Fortune Brands reported fourth quarter and full year results, pointing to solid results in the Acushnet Golf division that they said “outperformed the market once again,” but the numbers clearly indicate that the division was a drag on overall FO performance for a quarter that is always a heavy investment period for golf brands in general.
Sales for the division, which includes the Titleist, FootJoy, COBRA, and Pinnacle brands, rose just 1.8% in the period to $195.8 million, compared to $192.3 million in the year-ago quarter. Sales had increased roughly 13% in Q4 last year. Operating profit for the division fell 52.3% to just $2.1 million versus $4.4 million in Q4 last year.
Management said results were impacted by the “wind down of certain products in advance of new product launches.”
Golf club sales were said to be “off modestly” from a double-digit gain in the year ago quarter, due primarily to close outs and the year-over-year timing of new product launches.
The combined share for the Titleist and Pinnacle golf balls was reportedly up two full points to a record at on and off course U.S. golf shops, with total share now approaching 50%. Management said the strongest gains have been at on-course golf shops.
FootJoy’s success was said to be “broad and deep”, reflecting strong sales of footwear and outerwear that led to “excellent sales gains in the fourth quarter.” FootJoy posted double-digit growth for the year, excelling in all key markets, including double-digit growth in Europe and Asia. The brand’s golf shoe market share reportedly remains above 50% in the U.S., and exceeds 50% for the first time in Europe. Combined with Titleist, glove share is also above 50%.
Full year sales for the Acushnet Golf division increased 8.1% to $1.21 billion, compared to $1.12 billion in 2003. Full year operating income for the division was up 10.6% to $153.8 million, or 13.7% of the company total, versus $139.1 million, or 15.1% of the total company operating income for 2003.
Management emphasized that Acushnets share of retail inventories continues to run below its market share in key categories, such as Woods.
The long-term goal for Acushnet is to grow operating income before charges at a low- to mid-single-digit rate, a rate they see possible for 2005.
