Weber CEO details 'huge competitive advantage' for grill brand with U.S. production

Weber CEO Chris Scherzinger joins Yahoo Finance Live to discuss Weber's $1.98 billion in net sales in 2021.

Video transcript

EMILY MCCORMICK: Adam, we're also closely watching the outdoor cooking products maker, Weber. The company delivered fiscal fourth quarter net sales of $350.2 million, which brought full year net sales up 30% to a record $1.98 billion. The company also recently opened a new European manufacturing and distribution center this fall. And for more, we're welcoming in Chris Scherzinger, CEO of Weber, along with Yahoo Finance reporter and anchor of our 9:00 to 11:00 AM show, Brian Sozzi. And Chris, thank you so much for joining us this afternoon. Tell us a little bit more about the key drivers of your latest quarter and what you're seeing as being the biggest opportunities for growth going forward.

CHRIS SCHERZINGER: Well, thanks so much for having me. It's been a treat today to be able to talk about our great fiscal 2021 year. As you mentioned, we grew our topline 30%. We delivered gross profit and adjusted EBITDA increases of 35% year over year, just setting records in all key financial metrics for the company in our 70-year history.

And so it's been a really fantastic accomplishment by our team of Weber employees around the world. Super happy with our innovation success this year. Innovation has been a big driver for us. We've grown our business substantially in emerging geographies. We have, as Brian knows well, we have a global footprint in 78 countries around the world and drove 60% growth year on year in our emerging geographies. So really great success internationally, which makes up more than half of our business.

And then, of course, our direct-to-consumer and e-commerce platform, which is something that we've really grown in the last couple of years, up 50% year on year. So, really, a great story of growth for us as a company. And we've also, as you mentioned, the Poland plant. That's been a big, huge step forward from our operational footprint, now having a US manufacturing facilities, which is really unique for Weber in the US market. Now we have the same thing in Europe, where we're the only major grill brand who makes our own grills, and we do it locally in kind. And so, a lot of great things going on at Weber.

BRIAN SOZZI: You're right, Chris. As you know, I was an avid reader of your prospectus. In fact, I read it, of course-- I read it again before this interview. Talk to us a little bit about that US manufacturing footprint because I still don't think a lot of investors realize that you are making the bulk of your products in the US very differentiated versus a lot of your rivals.

CHRIS SCHERZINGER: Thanks, Brian. Yeah, it's true. We are the only US-- major US brand that has a plant in the US. And so we manufacture right outside of Chicago here, where I'm talking to you from. We have a 600,000 square foot plant that makes the majority of our US grills. And we also just built a plant that's very similar in Zabrze, Poland. And I was there in Poland. Thankfully, travel opened up, and I got to Poland for the grand opening event last month in October.

The idea that you can make grills locally, our strategy is make where you sell. And that's really unique in the grilling space. And frankly, it's unique in much of the consumer durable space. So we're not relying on China or Vietnam to supply all of our goods. And in a world like we live in today, where there's so many supply chain challenges and getting ocean containers and navigating significant inflation from a ocean transport cost standpoint, having a local manufacturing facility gives us a really big competitive advantage in trying to insulate consumers from commodity increases or macro trends that might be unfavorable and give Weber consumers the best value on the marketplace. So it is a substantial lever for us in the business.

BRIAN SOZZI: And Chris, you popped the top on the earnings call on a new venture, something called 1952 Ventures. What's the focus there?

CHRIS SCHERZINGER: So this is a really exciting platform with, you know, I think we planted the seed, and you'll see the fruit come in the coming quarters. But 1952 Ventures, which is named for the year our company was founded, when Weber invented charcoal grilling and really took the leadership reins of a burgeoning new category for outdoor cooking, and it hasn't looked back since. And so we honor our past as an innovator. We feel like we're a company of innovators.

And 1952 Ventures gives us a new subsidiary platform that will go after the development arm for the company. So we want to keep the core Weber employees focused on driving organic growth and all the strategies that I mentioned before around product innovation and e-commerce and direct-to-consumer and geographic expansion and will pave that infrastructure. And then '52 Ventures allows us to pursue incremental opportunities. It could be partnerships, it could be new brands. It could be new business or new segments within the outdoor cooking space that we would bring into Weber and then be able to leverage the infrastructure that we've built as a core business. And it gives us the ability to think outside the box, the ability to be nimble and entrepreneurial, and go after big opportunities that break the mold a bit.

ADAM SHAPIRO: Chris, Adam Shapiro here. And full disclosure, I got a little Weber electric. We bought it a couple of years back. Love the thing because in New York City, you can't have open flame grills. The electric works great on the terrace.

CHRIS SCHERZINGER: That's great.

ADAM SHAPIRO: But that was only a couple hundred bucks, and you guys make, I mean, these high end, wonderful outdoor open flame grills that can be over $3,000. With the housing boom that's underway, we're going to have a million new homes built this year in the United States. And that's going to keep growing. How big is that for you? And are those higher end models what people are putting into those new homes and the homes they're buying?

CHRIS SCHERZINGER: We certainly are seeing a great trend toward our premium product lines. And we have a huge innovation coming that we're announcing officially in January, I believe, of a new line of Genesis grills that are going to knock everyone's socks off. And so if you're looking for a flagship to go in your backyard in your first home or your new home that you've traded up in during this hot housing market, Weber absolutely has a solution for you. That's been the bread and butter for Weber over so many years, over decades, almost 70 years now, in America, in the US.

And so the housing market is a positive factor for us. But I would say we're focused on multiple facets. Your example, Adam, of living in a smaller space or a condo or an apartment that has maybe a balcony space, some buildings, like mine, don't allow propane gas on the balcony. And so having an electric grill solution gives us an avenue into more households in the US and around the world that may not otherwise be able to have an outdoor cooking experience or have a real grill in their life.

And as you know, it makes a huge difference in your life if you have a grill, and you want to throw a Friday night party with family and friends. And so one of the key levers that's differentiating for us at Weber is, we play in all of the key product segments within outdoor cooking. And we do that in all of the key grilling markets around the world. And so wherever the consumer is, we have a grill that can meet you where you are. We'll meet you in your type of-- your life stage, big family, big grill, small family, small grill. We've got the whole gamut of opportunities from a fuel and size and a pricing standpoint, to your point.

And so we do believe there are great Weber solutions for people who might be in their first starter home. And they are maybe a new family starting out. And a Weber Spirit is the perfect size grill for them. But if you want the whole enchilada and you want Weber Connect Smart science and technology enabled inside your grill, we're happy to sell you a more expensive premium Weber grill and give you a life changing grilling experience with that as well.

EMILY MCCORMICK: All right, we'll have to leave it there for now. Chris Scherzinger, CEO of Weber, along with Yahoo Finance's own Brian Sozzi, thank you both so much for joining us.