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"You lose a lot more in golf than you win. So when you do win, you have to enjoy it. I'm going to go back home and enjoy it with my friends and enjoy it with my family and, yeah, I love being from Northern Ireland. I tell everyone how great it is. For me, it's the best place on earth. I'm obviously biased, but I love it back there and I love the people."

 

 

HINT: Look at the bottom of the page.

 

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It doesn’t seem many companies are having the start to the year they envisioned. As noted, Callaway Golf reported lower first quarter sales (-19%), yet a profit. The question is whether it can maintain that trajectory throughout the entire year on the bottom line and reverse it on the top. Its arch rival TaylorMade, via its parent company adidas, shared first quarter sales were off 9% on a currency neutral basis. The German owner company elected not to reveal how the bottom line fared in the quarter. Yesterday, Golf Galaxy reported its first quarter same store golf sales were down 11% from a year ago. While the sentiment may be somber, it doesn’t mean everyone is struggling to gain some traction in the early going.

The Acushnet Company, owner of Titleist and FootJoy, reported first quarter sales were $416.2 million, an increase of 1% from the first quarter of 2014. The company enjoyed an operating profit of $50.4 million and net income of $26 million during the first quarter. In the spirit of its not how much you make, rather what you keep, Acushnet’s bottom line grew by 46% from  a year ago despite a slight uptick in sales. The company proved its a case of managing from within given the market conditions and economic headwinds faced by all.

 

Earlier this month at the PLAYERS Championship, PGA TOUR Commissioner Tim Finchem went on the offensive over the current state of the game. “There's been some negative commentary about the game over the last couple of years. From our perspective, we see the game as stable and healthy in the United States,” Finchem proclaimed. It’s doubtful that sentiment is shared by the management or shareholders at Dicks Sporting Goods. Last year, Dick’s CEO, Ed Stack, touched off a firestorm when he declared, “The more concerning and unpredictable issue is the golf business. We anticipate softness, but instead we saw significant decline. With Golf Galaxy down 10.4% and Dick's Sporting Goods golf off by high single digit. Our overall golf business missed our first quarter 2014 sales plan by approximately $34 million.”

Turns out the start of 2015 isn’t looking much better for the golf retailer. Golf Galaxy sales decreased another 11.0%. Last month, Callaway Golf reported global sales down 19% for the first quarter. Its U.S revenues were down 9% from a year ago during this time period. Earlier this month, TaylorMade adidas Golf reported first quarter sales were off 9% on a currency neutral basis. Thus two of the larger equipment manufacturers, measured in terms of revenue, seem to validate what Stack first headsandalerted the industry to a year ago. Meanwhile, Steve Mona, CEO of the World Golf Foundation, continued to read from the psalm book at the PLAYERS, “I want to state that we view the overall state of the golf industry as stable, and we view its future as encouraging.”

On its fourth quarter conference call, back in March, Stack updated the investment community on the state of his golf business. “Golf showed a slight improvement from the spring of 2014 or down versus last year. Golf Galaxy was down 7.1% with Dick's golf business slightly better,” he reported. “Our golf inventory is very clear. Our inventory is down versus last year. Our golf inventory really could not be in much better shape and I would say that the vast majority of a brand their inventories are in great shape too, so the whole channel doesn’t have the same inventory issues this year that we did last year.”

So fiscal fourth quarter of 2014, Golf Galaxy was down 7.1%. Looking back at the third quarter of last year, Golf Galaxy comparisons were down 8.9% and Dick's golf business was down a similar level. 2014-second quarter, despite promotional business centered on Father’s Day, saw Golf Galaxy sales off 9.3%; while Dicks golf business was down somewhat less. “What was very encouraging is that two million people took up the game of golf in 2014 for the first time, and that's the highest level since 2002,” Mona recited from his Hymn book at the PLAYERS this month.

A year ago, Dicks reported Golf Galaxy first quarter sales were down 10.4% and the Dicks Sporting Goods golf business in its 600+ locations was down by high-single digits. Which brings us back to today; where first quarter 2015 sales at Golf Galaxy came in lower by yet another 11%! So looking back from the first quarter of 2013, Golf Galaxy sales in 78 stores are down nearly 22% in 24 months!!

Finchem loves to point to the First Tee and its exploits as a means of a somewhat savior to golf. “The First Tee started in '97. Over 10 million kids either in the school program or in the facility program have been involved since its inception. In the last four years, the amount of dollars raised by chapters locally has gone from $50 million a year to $70 million a year, so the popularity of the program in communities is growing. It's in 8,500 schools today with school districts lined up to get it in, on the school side. So that's a program that I think the sky's the limit in terms of its overall impact.”

However, back in the real world, the sporting goods retailer isn’t seeing golf as a growth platform for its business. Perhaps, it explains why it let go more than 500 PGA golf professionals last July and reduced its square footage devoted to the game within Dicks stores in 2014. “The best thing we can do as an organization, the best thing we can do in terms of linking arms with the entities that are represented up here, are to join forces to grow the game,” stated PGA of America CEO Pete Bevacqua.

