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Home Daily Golf Briefs Daily Pulse for August 3, 2018


Web Street Golf Daily Pulse
VOLUME 8, NUMBER 151                                                       
Friday, August 3, 2018

ANY IDEA WHO SAID THIS? “I'm fortunate to have a wife who is not really into golf that much. You know, two kids that are in an age where they're happy if they see my winning, but they don't really care too much about that. So after a couple of days, reality gets back and it's just normal life with the family and the kids.”

BRAIN TEASER: This player once coasted to an 11-stroke victory of the WGC Bridgestone Invitational. Can you name him?

NUMBERS PROVE IT: As many in golf wonder whether there is growth still available in the game, one company showed it’s out there. It may not be easy (is anything?) but it can be accomplished. The Acushnet Company reported second quarter net sales of $478.1 million, up 11.7% from a year ago and 9.0% when factoring out the influence of foreign currency fluctuations. It reported income from operations of $64.57 million for the quarter compared to $57.9 million last year. Second quarter net income was $39.9 million versus $33 million in 2017.

Titleist golf ball sales were up 11.1%, for the quarter, while clubs improved 26.3%. Golf gear was off 3.1% for the quarter and FootJoy sales were higher by 6.2%. Sales in the United States were up 12.7% in the second quarter, while EMEA was higher by 16.9%, Japan edged up 2.4%. Korean sales were up 10.7%.

Six-month sales are $919.9 million compared to $861.6 million in 2017. Acushnet said golf ball sales were up 2.8% (0.3% increase on a constant currency basis), primarily driven by a sales volume increase attributed to the new AVX balls and Titleist balls launched in the second quarter and first quarter, respectively. It largely offset a sales volume decline in Pro V1 and Pro V1x golf balls, which were in their second model year.

Titleist golf clubs grew by 20.2% (16.6% increase on a constant currency basis), due to higher sales volumes its iron series introduced in the third quarter of 2017 and wedges launched in the first quarter of 2018. “Early adoption by professionals eclipsed our high expectations with 17 players putting the TS (driver) in play for the very first time at the U.S. Open, and with TS representing 60% of all Titleist drivers in play at the Open championship,” said David Maher, Acushnet's President and Chief Executive Officer. “We expect adoption to steadily increase as we are able to fit more players into these exciting new products. You will hear more about the Titleist Speed project over the next several weeks as we ramp up our communication plans for the TS driver and fairway launch in late September.”

Acushnet reported to Wall Street it expects consolidated net sales for the year to be approximately $1.615 to 1.635 billion.

GOOD FOR THE SOLE! FootJoy’s second quarter sales were $119.5 million, an improvement of 6.2%. Six-month sales are $260.2 million, an increase of 2.1% from a year ago. As it resides within the Acushnet Company, many times its story can be lost due its larger sibling Titleist often garnering the majority of attention.

“Within footwear, the lead story is once again Pro SL which has had a very strong sophomore season,” said David Maher, Acushnet's President and Chief Executive Office. “2018 footwear sales had been impacted by our decision to exit some price points at the low end of the value segment, which while planned has negatively affected our year-to-date footwear comps. We believe this will be good for the brand over the long term and better position FJ to capture higher margin sales in more premium categories.

“Looking to the balance of 2018, we are excited to introduce the next generation of Pro SL, which has been updated for performance, comfort, and styling and now includes women's models which will complete this leading golf footwear franchise. Counting on our fall launches are the new SuperLites XP in women's leisure lines. And lastly, we recently began shipping are new 1857 line of premium footwear and apparel in the U.S. 1857 has been designed to meet the needs of golfers and trade partners looking for differentiated and classically styled products. And we are optimistic about this new opportunity to further showcase FootJoy's product creation engine.”

MAKING IT LOOK EASY: Callaway Golf reported record sales and earnings for the second quarter and first half of 2018 and increased its full year 2018 sales and earnings guidance. Second quarter net sales increased $91 million (30%) to $396 million, which delivered pre-tax income of $78 million and net income of $61 million. A year ago, Callaway reported second quarter sales of $305 million, pre-tax income of $48 million and net income of $31 million for the second quarter.

"The excellent start in Q1 has continued through Q2," said Chip Brewer, President and Chief Executive Officer of Callaway Golf Company. "Business around the globe remains strong with all major regions reporting significant sales growth and our new businesses, particularly TravisMathew, performing at or above plan.  On the product side, we have strength across the entire line, especially with the Rogue line of woods and irons as well as the new Chrome Soft golf balls.  We also continued to benefit from favorable market conditions. As a result, our EBITDA increased 62% during the second quarter compared to the prior year.  I continue to be extremely pleased with our performance and our long term outlook." 

Due to its stronger performance to date in 2018, Callaway has increased its full year 2018 sales guidance to $1.210 billion - $1.225 billion as compared to its prior guidance of $1.170 billion - $1.185 billion. The Company also increased its full year 2018 earnings per share guidance to $0.95 - $1.00 compared to prior guidance of $0.77 - $0.82.

Callaway said its metal woods business grew by 5.2% in the second quarter and 13.2% for six months. Iron sales were up 35% in the quarter and 46%, year-to-date. Golf balls jumped 35.1% in the quarter and 24.6% for six months. Putter sales were up by 12.4% in the quarter and 18.3% year-to-date. The category of gear and other was up 64.1% in the second quarter and 48.9% for the six months of 2018

The U.S market was up 38.7% for the quarter, 8% in Europe, 24.5% in Japan and 36.5% in the rest of Asia. On a six-month basis, American sales are up 35.2%, Europe 11.4%, Japan 36.6%, Rest of Asia by 35.9%.

These results are impressive. Make no mistake it isn’t as if last year’s numbers weren’t weak historically to begin with. The revenue growth from 2017 to 2018 is $186 million. Yet, its gear segment, which includes OGIO and Travis Mathews, which it acquired last year, only accounts for $61.8 million of it. The remainder has to be coming from various categories via its competitors.


IT’S ON! The much-anticipated one-on-one showdown between Tiger Woods and Phil Mickelson will take place in November at Shadow Creek Golf Course in Las Vegas, sources told ESPN's Mike Greenberg. The event will be either Friday (Nov. 23) or Saturday (Nov. 24) of Thanksgiving weekend. The purse is still being determined, but it has been reported previously as a $10 million payout. READ MORE>>>

ANSWERS: “I'm fortunate to have a wife who is not really into golf that much. You know, two kids that are in an age where they're happy if they see my winning, but they don't really care too much about that. So after a couple of days, reality gets back and it's just normal life with the family and the kids.”--Champion Golfer of the Year, Francesco Molinari on life after wining the Open Championship.

Tiger Woods owns the WGC Bridgestone Invitational record of 259 (21-under), which he posted in 2000. His 11-stroke win that year is also the largest winning margin in tournament history.