Golf, which experienced a surprising renaissance during the pandemic, is still on the rise.
Callaway Golf in Carlsbad released excellent financial results on Monday for its seasonally strong second quarter – not just with its $ 2 billion acquisition of trendy driving range operator Topgolf, but also with strong sales growth in its club, ball and golf club. and clothing store.
“The market is undoubtedly significantly larger than it was at the end of 2019,” said Chief Executive Chip Brewer in a conference call with Wall Street analysts. “I think it shows that it is sustainable. The snapshot we have seen – now that the markets are open again – is that the demand has stayed. It’s a sticky sport and game. As soon as you get involved with it, you don’t tend to leave it again very quickly. “
After years of stagnant participation, rounds of golf played in the US rose nearly 23 percent this year through June, according to industry research firm Golf Datatech.
In California, rounds played increased 41 percent, maintaining the momentum the sport enjoyed as a safe outdoor activity during the pandemic.
“It was both the new additions and the return of our core golfers,” said Brewer. “While I think it makes sense to expect a slowdown in the near future, we haven’t seen that happen yet.”
Callaway’s consolidated revenue increased 208 percent to $ 914 million from the year-ago quarter.
This jump is a bit misleading. The second quarter of last year excluded $ 325 million in revenue from the Topgolf acquisition, which was completed in early March.
Additionally, retail sales collapsed in the second quarter of 2020 as pandemic standstills set in – which makes this year’s numbers look great by comparison.
Still, Callaway golf equipment sales, as well as TravisMathew, Jack Wolfskin and other apparel brands, have rebounded well. Sales outside of Topgolf reached $ 588 million for the quarter, up from $ 297 million a year earlier.
Net income reached $ 92 million on generally accepted accounting principles, or 47 cents per share. That compares to a loss of $ 168 million for the same quarter a year ago.
Wall Street analysts had forecast an average GAAP profit of 1 cent per share on sales of $ 757 million.
Callaway warned that delivery bottlenecks could impact third-quarter sales by as much as $ 55 million. Higher freight costs, tight labor markets and inflation are also potential headwinds.
However, the company believes the demand is strong enough to overcome most of these hurdles. Retail inventory levels remain low, Brewer said.
Looking ahead, Callaway predicts full year revenue of $ 3.02 billion to $ 3.05 billion, ahead of analysts’ consensus estimate of $ 2.84 billion.
The company released results on Monday after markets closed. Shares rose 3 percent in expanded trading to $ 34.75 on the New York Stock Exchange.