Acushnet Holdings Corp., the parent of Titleist and FootJoy,  reported a profit against a loss in the fourth quarter. Sales rose 6.6 percent, led by a 9.5 percent gain in Titleist golf balls.

Fourth Quarter and Full Year 2017 Financial Results

  • Fourth quarter net sales of $351.4 million, up 6.6 percent year over year, or up 6.4 percent in constant currency
  • Full-year net sales of $1,560.3 million, down 0.8 percent year over year, or down 0.2 percent in constant currency
  • Fourth quarter net income attributable to Acushnet Holdings Corp. of $11.7 million, up $11.9 million year over year
  • Full-year net income attributable to Acushnet Holdings Corp. of $92.1 million, up $47.1 million year over year
  • Fourth quarter Adjusted EBITDA of $40.9 million, up 7.4 percent year over year
  • Full year Adjusted EBITDA of $223.4 million, down 2.2 percent year over year

“We are pleased with our results for the fourth quarter, in which we delivered solid growth across both the Titleist and FootJoy brands,” said David Maher, Acushnet’s president and chief executive officer. “Our industry leading Pro V1 franchise had an excellent quarter, and we had continued strong demand for our latest product introductions, including our new Titleist 718 irons and 818 hybrids and our new FootJoy LTS outerwear. Overall, we ended 2017 on a high note with strong brand momentum as we head into the new year.”

“We are optimistic about 2018 as the golf industry continues to become more structurally sound,” continued Maher. “We have also launched a number of exciting new products including Titleist Tour Soft and Velocity golf balls, Vokey Design SM7 wedges, Scotty Cameron Select putters and FootJoy Tour-S golf shoes. Our valued associates and trade partners have done a great job executing on our strategy and we believe their commitment to best serving the dedicated golfer will continue to drive our success this year and beyond.”

Consolidated net sales for the quarter increased by 6.6 percent, or by 6.4 percent on a constant currency basis, driven by increased sales in our FootJoy golf wear and Titleist golf ball segments.

On a geographic basis, consolidated net sales in the United States increased by 3.2 percent in the quarter. Net sales in regions outside the United States were up 9.5 percent, and up 9.2 percent on a constant currency basis. On a constant currency basis, all regions outside the United States posted year-on-year gains, with EMEA up 10.4 percent, Japan up 9.7 percent, Korea up 9.4 percent and the rest of the world up 7.2 percent.

Segment specifics:

  • 9.5 percent increase in net sales (8.7 percent increase on a constant currency basis) of Titleist golf balls driven by strong demand for the new Pro V1 and Pro V1x balls launched in the first quarter of 2017.
  • 1.5 percent decrease in net sales (1.0 percent decrease on a constant currency basis) of Titleist golf clubs, as product launches of 718 irons and 818 hybrids in September 2017 were offset by lower volumes in drivers and fairways, which were launched in the fourth quarter of 2016.
  • 4.4 percent increase in net sales (4.1 percent increase on a constant currency basis) of Titleist golf gear. This increase was driven primarily by higher average selling prices in bags.
  • 14.6 percent increase in net sales (14.6 percent increase on a constant currency basis) in FootJoy golf wear driven primarily by higher sales volumes and average selling prices in footwear combined with higher sales volumes in apparel.

Net income attributable to Acushnet improved by $11.9 million to $11.7 million, primarily as a result of higher income from operations, offset in part by higher income tax expense.

Adjusted EBITDA was $40.9 million, up 7.4 percent year over year. Adjusted EBITDA margin was 11.6 percent for the fourth quarter versus 11.6 percent for the prior year period.

Consolidated net sales for the full year 2017 decreased by 0.8 percent, or by 0.2 percent on a constant currency basis.

On a geographic basis, consolidated net sales in the United States decreased by 1.8 percent in the twelve month period. Net sales in the United States were impacted by a reduced store count as a result of the continued impact of retail channel disruptions that occurred in 2016, as well as unfavorable weather conditions which negatively impacted both rounds of play and golf club fitting and trial activities. Acushnet posted a 0.3 percent year-on-year increase in net sales in regions outside the United States, up 1.5 percent on a constant currency basis, with Korea up 11.3 percent and EMEA up 1.0 percent partially offset by Japan down 4.6 percent.

Segment specifics:

  • 0.4 percent decrease in net sales (0.1 percent decrease on a constant currency basis) of Titleist golf balls. This decrease primarily resulted from a sales volume decline of their performance golf ball models which were in their second year of the two-year product life cycle and was largely offset by a sales volume increase of their newly introduced Pro V1 and Pro V1x golf balls.
  • 7.7 percent decrease in net sales (6.9 percent decrease on a constant currency basis) of Titleist golf clubs. This decrease primarily resulted from lower sales volumes of drivers and fairways launched in 2016, coupled with wedges, which were in their second model year, partially offset by the launch of their new irons in September of 2017.
  • 4.9 percent increase in net sales (5.2 percent increase on a constant currency basis) of Titleist golf gear. This increase was primarily driven by higher average selling prices in all categories and higher sales volume growth in the travel category.
  • 1.0 percent increase in net sales (2.0 percent increase on a constant currency basis) in FootJoy golf wear, primarily driven by sales volume increases in apparel, partially offset by a sales volume decline in footwear.

Net income attributable to Acushnet improved by $47.1 million to $92.1 million, primarily as a result of lower interest expense and higher income from operations partially offset by higher income tax expense.

Adjusted EBITDA was $223.4 million, down 2.2 percent year over year. Adjusted EBITDA margin was 14.3 percent versus 14.5 percent for the prior year period.

Declares Quarterly Cash Dividend

Acushnet Holdings board of directors today declared a quarterly cash dividend in an amount of $0.13 per share of common stock. This represents an increase of 8.3 percent versus the prior quarterly dividend. The dividend will be payable on March 29, 2018, to stockholders of record on March 19, 2018. The number of shares outstanding as of December 31, 2017 was 74,479,319.

2018 Outlook

  • Consolidated net sales are expected to be approximately $1,590 to 1,620 million in 2018.
  • Consolidated net sales on a constant currency basis are expected to be in the range of up 1.3 percent to 3.2 percent in 2018.
  • Adjusted EBITDA is expected to be approximately $225 to 235 million in 2018.

Photo courtesy Titleist