be. That's generally the story on POS. One thing I would say, Megan, to add on that though, I guess, is we have a lot in front of us, obviously. At this time of the year, let me just frame it kind of front half, back half. I think Bill mentioned we get 40%-45% of our sales in the second half of the year, but we get 65% or more of our point of sale in the second half of the year. We have the three biggest weekends of the category are in front of us in North America. That's Memorial Day, Father's Day, and Fourth of July. Those weeks can be big enough in the seasonal category like we operate in, that can definitely change the trajectory of what the season will look like. There is still a lot in front of us. We're just trying to be conservative. Got it. That's helpful. You know, I guess as a follow-up, can you just talk about, you know, the levers you can pull if trends maybe, you know, POS stays this weak, or if they worsen, you know, whether it's more promotional support at retail or if you'd pull back on price increases? I guess I'm just trying to understand, you know, how you think about the trade-off between stimulating demand and protecting margin. It's a good question and a good dialogue that we have on a day in, day out basis here as we're running the business. I would say, we have been early in our actions so far, and so we saw the costing earlier than most in the category, and we took the pricing earlier than most. That's helped us. It's why the gross margin story is the way that Bill described it earlier, and that's really important. I don't see us rolling back price increases. We do have a promotional calendar, and we do have marketing investment, whether that's in, digital marketing and demand generation among consumers, where, things are going really well. Actually, our consumer engagement in social media and some of our influencer activities is substantially higher than it was this time last year. We are seeing underlying consumer interest in grilling to be quite strong, like just as strong as it has been over the last couple of years. I think as you contemplate what that means for the back half of the year, we would continue to be proactive about that. Driving promotions for sure. We have a significant number of promotions planned intending to one, convert that digital energy into purchases, and whether through our DTC channels or through our traditional retail partners. We also have, you know, more traditional marketing promotions in place that will look at certain product lines that we wanna emphasize or work on, some efforts to bundle accessories to grills and drive average order value and drive basket size higher. There's a number of initiatives that we have underway, and I think our general approach is to be early to win and be on the front end so that in a tough market, we can take share. Megan, this is Bill. The one thing I would probably add, getting to your question about, you know, if POS or retail traffic doesn't pick up significantly. You know, the one thing just to mention is, you know, our unique global manufacturing footprint really allows us. We know it's a valuable competitive advantage for us. It allows us to flex to demand. Our inventory positions are strong and, you know, I mentioned the trade inventory positions are strong, but we also have the ability to flex up or flex down both within Europe, with the Poland facility and in the U.S. with our facility here in the northwest suburbs of Chicago. If we see that retail or demand pick up, we believe and we know we have this advantage because we can flex to it, and we're managing our temp labor in such a way that we can flex up, flex down at the manufacturing plants to fulfill demand. Does that help? Yeah, that's really helpful. Thank you so much. Thank you, Megan. The next question today comes from Chris Carey from Wells Fargo. Chris, please go ahead. Your line is now open. Hi, good morning. Morning, Chris. Good morning. I was wondering if you know, I appreciate that you know, the environment has certainly become more difficult and weather was you know, arguably historically. That do you have perhaps a little bit more perspective now that we're getting into a new grilling season just around any impact of the pull forward in demand from COVID? Was it more than perhaps what you were thinking? Second, I'm just curious how you feel about market shares in the quarter and whether you think that you held share or not going into this year. I have follow-up. Sure. Thanks, Chris. This is Chris, and appreciate the question. It is a puzzle for, you know, a couple of years now to figure out what 2020 and 2021 meant. The one thing I would say on demand this year, and I would point even to the Q2 performance, this is a consistent message that we've noted in the data and continues to be true today, is that the pandemic, while it did drive a lot of incremental sales, and I am a believer in the pull-forward dynamic for fiscal 2020, you know, if we go back to the start of the pandemic. I don't believe as much in pull forward in 2021, and what I would point to is the two-year stack. When you look at where sales are this year, even in Q2, you know, I think we mentioned we were 46% on a two-year stack basis versus 2020. If you look out on a pre-pandemic level, if you go back to 2019, we were up 35% in the quarter and 37% on a year-to-date basis. The way that I frame this in prior dialogues is we believe that the pandemic heightened consumer engagement in the category, and it established a new base of operations, if you will, for the category. That continues to be true in our sales today. While there were one-time purchases, particularly in 2020, and we would characterize those in many cases as people who had an old grill, and that was the impetus to update their product line. We haven't seen an enormous pull-forward dynamic, you know, particularly in 2021. I think the dynamics that are going on in 2022 are more around all of the macro pressures on consumers, the inflation pressure on the prices of gas and