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TaylorMade-adidas Golf was able to succeed where its competition appeared to fail. The company posted sales gains in its fourth quarter of 2008 and made money too. Its two chief rivals, Callaway Golf and the Acushnet Company (Titleist, FootJoy and Cobra Golf) both reported lower revenues in the same period and a loss from operations.
TaylorMade said 2008 fourth quarter sales were € 195 million, an increase of € 3 million from the previous year. The final chapter of ’08 came in as the second largest quarter by revenue recognition in the year only trailing its second quarter which saw sales of € 226 million. Three out of the four quarters in 2008, TaylorMade reported higher revenue numbers. The irony is that its second quarter (its largest) was the only time frame it wasn’t able to exceed the prior year’s results. The company said its fourth quarter operating profit was € 24 million, on par with the previous year. But it appears there was some help getting to this level. In the fourth quarter the company acquired Ashworth. According to adidas’ annual report, the Ashworth deal positively impacted the operating profit of the TaylorMade-adidas Golf segment, due to a one-time gain of € 21 million. However, it was partially offset by restructuring costs and other one-time expenses of € 7 million. Still it implies a one time net gain of € 14 million.
Looking back over the full 12 months of 2008, TaylorMade enjoyed sales of € 812 million up from € 804 million in 2007. Its operating profit increased 20% to € 78 million in 2008 versus
€ 65 million in 2007. The bottom line was aided by another one-time gain of € 5 million on the sale of Maxfli, adidas reported.
TaylorMade’s revenues were dominated by its metal wood products, which represented 38% of its 2008 revenues or approximately € 308.6 million. According to adidas, TaylorMade is the clear market leader in metal woods (drivers, fairway woods and hybrids). The brand is particularly strong in the USA, it said, where it has forged a 30% share of the market and a large lead over its strongest competitor. It also said the Burner family of drivers accounted for approximately 15% of TaylorMade-adidas Golf sales in 2008.
Under the heading of hardware, which adidas defined as irons, putters, balls, bags, gloves and other accessories it generated 33% of its revenues or approximately € 268 million last year. Footwear was 9% of revenues or € 73 million and apparel was 20% of its business or € 162 million. According to its parent company, TaylorMade’s, current products (i.e. products launched in the last 18 months, which is the typical product life cycle in golf it said) represented 92% of total hardware sales versus 2007 when it was 75%.