Acushnet Holdings Corp., the parent of Titleist and Footjoy, reported net earnings rose 10.6 percent in the third quarter on a 6.3 percent revenue gain. The increases were led by double-digit growth in club sales with with a 6.3 percent increase in balls.  Revenue guidance for the year was reaffirmed and earnings guidance slightly raised.

“Acushnet delivered another strong quarter of performance, with healthy revenue and adjusted EBITDA gains versus last year. Our golf club segment posted double-digit growth in the quarter, driven by the successful launch of next-generation T-Series irons, and our golf ball segment grew 6 percent in the period,” said David Maher, Acushnet’s president and CEO. “Our performance reflects the strength of Acushnet’s diversified portfolio and commitment to providing the game’s dedicated golfer with best-in-class products and services.” 

Maher continued, “Considering our third-quarter results and expectations for the fourth quarter, we are reaffirming our full-year revenue outlook and narrowing our Adjusted EBITDA outlook toward the high end. This reflects continued strong demand for Acushnet’s products, underlying enthusiasm for the game of golf, and healthy fundamentals across the golf industry. Our outlook also reflects additional investments across our business as we look to build upon our momentum heading into 2024. I would like to thank my fellow associates for their great work throughout the year and their commitment to delivering long-term value for our shareholders.”

Summary of Third Quarter 2023 Financial Results
Consolidated net sales for the quarter increased 6.3 percent, or 6.0 percent on a constant currency basis, to $593.4 million, primarily driven by higher sales volumes in Titleist golf clubs and higher average selling prices in Titleist golf balls and FootJoy golf wear, mainly apparel, partially offset by lower sales volumes in Titleist golf gear.

On a geographic basis, sales in the U.S. grew 7.6 percent to $352.5 million. Higher net sales in the United States were largely driven by increases of 14.0 percent in Titleist golf clubs primarily driven by higher sales volumes of T-Series irons, 7.9 percent in Titleist golf balls primarily driven by higher average selling prices of Pro V1 and Pro V1x golf balls and 12.1 percent in FootJoy golf wear primarily driven by higher average selling prices in apparel and footwear. These increases were partially offset by a decrease of 20.2 percent in Titleist golf gear primarily as a result of lower sales volumes of headwear and golf bags due to strong sales volume in the third quarter of 2022 as supply chain and fulfillment constraints recovered from the first quarter of 2022. 

Net sales in regions outside the U.S. increased 4.5 percent, or 3.8 percent on a constant currency basis. In Japan and Rest of World, the increase in net sales was primarily due to higher sales volumes in Titleist golf clubs. In EMEA, the increase in net sales was primarily due to higher sales volumes of products that are not allocated to one of our four reportable segments and higher sales volumes in Titleist golf clubs. This increase in EMEA was partially offset by lower net sales in FootJoy golf wear and Titleist golf gear, mainly in footwear and golf bags, respectively. In Korea, the decrease in net sales was primarily due to lower sales volumes of Titleist golf gear, products that are not allocated to one of the company’s four reportable segments, and FootJoy golf wear, partially offset by net sales increases in Titleist golf clubs and Titleist golf balls.

Segment Specifics 

  • 6.3 percent increase in net sales (6.2 percent increase on a constant-currency basis) of Titleist golf balls to $192.6 million, primarily due to higher average selling prices of our Pro V1 and Pro V1x golf balls launched in the first quarter of 2023. 
  • 17.6 percent increase in net sales (17.9 percent increase on a constant-currency basis) of Titleist golf clubs to $181.0 million, largely due to higher sales volumes of our T-Series irons launched in the third quarter of 2023, TSR hybrids and Scotty Cameron Super Select putters, both of which were launched in the first quarter of 2023. This increase was partially offset by lower sales volumes of drivers, fairways and wedges.
  • 19.4 percent decrease in net sales (19.9 percent decrease on a constant-currency basis) of Titleist golf gear to $47.7 million, primarily driven by lower sales volumes in golf bags and headwear due to strong sales volume in the third quarter of 2022 as supply chain and fulfillment constraints recovered from the first quarter of 2022. 
  • 3.8 percent increase in net sales (3.4 percent increase on a constant-currency basis) in FootJoy golf wear to $136.7 million, primarily due to higher average selling prices in apparel.

Net income attributable to Acushnet Holdings Corp. increased 10.6 percent to $57.3 million, year-over-year, primarily as a result of an increase in income from operations and a decrease in income tax expense, partially offset by an increase in interest expense, net. 

Adjusted EBITDA was $98.8 million, up 14.2 percent year-over-year. Adjusted EBITDA margin was 16.6 percent for the third quarter versus 15.5 percent for the prior year period.

