Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Acushnet Holdings Corp (GOLF, Financial) reported a 1% year-over-year increase in net sales for the second quarter, driven by gains in Titleist golf balls.
- Titleist golf balls and golf clubs showed strong performance, with sales growing 7% and 5% respectively in the first half of the year.
- The company experienced double-digit growth in the US market, led by golf balls and FJ Apparel.
- Acushnet Holdings Corp (GOLF) has expanded urethane capacity and improved throughput efficiency in its production facilities.
- The company is well-positioned for the second half of the year with upcoming product launches, including new Titleist GT Metals and FJ Quantum golf shoes.
Negative Points
- Adjusted EBITDA for the second quarter was down $1.1 million compared to the previous year.
- The European market experienced a slow start due to poor weather, impacting sales, particularly in FootJoy footwear and apparel.
- Excess footwear and apparel inventories in Asia have negatively impacted results in those regions.
- Currency headwinds have affected net sales, with a $16 million impact in the first half of 2024.
- The premium apparel market in Korea remains soft, affecting sales in that segment.
Q & A Highlights
Q: Can you provide an update on the health of the golf industry and the initial excitement around your new product launches?
A: David Maher, President and CEO, noted that the US market is strong, with rounds up despite poor weather. Europe had a slow start due to weather, and Asia is working through apparel corrections. The new GT Metals launch has generated excitement, with early success on tours, indicating positive momentum for the back half of the year.
Q: What are your expectations for gross margin in the second half of the year?
A: Sean Sullivan, CFO, stated that the gross margin outlook for the second half is expected to be similar to the first half. The company is pleased with product mix and manufacturing efficiencies, and there are no significant changes anticipated.
Q: Have you seen any pushback on ball pricing or a trend of golfers trading down?
A: David Maher, President and CEO, reported no significant trade-down in ball purchases. Instead, there is continued interest in premium urethane offerings like Pro V1 and Pro V1x, indicating strong demand for high-end products.
Q: How does the new GT family of products compare to previous series, and what is the market reception?
A: David Maher, President and CEO, explained that the GT series represents a significant technological advancement with a combination of titanium and composite materials. Early testing and tour wins indicate strong player response, and the product is priced at $649, up from the previous $599.
Q: What is the outlook for FootJoy, and how long until inventory levels normalize globally?
A: David Maher, President and CEO, mentioned that the US market is stable, but global normalization, especially in Europe and Asia, may take a few more quarters. FootJoy is experiencing positive momentum in certain product lines, despite inventory challenges.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
