Weber Grill accessories are offered for sale at a home improvement store on July 23, 2021 in Palatine, Illinois.
Scott Olson | Getty Images News | Getty Images
Weber shares fell 17% in morning trading on Monday after the grill maker abruptly said CEO Chris Scherzinger was leaving amid waning demand for its products in stores and online.
The Palatine, Ill.-based company also suspended its quarterly cash dividend and said it was committed to working with lending partners to stay in compliance with its credit facilities.
Weber has named chief technology officer Alan Matula its interim CEO, effective immediately, as he searches for a permanent replacement.
“We are taking decisive action to better position Weber to weather historic macroeconomic challenges, including inflationary and supply chain pressures that impact consumer confidence, spending patterns and margins,” said said Kelly Rainko, non-executive chair of Weber’s board.
The company also announced preliminary results for the three-month period ended June 30, pegging net sales at $525 million to $530 million. Weber said its performance was impacted by slowing retail traffic, rising inflation and other pressures on consumers. It was also affected by the continued devaluations of foreign currencies.
Weber said headwinds are expected to persist in its fiscal fourth quarter and withdrew its fiscal 2022 guidance due to market uncertainty.
The company said it was considering layoffs and other ways to cut spending, including tightening inventory. It said it would provide additional details when it releases its fiscal third quarter results on Aug. 15.
Weber, which makes smokers, barbecues and other accessories for outdoor cooking enthusiasts, went public last year as families spent more time cooking and entertaining at home during the pandemic. . More recently, however, demand for its kitchen products has cooled as consumers rethink their spending amid rising inflation and the looming possibility of a recession.
In the quarter ended March 31, Weber’s net sales fell 7% and its net loss was $51 million, compared to net income a year earlier.
Scherzinger joins a growing list of CEOs who have left retail companies in recent months, from Gap to Game Stop, as boards grow increasingly unhappy with slow performance and disruptions to the supply chain and other challenges persist.
Weber shares are down about 42% year-to-date, as of Friday’s market close.