groceries, the pressure of the volatile stock market on things like 401(k) savings or just consumer confidence more broadly. Those factors to me are more fundamental to the drop in retail traffic and category-wide performance. I don't think that there's a huge pull-forward problem in 2022 versus 2021. The second thing you asked about is share, and I would say that even in the declining market, we have seen. Obviously, we have market shares in all different markets around the world. To make it the broadest possible statement, I would say our shares are consistent and steady where they are. We have not seen any share retraction. In some markets, we've seen share gains. In our emerging geographies, which is less of a market share gain and more of an absolute growth story, we've seen really strong results in those emerging geographies. Overall, I'm very confident in our business and our operational fundamentals. We have the right strategy, the innovation's working, the emerging geography elements are working, the marketing strategies are driving consumer engagement and growth. I feel good about our ability to continue to maintain or grow share in the category. Then the last thing I'd probably point to is we're not new to this. We have a 70-year history. In fact, Chris, Bill and I went back and looked at our history, and I really only have like good quality data back to 1980, but that's enough, right? Like, we went back and looked at, you know, a chart that goes 42 years deep, and we looked at all of the recession years along the way, in 2008, 2009, in 2001, in 1990, in 1983. In all of those environments, what where. We've delivered a 10% historical CAGR over the last 70 years or over this period back to 1980. Generally, although that curve is not always linear, in the years either during or right after these recessionary windows, Weber's business historically takes a substantial jump, and we tend to come out of these periods stronger. From a market share standpoint and from a consumer interest and consumer demand generation standpoint, we're very confident going forward in the runway we have in front of us. Thanks, Chris. That's helpful. You know, I guess I'm trying to dimensionalize this quarter and the full year. You know, typically, the March quarter is less reliant on foot traffic. As you noted, the June quarter is where the reorder activity happens. If I just take your commentary around pricing impact and gross margin, it seems like pricing was at least mid-teens in the quarter. You know, I guess I'm trying to dimensionalize the shortfall here, specifically in the Americas, where volume, it might be down 30% or something like that. Is your view that the supply chain headwinds, I think you noted $50 million you left on the table was really why you came in below on Q2, and that the back half is much more a function of just less confidence around reorder activity, and perhaps that's because retailer inventory is high, but you're thinking that the consumer activity is gonna be softer in the back half just because of macro headwinds? Is that a fair way to dimensionalize how you view the quarter in the back half, or is there more to it? Thanks. Yeah. Chris, this is Bill. I'll maybe take a first shot at it, and Chris can jump in. You actually nailed it. It was exactly, you know, kind of what we saw. You did call out the miss in the quarter. Again, it's primarily driven by the supply chain complexities and more so about To your point around the U.S. business with the Genesis production that was impacted by the complexity of getting component parts to make Genesis. Now that we've got those parts in-house, we're producing Genesis at record rates. You'll see that start to turn in Q3 as those grills get shipped out because we have firm orders against those. The other call that I would make just on the Americas business is that business is comping an extremely high tough comp last year. If you go back to Q2 last year, the Americas was up 59% last year versus Europe that was up 37%. That's part of the dynamic in the Americas and Europe. Look, the other point is, you know, as we look to our guidance, you know, we are generally seeing foot traffic and POS slightly stronger in Europe than what we're seeing in the US. We're still diving in to understand the dynamics there, but generally, in our guidance, we are outlooking, you know, the low end and the midpoint. The high end of our range, as Chris mentioned earlier, is really driven by POS assumptions. We have our gross margin outlook in line. We hit it in Q2, we're gonna hit it going forward. We have our SG&A and costs in line. It really just depends on the POS dynamics and where they play out. Does that answer the question? That's great. This is just a confirmation of, you know, roughly mid-teens pricing in Q2, and you noted that it should be ramping into the back half. Is it fair to think about high teens pricing going into fiscal Q3? Yeah, I think that's. I can. Let me hit a couple points. As we look at going forward, you know, we obviously had Q1 where we were down almost 20%, you know, versus prior year on gross margin. The second quarter improved significantly, almost 12 percentage points to only down 9%. Our outlook is, you know, by the time we get to Q4, we're gross margin favorable, year-over-year because of the pricing actions that we took. You know, you've got this lapping effect of pricing that in the first quarter was only 3.3% improvement to gross margin. Second quarter was double that to 7.7%. Then in the back half of the year, we expect that to continue to increase. The flip side, like I mentioned earlier, most of our inbound freight and commodity purchase goods inflation is kind of, you know, hitting the first half of the year, 75%. We start to see that normalize. Those two dynamics drive the gross margin improvement that we're still committed to. Thanks, Bill. Appreciate that. Thanks, Chris. Thank you. