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Home Daily Golf Briefs Daily Pulse for November 9, 2017

 

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Web Street Golf Daily Pulse
VOLUME 7, NUMBER 220                                                       
Thursday, November 9, 2017

ANY IDEA WHO SAID THIS? “I’m expecting to have a good year. I’d like to get on the team and go over there and win. That’s a big goal of mine, and if I play like I’ve been playing, I’ll make the team. I’ll play more tournaments if I have to.”

BRAIN TEASER: Two players celebrated their 100th career start in a major championship in 2017. Can you name them?

SOLID THIRD QUARTER RETURNS: Acushnet Holdings Corp. (NYSE: GOLF) reported its three and nine month’s financial results. Third quarter net sales were $347.3 million, up 2.3% and net income was $9.3 million, up $14.8 million, year over year. According to the company, the increase in sales was driven primarily by the launch of the Titleist 718 irons and 818 hybrids. Golf ball sales for the quarter were $115 million, a decrease of $$4.1 million from a year ago.  “New Pro V1 golf balls have posted sales and share gains through the first three quarters of the year,” said David Maher, Acushnet COO. “Sales of our performance models have declined as these have been most impacted by competitive promotional activity in what is the back half of their two year product lifecycles. We see this promotional activity largely as a byproduct of the retail correction as golf ball companies come to terms with the new inventory and retail square footage realities of the market.”

Club sales were $84.7 million, up $7.4 million. “The late September launch of the new 718 irons and 818 hybrids met our high expectations,” said Maher. “Early demand has been strong fueled by a calendar full of fitting and starting in early September, which was aided by good weather across most markets. Feedback on both 718 irons and 818 hybrids has been very positive. The addition of the new AP3 model has been especially well received across all regions, as initial interest in this player’s distance iron has been strong. Rounding up the Titleist golf club portfolio, our Vokey wedges and Scotty Cameron putter and both franchises have performed well and in line with our expectations.”

Titleist golf gear sales were $30.9 million, up $396,000, due to sales volume growth in travel gear category for the company. “Growth in the third quarter was driven primarily by success in travel gear, while our year-to-date increase comes from across the board sales gains in gloves, bags, headwear and travel. We continue to fortify our gear design capabilities and supply chain, while pursuing the highest levels of product performance and quality,” said Maher.

FootJoy sales were $101 million, an increase of $3.3 million, primarily due to higher average selling prices and a sales volume increase in its apparel category in the quarter. “Innovative new product has been the foundation of FootJoy’s golf footwear business in 2017. The third quarter launch of the new DNA Helix golf shoe has been very well received and this is in addition to the continued strength and momentum of our Pro/SL spike less shoe. Additional third quarter highlights include the successful introductions of LTS outerwear and FootJoy’s golf leisure for women fall collection,” Maher pointed out.

On a geographic basis, consolidated net sales in the United States increased by 4.6% in the quarter. “It is encouraging that the U.S. retail market is weathering its structural correction fairly well. The general consensus from our trade partners is that they are faring better now than they did in 2016 or 2015 as there are fewer competitive doors and a greater percentage of their sales is generated from inline products,” Maher stated. Net sales in regions outside the United States were down 0.1%, and up 1.1% on a constant currency basis, with Korea up 6.4% and Rest of World up 6.3%, offset by Japan down 6.9%.

"Acushnet delivered a solid third quarter with global growth driven by the United States and South Korea,” said Maher. “We are particularly pleased with the recent launch of the Titleist 818 hybrids and the 718 irons including the new AP3. Tour adoption was strong at introduction, the global rollout with our trade partners was well executed, and initial golfer response to these new golf clubs has been terrific. New Titleist DT TruSoft golf balls, and FootJoy's DNA Helix golf shoes were also launched successfully in the quarter. Looking forward, the Acushnet innovation engine is in high gear and we are excited about the many new product offerings coming from Titleist and FootJoy in 2018."

Consolidated net sales for the first nine months of 2017 were $1,208.9 million, a decrease of 2.7%. Net income improved by $35.2 million to $80.4 million, primarily as a result of lower interest expense incurred by the company and higher income from operations.

