Acushnet Holdings Corp., the parent of Titleist, reported earnings more than doubled in the third quarter as sales grew 15.1 percent.

“I am pleased to report that the positive momentum we saw in June and July for the game of golf and Acushnet products continued throughout the third quarter. Our team remained focused on meeting and exceeding the needs of our trade partners and golfers around the world, all while operating under new safety and social distancing protocols. Our strong third-quarter results reflect this focus and commitment,” stated David Maher, president and CEO, Acushnet.

Maher continued, “An important part of golf’s story in 2020 has been an incredible effort and leadership we have seen from the game’s caretakers – PGA professionals and course operators who have done great work to position the sport as a safe, welcoming and fun recreational activity. Every golfer has benefited in some way from their hard work and commitment to the game.

“During these unprecedented times, we remain committed to providing golfers with innovative and exciting new products to help them play their best golf. We launched our new Titleist Tour Speed golf ball in August, our Titleist TSi drivers and fairway metals are launching next week and our FootJoy team is set to introduce all-new Stratos and Premiere footwear lines over the next few months.

“Our results reflect the strength of Acushnet’s products, a company-wide commitment to customer service, and our team’s ability to adapt and leverage our global supply chain. I am proud of the passion, creativity and sense of purpose that our associates have demonstrated throughout 2020.”

Consolidated net sales for the quarter increased by 15.7 percent, or 15.1 percent on a constant-currency basis, due to increased sales in Titleist golf balls, FootJoy golf wear and Titleist golf gear of $48.5 million, $12.5 million and $9.4 million, respectively, primarily driven by sales volume increases as a result of a significant increase in rounds of play and related demand for golf-related products. This increase was partially offset by a decrease of $6.6 million in Titleist golf clubs primarily due to lower average selling prices and sales volumes of its metals, lower sales volumes of hybrids and irons, partially offset by higher sales volumes of its SM8 wedges.

On a geographic basis, net sales in the U.S. increased 25.8 percent in the quarter due to an increase of $39.2 million in Titleist golf balls, an increase of $7.5 million in Titleist golf gear, an increase of $7.1 million in FootJoy golf wear, and an increase of $1.9 million in Titleist golf clubs — all driven by a significant increase in rounds of play and related demand for golf-related products.

Net sales in regions outside the U.S. were up 5.0 percent and up 3.8 percent on a constant-currency basis. In EMEA, the increase in net sales was driven by increased sales across all segments. In Korea, the increase in net sales was primarily driven by increased sales in FootJoy golf wear, Titleist golf gear and Titleist golf balls.

In the Rest of the World, the increase in net sales was primarily driven by increased sales of Titleist golf balls and Titleist golf clubs. Net sales decreased in Japan, primarily due to lower sales of Titleist golf clubs.

Segment specifics:

  • 40.7 percent increase in net sales (40.1 percent increase on a constant-currency basis) of Titleist golf balls driven by higher sales volumes across all models attributed to a significant increase in rounds of play and related demand for golf-related products;
  • 4.7 percent decrease in net sales (5.2 percent decrease on a constant-currency basis) of Titleist golf clubs primarily due to lower sales of metals as a result of lower average selling prices and sales volume of its TS metals, which were in their second model year, and its decision to delay the launch of its new TSi metals, lower sales volumes of hybrids and irons, partially offset by higher sales volumes of its SM8 wedges introduced in the first quarter of 2020;
  • 28.0 percent increase in net sales (27.2 percent increase on a constant-currency basis) of Titleist golf gear primarily driven by sales volume increases in its golf bags, golf gloves and headwear product categories.
  • 13.1 percent increase in net sales (12.2 percent increase on a constant-currency basis) in FootJoy golf wear primarily driven by sales volume increases in its golf gloves and footwear product categories.

Net income attributable to Acushnet Holdings Corp. increased by $33.4 million to $63.2 million, up 112.1 percent year-over-year, primarily as a result of an increase in income from operations, partially offset by an increase in income tax expense.

Adjusted EBITDA was $99.2 million, up 77.8 percent year-over-year. Adjusted EBITDA margin was 20.5 percent for the third quarter versus 13.4 percent for the prior-year period.

Impact From COVID-19
Through the end of September 2020, Acushnet’s business was significantly impacted by the pandemic.

The negative impact was primarily experienced in the first and second quarters when its manufacturing and distribution operations were shut down and most on-course retail pro shops and off-course retail partner locations were closed for varying lengths of time due to government-mandated shutdowns in the U.S. and Europe.

By the end of June 2020, its manufacturing and distribution operations and substantially all of the golf courses, on-course retail pro shops and off-course retail partner locations in the U.S. and Europe had re-opened. Rounds of play have been strong since golf courses have reopened, which resulted in increased demand for Acushnet products during June 2020 and even greater demand for Acushnet products through the third quarter of 2020 in the U.S. and Europe.

Rounds of play, and demand for golf products in Korea, have remained strong through the third quarter of 2020; however, Japan continued to be negatively impacted by COVID-19 with decreased rounds of play and lower demand for golf-related products.

At the beginning of the third quarter of 2020, Acushnet amended its credit agreement to, among other things, provide debt covenant relief for each of the fiscal quarters ending between September 30, 2020 and September 30, 2021. As of September 30, 2020, Acushnet had approximately $110.5 million of unrestricted cash and $358.7 million of availability under its revolving credit facility.

The impact from COVID-19 continues to evolve and remains highly uncertain — including the potential for a significant increase in the spread of the virus, additional government-related shutdowns and a significant decrease in the current level of rounds of play and demand for golf-related products.

2020 Outlook
Given the high degree of uncertainty from COVID-19, the company has withdrawn all previously issued fiscal 2020 guidance, and the company is not providing further guidance at this time.

Photo courtesy Titleist/Titleist Tour Speed Golf Balls