Acushnet Holdings Corp., the parent of Titleist and FootJoy, reported net earnings declined 15.9 percent in the first quarter as sales decreased 1.8 percent due to weakness in Japan and Korea. U.S. sales increased 5.1 percent in the quarter.
The company maintained its guidance for the year.
“Acushnet is off to a good start in 2019”, said David Maher, Acushnet’s president and chief executive officer. “The first quarter in golf is typically filled with enthusiasm stemming from exciting new product introductions, and 2019 has been no exception. Our results were driven by nice growth in Titleist golf balls, led by the successful launch of new Pro V1 and Pro V1x, TS driver momentum and healthy gains in Titleist gear and FootJoy golf wear. And while our product launch cadence impacted the Titleist club segment in the quarter, this was expected given our disciplined two-year product life cycles. Our team and trade partners have done great work in setting the stage for what we believe will be a successful 2019.”
Maher continued, “As the season gets underway in the second quarter, Titleist and FootJoy products are effectively positioned and merchandised in golf shops, our fitting specialists and trade partners are prepared and excited for this busy stretch of the season, and we are encouraged by the enthusiasm we see from the game’s dedicated golfers. All of this affirms our belief that we are on track to achieve our goals for 2019.”
Consolidated net sales for the quarter decreased by 1.8 percent. On a constant currency basis, consolidated net sales were up 0.7 percent due to increased sales of Titleist golf balls driven by the introduction of new Pro V1 and Pro V1x models, increased sales of FootJoy golf wear driven by footwear and apparel categories and higher sales volumes of our TS drivers and TS fairways in Titleist golf clubs, which were offset by sales volume declines in wedges, putters and irons.
On a geographic basis, consolidated net sales in the United States increased by 5.1 percent in the quarter. Net sales in regions outside the United States were down 8.6 percent and down 3.5 percent on a constant currency basis. On a constant currency basis, Japan was down 20.1 percent, Korea was down 2.4 percent and EMEA was up 5.5 percent.
- 13.4 percent increase in net sales (16.0 percent increase on a constant currency basis) of Titleist golf balls primarily driven by higher sales volumes of Pro V1 and Pro V1x golf balls as a result of the latest generation introduced in the first quarter of 2019 and our AVX golf balls launched in the second quarter of 2018.
- 21.9 percent decrease in net sales (20.1 percent decrease on a constant currency basis) of Titleist golf clubs. This decrease primarily resulted from lower sales volumes of our wedges, Select model putters and Japan-specific VG3 irons which were all introduced in the first quarter of 2018 and our iron series which was in its second model year. The decrease was offset by higher sales volumes of our TS drivers and TS fairways which were launched in the third quarter of 2018. Titleist golf club sales were also negatively impacted by the timing of our spring putter launch; in odd numbered years, the new putters are generally launched in the first quarter, but this year, the new Phantom X family of putters was launched in the second
quarter of 2019.
- 1.9 percent increase in net sales (4.8 percent increase on a constant currency basis) of Titleist golf gear. This increase was primarily driven by higher sales volumes in our travel gear and golf bag categories.
- 0.2 percent increase in net sales (3.2 percent increase on a constant currency basis) in FootJoy golf wear primarily resulted from a sales volume increase in footwear and higher average selling prices in apparel.
Net income attributable to Acushnet decreased by $6.6 million to $34.9 million, down 15.9 percent year over year, primarily as a result of a decrease in income from operations, partially offset by a decrease in income tax expense.
Adjusted EBITDA was $64.2 million, down 16.7 percent year over year. Adjusted EBITDA margin was 14.8 percent for the first quarter versus 17.4 percent for the prior year period, primarily due to a decrease in income from operations.
Declares Quarterly Cash Dividend
Acushnet’s board of directors today declared a quarterly cash dividend in an amount of $0.14 per share of common stock. The dividend will be payable on June 14, 2019, to stockholders of record on May 31, 2019. The number of shares outstanding as of May 3, 2019 was 75,608,862.
- Consolidated net sales are expected to be approximately $1,655 to 1,685 million.
- Consolidated net sales on a constant currency basis are expected to be in the range of up 2.8 percent to 4.7 percent.
- Adjusted EBITDA is expected to be approximately $235 to 245 million.
Image courtesy Titleist