With the decline in barbecue sales, King Weber loses the crown of the stock market

With the decline in barbecue sales, King Weber loses the crown of the stock market

(BFM Bourse) – From a rudimentary and static brick oven, Weber has transformed the barbecue into a formidable marketing tool, promoting an enjoyable lifestyle around a good meal with friends. If the pandemic had revived Rolls-Royce sales of grids, the craze 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.

Weber. Precisely the evocation of the brand resonates as an invitation to enjoy grilled meats under the sun. For over 70 years, the company founded by George Stephen has been delighting the taste buds of meat and other grilled food enthusiasts around the world.

In France, barbecue has become a hobby in its own right over the years, to the point that 63% of French homes have it, according to a BVA survey for the Weber barbecue brand. In the United States, the barbecue or barbecue is an institution and is an integral part of the country’s culture with the star banner. It is also across the Atlantic that Weber is born, the undisputed leader of the barbecue whose full name Weber-Stephen Products, refers to George Stephen, assembler of steel sheets in the Weber Brothers Metal Works plant. This father of twelve children, passionate about great family barbecues, was obsessed with developing the perfect cooking appliance, efficient in any weather and without danger.

Legend has it that it was from assembling large steel plates in hemispheres to produce nautical buoys for Lake Michigan (or observing a metal lighthouse, on a sailing trip, as desired) that he came up with the idea. of a round barbecue with a lid. The Original Kettle (or Weber Kettle) was born and George Stephen set out to travel the country to promote his invention. The success was quick because the feedback was unanimous: keeping the heat evenly inside the barbecue offers better cooking quality. Charcoal, gas or electric barbecues and now connected, the group subsequently developed wide ranges of household appliances as well as a range of accessories and consumables (which account for 26% of its income).

Barbecues that sell less well

Weber boasts an average annual revenue growth of 10% between 1980 and 2021. It was on the basis of this tantalizing story that the barbecue king showed up on Wall Street last year, with the ambition of raising nearly $ 800 million. dollars. However, the barbecue manufacturer was not successful at the height of its notoriety. Weber was forced to lower his claims to ensure a successful IPO. The group will only be able to raise $ 250 million, less than a third of what was initially hoped, while the list price has been set below the initial price range of between $ 15 and $ 17.

It is therefore at a price of $ 14 that Weber took its first steps on the stock exchange on August 6, 2021. The first quotations of the stock were in good condition with a share that jumped by 18%. Weber’s capitalization then reached $ 4.7 billion.

After a few months’ stock market honeymoon – Weber stock still peaked at $ 17 in October 2021 – the market’s interest in the king of barbecues waned in the quarters. The barbecues that made it famous no longer sell like hot cakes. This is evidenced by the latest quarterly update published by the group at the end of July. In the last quarter, Weber’s net sales were down 7% and its net loss was $ 51 million, compared to net profit for the period a year ago. The Palatine, Illinois-based company also suspended its quarterly dividend.

The culprit of this evaporation of sales is all found: the inflation that distracts consumers from its flagship barbecues, their budget is increasingly dedicated to essential daily products. In this inflationary environment, Weber expects a further decline in sales in the third quarter, prompting its CEO to resign.

A year after the IPO, the stock market balance of the king of the barbecue is therefore far from inflaming the rating. Weber shows a drop of more than 60% of its stock in one year, showing a market capitalization reduced to 2 billion dollars. Almost $ 3 billion went up in smoke in a short year …

Sabrina Sadgui – © 2022 BFM Borsa

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