"We are encouraged to see that the global golf industry continues to structurally improve through the first nine months of 2017,” said Wally Uihlein, Acushnet President and CEO.  “While near term, US demand trends have been impacted as the focus shifted to important life priorities in areas hit by the recent hurricanes, it is good to see many areas are recovering well as a sense of normalcy returns. We are confident that our proven strategy, dedicated associates and valued trade partners will enable us to leverage a stronger industry and extend our success over the long term." The company is calling for consolidated net sales to be approximately $1,545 to 1,555 million in 2017.

A PRECIOUS ASSET: Time is a funny thing. When things are going bad, it feels as if its never going to change. However, its been said that time heels all wounds. Take Pat Perez for example, who has seen his world change dramatically over the past year. “I can't believe what's transpired in 12 months. I was 331 coming in here and I was just fighting to get my job back from my medical status, so after I won, that all changed. I would have never dreamed when I got to CIMB last year, that that 12 months was going to happen. I was just hoping, you know, not get hurt again and hopefully get my card back and that kind of stuff, and here I am, I won twice and now I got to 18 in the world. I just can't believe it,” he said in advance of the 2017 OHL Classic at Mayakoba. “I've told a thousand people, it's unbelievable.”

Perez, who was playing on a Major Medical Extension a year ago, made five birdies and one bogey en route to a 21-under-par 263, good for a two-stroke victory over 54-hole leader Gary Woodland at the 2016 OHL Classic at Mayakoba. What will the next 12 months have in store?

A NEW NAME: The PGA TOUR and Rapiscan Systems, Inc. have reached a three-year agreement making the security screening provider the title sponsor of the PGA TOUR Champions event played annually at Fallen Oak in Biloxi, Miss. An OSI Systems (NASDAQ: OSIS) company, Rapiscan Systems is said to be the world’s leading security screening provider. Rapiscan provided security screening services to the 2012 London Summer Olympic Games, the Glasgow 2014 Commonwealth Games in Scotland, and will be the provider for the Gold Coast 2018 Commonwealth Games in Australia.

“This tournament has been an exciting part of the Mississippi sports calendar since 2010, and we are elated to welcome Rapiscan Systems into our community as we look to expand the tournament footprint,” said MRGC Foundation Board of Directors Chairman, Frank Bertucci. “The Mississippi Gulf Coast benefits greatly from this event, and I know the passionate golf fans in the area will continue to support these tremendous legends of the game.”

WEB GEMS:

THE GOOD FIGHT: Jerry Kelly has always been a fighter on the golf course but now he finds himself engaged in a much more consequential challenge. Kelly and Madison-based Exact Sciences have joined forces with the PGA Tour Champions in an effort to defeat colon cancer, the second-leading cause of cancer deaths. Exact Sciences announced a three-year agreement to become the title sponsor for the Champions tour event in Tucson, Arizona, to be called the Cologuard Classic, named after the company’s non-invasive, at-home colon cancer screening test. READ MORE>>>

COMING TO AMERICA: In a big career move current European No. 1 Tommy Fleetwood will take-up his option of PGA Tour membership from the start of the New Year. Fleetwood, 26 earned enough prize-money from his 10 appearances in PGA Tour counting events in 2017, including second in the WGC – Mexico Championship and fourth at the U.S. Open to end the PGA year inside the top-125 on the money list. READ MORE>>>

ANSWERS: “I’m expecting to have a good year. I’d like to get on the team and go over there and win. That’s a big goal of mine, and if I play like I’ve been playing, I’ll make the team. I’ll play more tournaments if I have to.”--Phil Mickelson on his desire to play on another Ryder Cup team.

Phil Mickelson and Ernie Els celebrated their 100th career start in a major championship at the P.G.A. Championship in August.

THE INFORMATION CONTAINED IS BELIEVED TO BE RELIABLE, BUT IT IS NOT GUARANTEED. THE OPINION EXPRESSED IS THAT OF TERRY MCANDREW AND SHOULD NOT BE CONSIDERED A SOLICITATION TO BUY OR SELL SECURITIES IN ANY OF THE COMPANIES DISCUSSED WITHIN THIS NEWSLETTER. CONTENTS OF THIS NEWSLETTER MAY NOT BE REPRINTED OR REBROADCAST WITHOUT THE EXPRESSED WRITTEN CONSENT OF TMAC GOLF