It was an unusual 2017 for the equipment business. Rounds played were flat once again. Despite the static play of recreational players Nike Golf clubs and retailer Golfsmith departed the landscape. TaylorMade was up for sale through the year and no one stepped forward to acquire it. That could change soon, but its  unlikely that it helped sales for the company in 2017.

Callaway Golf reported its full year sales were $871 million, up $27 million or 3% from 2015. Fourth quarter sales were $164 million, an improvement of $11 million on 2015, which aided the full year results. Metal wood sales for the year were $201.8 million, down $20.4 million in 2015. Iron sales were $205.5 million, up $6.4 million versus 2015. Putter sales were $86.3 million, down $251,000, while golf ball sales were $152.3 million, up $9.1 million. The area that represents the greatest improvement for the company was accessories. Callaway reported full year sales of $186.6 million, an improvement of $32.5 million over 2015. Clearly, the overall top line sales growth for the business came from the category of accessories and gear.

Looking at a geographical breakdown, US sales were $447.5 million in 2016, an increase of .3% from 2015. European sales were $122.8 million, down $2.3 million or 1.8%, while Japan reported $170.7 million, an increase of $32.7 million or 23.7% over 2015. It would be a safe conclusion that Japanese accessories were Callaway’s saving grace in 2016 for the sake of producing top line growth.

Callaway reported income before income taxes of $58.4 million in 2016, compared to $20 million in 2015. The company sold a portion of its investment in Topgolf last year, which netted it $17.66 million inflated one-time 2016’s results. 


The company's fourth quarter and full year 2016 financial results prepared in accordance with generally accepted accounting principles in the United States ("GAAP") benefitted significantly from the non-cash reversal of a significant portion of the Company's deferred tax valuation allowance. Callaway did not recognize any Federal U.S. income tax in its financial statements. As a result of this reversal, it recognized a non-cash income tax benefit in the fourth quarter of 2016 of $157 million. Also it was required to retroactively recognize Federal U.S. income taxes for all of 2016.  Callaway’s income tax provision therefore increased by $16 million for 2016 for a net benefit of $141 million related to the reversal of the valuation allowance.