Subscribe
Font Size
Join our Mailing List
DailyPulse
Home NO ONE EVER SAID IT WOULD BE EASY:

The golf equipment business hasn’t been easy and 2013 won’t be remembered as its finest year either. Despite rounds played down in the US and we can only assume elsewhere, Callaway Golf was able to increase sales of its products. The economy hasn’t been much help either, yet consumers spent more on the Callaway brand in 2013 than in years past. The simple answer to this happening comes down to product.

“We grew our market shares in almost all key categories and markets,” said Chip Brewer, Callaway Golf’s CEO. “In the U.S. our 2013 hard good dollar market share was 15.1%, up 120 basis points year over year. In Japan it finished at 13.9%, up 300 basis points year over year, and making us the number one American brand in that market. In the U.K., our 2013 share was 14.6%, up 160 basis points year over year.” The proverbial proof is in the pudding as they say.

Callaway reported its metal woods business grew by $56 million or 28%, from 2012. The improvement was attributed primarily to the success of the X Hot line of woods as well as the successful second half product launches. Iron sales came in higher by $11 million, which was offset by lower sales in putters (down $3.8 million) and golf balls (off $7.4 million). According to the company the improvement in iron sales was driven by the X Hot irons, along with the second half launch of its new Mack Daddy line of wedges and Apex Irons. Odyssey increased its year-to-date U.S. market share by nearly two percentage points to 29.9%, despite posting lower sales, which Callaway’s CFO, Brad Holiday said was due to a decline in the overall category last year. Golf ball sales were lower due to the sale of the Top-Flite brand, which were in the comparative numbers previously recorded. Sales of Callaway-branded balls increased 10% compared to 2012, Holiday said. Most of the sales gains picked up in metal woods were hampered by lower accessory sales, which retreated by $47 million in 2013. Callaway attributed approximately $37 million in sales associated with the businesses that were sold or licensed in 2012 for the lower accessory sales last year. “Our 2014 sales will be adversely impacted by approximately $9 million as a result of our decision last year to license our apparel business in Europe,” said Holiday.

While 2013 has already faded in the rear view mirror, everyone is focused what is in store for 2014. “Market conditions at this point in the year are kind of hard to predict,” said Brewer. “There are not any great indicators out there at this point. We do expect that overall market conditions will support low to single digit industry growth and we do think macroeconomic trends and consumer confidence is in general moving in the right direction. We think weather overall should be slightly improved relative to the first half of last year. However, we know we're not very good at forecasting weather so we're reluctant to do so,” he continued.

“The industry is still recovering from 2009 downturn, but at the same time, it'd be naïve to think that the golf business would be any less competitive this year. So we think, it'll be a little better than last year where the industry overall contracted a little bit. But reluctant to get ahead of ourselves until we get more clear reads on the early selling season which will be still a few months away.”