Summary of First Nine Months 2023 Financial Results
Consolidated net sales for the first nine months increased 8.0 percent, or 9.9 percent on a constant-currency basis, primarily driven by higher sales volumes in Titleist golf balls, Titleist golf clubs and Titleist golf gear. A decline in sales volume of products that are not allocated to one of the company’s four reportable segments also contributed to the change in net sales. 

On a geographic basis, net sales in the U.S. were higher driven by increases of 17.7 percent in Titleist golf balls, 19.8 percent in Titleist golf clubs, 9.0 percent in FootJoy golf wear, and 9.2 percent in Titleist golf gear. These increases were driven by higher sales volumes across all reportable segments and higher average selling prices in Titleist golf balls and FootJoy golf wear, mainly apparel and footwear. 

Net sales in regions outside the U.S. were down 0.4 percent, or up 3.6 percent on a constant-currency basis. Net sales increased in Rest of World and Japan, offset in part by a decrease in Korea and EMEA, on a constant-currency basis. The increase in Rest of World was due to sales increases across all reportable segments. In Japan, net sales increased across all reportable segments except FootJoy golf wear. In EMEA, the decrease was due to lower sales volumes in FootJoy golf wear, partially offset by increases in all other reportable segments. In Korea, the decrease was primarily due to lower sales volumes of products that are not allocated to one of its four reportable segments and lower sales volumes in FootJoy golf wear, partially offset by increases in all other reportable segments. 

Segment Specifics 

  • 13.9 percent increase in net sales (15.5 percent increase on a constant-currency basis) of Titleist golf balls primarily driven by higher sales volumes and higher average selling prices of Pro V1 and Pro V1x golf balls launched in the first quarter of 2023. 
  • 14.8 percent increase in net sales (16.8 percent increase on a constant-currency basis) of Titleist golf clubs largely due to higher sales volumes of our latest generation T-Series irons, TSR drivers, fairways and hybrids, and Scotty Cameron Super Select putters, partially offset by lower sales volumes of second model year wedges. 
  • 7.0 percent increase in net sales (9.0 percent increase on a constant-currency basis) of Titleist golf gear primarily driven by higher sales volumes and higher average selling prices across all product categories. 
  • 1.4 percent decrease in net sales (0.6 percent increase on a constant-currency basis) in FootJoy golf wear. The increase in constant currency was primarily due to a sales volume increase in apparel, largely offset by a sales volume decrease in footwear. 

Net income attributable to Acushnet Holdings Corp. increased 13.0 percent to $225.2 million, year-over-year, primarily as a result of an increase in income from operations, partially offset by an increase in interest expense, net. 

Adjusted EBITDA was $377.6 million, up 20.6 percent year-over-year. Adjusted EBITDA margin was 19.2 percent for the first nine months versus 17.2 percent for the prior year period. 

Senior Notes Offering
On October 3, 2023, Acushnet Company, a wholly-owned subsidiary of the company, completed the issuance and sale of $350.0 million in gross proceeds of the Issuer’s 7.375 percent senior unsecured notes due 2028 (“Notes”). The proceeds from the Notes offering were primarily used to repay borrowings under the company’s multi-currency revolving credit facility. 

Dividend and Share Repurchase
Acushnet’s Board of Directors today declared a quarterly cash dividend of $0.195 per share of common stock. The dividend will be payable on December 15, 2023, to shareholders of record on December 1, 2023. The number of shares outstanding as of October 27, 2023 was 65,377,739. 

During the quarter, the company repurchased 1,153,400 shares of common stock on the open market at an average price of $56.28 for an aggregate of $64.9 million. Between October 1, 2023 and October 27, 2023, the company purchased an additional 385,594 shares of its common stock on the open market for an aggregate of $20.2 million, bringing the cumulative total open market purchases since June 12, 2023, pursuant to the most recent share repurchase agreement with Magnus Holdings Co., Ltd., a wholly-owned subsidiary of Fila Holdings Corp. (“Magnus”), to $100.0 million. As a result, the company expects to purchase 1,824,994 shares of its common stock from Magnus for an aggregate of $100.0 million on November 3, 2023, in satisfaction of its previously disclosed obligations. 

2023 Outlook 
Based on its year-to-date performance and current projections for the fourth quarter of 2023, the company is reaffirming its full-year 2023 net sales guidance range of $2,350 to $2,400 million. On a constant-currency basis, consolidated net sales are expected to increase 5.0 percent to 7.2 percent. In addition, the company now expects full-year 2023 Adjusted EBITDA to be approximately $365 to $375 million, compared to $355 to $375 million. The company’s outlook assumes no additional changes from the impact of foreign currency.

Photo courtesy Titleist