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. The next question today comes from Arpine Kocharyan from UBS Investment Bank. Please go ahead. Your line is now open. Hi, thank you for taking my question, and good morning. You know, prior guidance was looking, I think, at flat to down mid-single-digit units decline for the year. The new guidance range would imply, obviously, down double-digit for units. Just I'm trying to understand, given the cadence of pricing action, that you took starting from Q2 and going to Q3 in full effect, how much of that is offsetting, unit decline for the year? In other words, on full year basis, how much is that pricing helping sales guidance on a full year basis versus unit growth? I think, as we look at, you know, for the midpoint of our guidance, generally, Arpine, you know, you're right that the pricing is certainly offsetting it. We're projecting full year price increases, driving, you know, close to 12%-15% improvement in our net sales results. FX is the other component, which is about a 3% drag on our top line. The balance would be. Mm-hmm. You know, the impact of Unit growth of volume decline. Unit growth. That's right. You know, and as Chris mentioned, you know, we kind of modeled this conservatively, you know, because we wanted to as we were reading early season traffic in POS. The range is, you know, as we go to the low end of the range, we just factor that in, and then, you know, if we take what happened in early May, and you could project that out, I think Chris mentioned we did see some slight improvement in traffic patterns in most of our channels here in the U.S. You know, that would then lead us towards the higher end of the scenario, both on the pricing impact, because obviously as volume drives, you get a further pricing benefit, but it would also improve our volume impact year on year. Does that help hit the question? Yeah. That's super helpful. Thank you. Then just a quick follow-up on gross margin outlook for the year. I think previously it was closer to something like 37% margin, just based on what was implied on the gross margin line. I know you talked about longer term margin outlook for the business sort of being intact. As we look for the year, given what you're looking at in terms of freight cost stabilizing and raw material costs that you have locked in, how should we think about gross margin on a full year basis now versus prior guidance? Yeah. I would say versus prior guidance from a rate standpoint, we're right in line with our gross margin outlook. You know, we don't necessarily provide, you know, full year gross margin guidance down to the, you know, to the rate, but I will tell you from a year-on-year improvement standpoint, I'll just emphasize again that I went back and looked at what we provided during the last call, and our gross margin progression from a rate standpoint is right in line to slightly favorable to what we provided during the last call. Again, our pricing flow-through has been strong. Our costs are in line. I would say by the time we get to Q4, we're projecting to be up a full six percentage points year-on-year. Obviously, that's driven by, if you go back to last year, that's when we started to really, you know, significantly see the inbound freight, the impact of inbound freight variances hitting the P&L. We led into Q1 of this year, which was our lowest gross margin percentage, you know, honestly in history because of this dynamic where we took. If you go back to last year, we were taking in all those containers at inflated rates. We hadn't adjusted our standards, so our CapEx variances that hit the first quarter drove our first quarter gross margins down to 24.2%. We'll come out of Q4, you know, north of 37%, which historically has been actually our lowest gross margin quarter. You can probably do the math and figure out that that gross margin improvement's gonna continue going forward. No, that's helpful. Just a quick follow-up. Has the components and parts availability situation gotten a little bit better as you progress through the quarter, or it's about the same of what you were looking at at the beginning of the quarter? It's much better from where we landed at the end of the second quarter. You know, honestly, the last two weeks of Genesis production, 'cause if you go back to Q2, I'll emphasize that of that $50 million shift, $35 million-$40 million of it was in the U.S., driven entirely almost by component parts and supply availability to make the Genesis launch, the launch of our new Genesis grill. That's been corrected. We're hitting daily output targets, and in many cases, hitting weekly records of production on Genesis. You'll see that course correct in Q3. In Europe, the transit time increase was the other call of $15 million in the quarter, and we feel good about where those sit. I mentioned the Poland inventory positions earlier in the call as well, and we're seeing good output and throughput through that facility. I would say generally, we're feeling much better today from where we came out of the quarter. Thank you very much. That's helpful. Thank you. There were no additional questions waiting at this time, so I'd like to pass the conference over to Chris Scherzinger for closing remarks. Thank you. I wanna thank everyone for joining us today. Weber has a rich history and decades of operational experience that continue to light the way in this tough macro environment, but we're more confident than ever in the fundamentals of our business. We've seen this before, environments like this over the course of our history, and we've always come out strong. We're approaching the second half of the year with clear eyes and with prudence, and we continue to focus on the things we can control, driving top-line performance, prioritizing cost savings initiatives, taking pricing action where needed, and delivering the best possible grilling experience for our consumers around the world. That'll close our call today. Thank you very much. That concludes the Weber Inc. second quarter 2022 earnings conference call. Thank you for your participation. You may now disconnect your line.