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As GOLF Goes Public, Look At Competitor Callaway's Recent Figures

As GOLF Goes Public, Look At Competitor Callaway's Recent Figures
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Acushnet Holdings Corp. (NASDAQ: GOLF) began trading for the first time on a public exchange Friday. The company manufactures golf equipment and is the parent company of the Titleist and Pinnacle brands.

According to a Bloomberg report from August, fewer people are playing golf today — which is a developing trend. An estimated 24 million people enjoyed the game in 2015, down from a peak of more than 30 million in the early 2000s.

On the other hand, Nike Inc (NYSE: NKE)'s decision to exit the golf equipment market does leave a large void for companies like Acushnet to fill.

Acushnet's closest publicly traded direct competitor is Callaway Golf Co (NYSE: ELY).

Callaway: Soft Conditions In Recent Quarter

Callaway Golf CEO Chip Brewer said in the company's second-quarter earnings report in July that it is seeing "soft conditions" in the United States. This is evident from the sequential decline in revenue.

Here is a look at Callaway Golf's most recent earnings reports:

  • July 27, 2016: Q2 GAAP EPS $0.36. Does not compare to $0.30 est. Sales $246 million vs. $242.3 million est.
  • April 27, 2016: Q1 EPS $0.40 vs. $0.38 est. Sales $274 million vs. $280.9 million est.
  • February 4, 2016: Q4 EPS $(0.33) vs. $(0.36) est. Sales $153 million vs. $148.4 million est.
  • October 21, 2015: Q3 Loss $0.04 vs. est. loss $0.08. Sales $175.8 million vs. est. $169.74 million.

Bottom Line

Nike's exit from the golf equipment business does remove an industry giant from the game. Acushnet's S-1 filing does state that the company sees the global golf market as an $85 billion annual business.

Acushnet's core business is the manufacturing of golf balls. Anyone who has spent more than five minutes playing the game knows that golfers replace lost balls way more often than their equipment.

Another bright spot for the golf sector comes from the fact that Team USA was victorious over Team Europe in the Ryder Cup for the first time in eight years. Perhaps the much needed victory is what is needed for the millions of Americans to return to the green.

Posted-In: Acushnet Chip Brewer GolfNews Sports IPOs Trading Ideas General Best of Benzinga


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