“Golf is going to continue to be difficult,” Stack stated on his 2015 first quarter conference call. “There isn’t a lot of growth in it.” He added that Golf Galaxy represents a little more than 3% of its total annual sales for Dicks Sporting Goods, which were listed at $6.8 billion for the 52 weeks that ended January 31, 2015. “We think longer term golf is going to be an okay business, it is an important part of our business and we’re going to stay in the golf business. We see certain categories of golf accelerating, the golf apparel business, I think a fair amount of growth will come from there. I think the golf equipment business will be stabilized and that will kind of move up or down a little bit one year to the next, but we think that longer term will be a good solid profitable business for us.”

Time will tell which side of the story has it right when it comes to golf’s fate. However, when you don’t have to share any financial performances, it does tend to make the argument more opinion based.

 
 
 

PGA TOUR Superstore is hoping to give away a lot of TaylorMade drivers. The deal hinges on whether Dustin Johnson wins this year’s U.S. Open golf tournament. If he does, anyone who purchases a new 2015 TaylorMade driver leading up to the U.S. Open will get their driver for FREE. 

“Dustin is one of the best athletes on Tour and a top ranked player whose golf game suits the site of this year’s U.S. Open,” said Matt Corey Chief Marketing Officer of PGA TOUR Superstore. “This promotion at PGA TOUR Superstore is a great way to motivate golfers everywhere to root for Dustin to win his first major, the 2015 U.S. Open.”

The offer is up and running through June 17th and it applies to the 2015 R15 and AeroBurner drivers when purchased in-store. If Johnson wins the U.S. Open, consumers across the country who have made an in-store purchase or completed an in-store write-in entry will have the purchase price of their TaylorMade driver fully refunded by PGA TOUR Superstore.

“TaylorMade’s new drivers are better than ever and because golf purchases are often influenced by winning and performance on The PGA TOUR, we feel we are offering real value to the consumer,” added Dick Sullivan, President and CEO of PGA TOUR Superstore.

Golf fans may recall a similar club giveaway promotion five years ago when Callaway Golf and Phil Mickeson teamed up with Golfsmith for an “if you win promotion” which resulted in $1 million in golf clubs given away for FREE.

To learn more about the promotion stop by any PGATSS store or visit http://www.pgatoursuperstore.com/winwithdj.jsp. This promotion is available only in PGATSS stores. 

 

New Era Cap has brought forth its most technologically advanced caps ever produced. The Contour Tech ($39.99) represents the pinnacle of its product design, according to the company. It is the only cap featuring CoolSkin technology: a high performance fabric that can absorb heat from key areas and dissipate it to the atmosphere, reducing the wearer’s skin temperature, the company said. The Contour Stretch ($36.99) and Contour Adjust ($31.99) feature New Era’s exclusive, lightweight and breathable Diamond Era fabric. This unique diamond pattern uses the CoolEra moisture-management system to wick sweat away and SolarEra to reflect the sun’s rays. 

“The technology in this headwear represents the equivalent of moving from a persimmon driver to one of today’s titanium drivers; there simply is no comparison,” stated EJ Flammer, New Era Senior Marketing Manager, Golf.  “The proprietary technology and bonded seams featured in these caps will allow golfers to be more comfortable and look better round after round.”

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Another clue has arrived that offers some insight into how the golf economy is looking in the early going for 2015. First quarter sales at TaylorMade came in at 280 million euros versus 264 million euros in 2014. Foreign currency translation effects positively impacted TaylorMade sales in euro terms, the company reported. Its revenues declined 9% on a currency-neutral basis in the first quarter of 2015, it said. TaylorMade’s parent company, adidas, reported sales declines in metalwoods and the iron categories, which couldn’t offset a double-digit increase in golf apparel sales.

“At TaylorMade-adidas Golf, where both the market and our business are emerging from the challenges we faced in 2014, we have also seen strong response to out first major product launches in over a year,” wrote Herbert Hainer, adidas Group CEO to shareholders. “There is no doubt our strong product line up as well as a cleaner market environment puts us up for growth going forward. But here too, we have learned our lesson from the past. We will definitely not sacrifice the long term success of our TaylorMade-adidas Golf business for short term goals. Instead, we will very closely monitor the industry and only slowly increase the volumes we are bringing to market. So while our first quarter performance definitely reflects a sequential improvement, it also shows that every decision we make and every product we launch needs to be for the long term benefit of out business.”

In the first quarter of 2015, TaylorMade introduced the R15 driver, Aeroburner metalwoods along with adipower Boost golf shoes and Red hybrid under the Adams Golf brand. adidas is projecting that TaylorMade will see major product launches in core categories such as metalwoods and irons throughout the year. In addition, new product introductions in footwear should support growth in the golf division, according to its parent company.

 
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