A Six Month Check In: The Golf Industry
A look at Acushnet, Callaway, and the overall industry.
Every Monday, I write a newsletter breaking down the business in golf. Welcome to the 61 new Perfect Putt members who have joined us since last Monday. Join 3,930 intelligent and curious golfers by subscribing below.
Hey Golfers —
The timing of writing this newsletter couldn’t be better — Acushnet and Callaway reported quarterly earnings last Thursday. On top of that, several six-month industry reports have been published in the previous couple of weeks.
The golf industry has had an incredible two-year run. A common question and concern — can golf hold the momentum and continue the impressive growth?
Short answer. Yes.
Let’s dive into the numbers.
As a quick refresher — Acushnet owns the below brands.
Titleist
FootJoy
Scotty Cameron
Vokey Design Wedges
Acushnet reported before the opening bell on Thursday — here are the highlights for the second quarter.
Net Sales — $658.6 million
2nd Quarter Sales — 5.4% growth
Titleist golf balls led the way from a revenue standpoint at $201.3 million — a .5% decline. The most significant growth segment was FootJoy — growing 8.1%.
A quick note. Titleist Golf Balls were down in the second quarter for a couple of reasons.
The delayed launch of golf balls in the second quarter.
Supply chain — Titleist facilities began to run at full capacity in the second quarter. This is the first time they have run at full capacity in a year.
The Acushnet Team was happy with Titleist Golf Ball results on the earnings call.
An interesting sentiment I took away from the earnings call? Acushnet was happy that rounds were down 6% due to the weather. If rounds had been higher — it would have caused significant stress to their supply chain.
From a region standpoint — The United States was up 11.4% for the second quarter. Japan sales were down 15.8% due to supply chain and fulfillment constraints.
The overall sentiment from Acushnet is global golf markets are healthy — and channel inventories are below the 2019 level.
Callaway reported earnings after the closing bell on Thursday.
Callaway owns the following brands.
Topgolf
Toptracer
Odyssey
TravisMathew
Jack Wolfskin
Ogio
Callaway had a monster quarter. Revenue checked in at $1.116 billion for the second quarter — a 22% increase over the 2021 second quarter. Callaway’s Adjusted EBITDA growth was equally as impressive.
Here are some key takeaways from Callaway.
Topgolf same venue sales were up 8% versus 2019
Callaway equipment was up 13% in the quarter
Europe and the U.K. were both down 10% in the quarter
Callaway breaks their revenue into three buckets — Topgolf continues to impress.
An impressive stat from the Callaway earnings call? TravisMathew.
TravisMathew is on track to do $300 million in revenue and $50 million in adjusted EBTIDA in 2022.
Callaway has a similar sentiment to Acushnet — market conditions are favorable, and they see the avid golf consumer as healthy and engaged.
Here is what is promising — both Acushnet and Callaway raised full-year expectations — a positive sign for the industry's back half of the year.
Moving to a few golf industry data points.
According to National Golf Foundation — golf rounds are down 5.7% yearly. But when you peel back the onion, it isn’t too bad, considering the poor weather early in the year. Due to the unfavorable weather — playable hours are down 9% on the year — golf rounds down 5.7% on the year is a win.
June was a positive sign for golf rounds — up 2.7% versus the previous year.
National Golf Foundation also released a U.S. Club and Ball Shipment report — it lines up well with the information provided by Acushnet and Callaway.
2022 has seen an 11% increase versus 2021 and a 49% increase versus 2019. Keep in mind — the report doesn’t consider inflation. The most recent reading of inflation was June — 9.1%. Nonetheless, still favorable for the golf industry.
Is there a gold standard metric to take the temperature of the golf industry?
Probably not just one — but many. Rounds Played are significant. Beginner Golfers are equally as important to sustaining the growth of the industry.
I believe that public companies like Acushnet and Callaway have intelligent people on their teams deciphering information, data, and market research that is not necessarily made available to the public. Both companies raising full-year guidance has my attention.
Golf is holding its own after two massive years — the industry is in a great position through the first six months of 2022.
Have yourself a great Monday. Talk to you next week!
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Callaway's acquisition history is superb! Interesting to see if the media attention from LIV/PGA will attract new golfers over the next couple of years.