Acushnet Co., the golf division of Fortune Brands, reported sales in the first quarter fell 12.5% to $347.0 million from $396.4 million in the year-ago period. Including one-time charges, operating earnings for the group, which includes the Titleist, Cobra and FootJoy brands, tumbled 82.5% to $9.0 million in Q1 from $51.5 million in the year-ago period. Excluding charges, earnings were off 32.6% to $34.7 million from $51.5 million in Q1 2008.
Recently, Acushnet announced that it would lay off 169 employees from its Titleist golf ball plants, citing “contraction in the global golf ball market.” Likewise, a report issued by the PGA and NGCOA indicates that rounds played per open days are down for the year.
Commenting on Acushnet, Bruce Carbonari, chairman and CEO of Fortune Brands, said, “New products, international sales growth in constant currency, and lower costs partly offset the impact of reduced consumer discretionary spending, lower corporate custom golf ball orders and adverse foreign exchange.”
Acushnet announced the layoff of 169 employees at its Titleist golf ball plants, according to a report by Massachusetts South Coast Today. According to the report, Acushnet spokesperson Mary Lou Bohm said the cuts will take place gradually and will affect about 11% of the local workforce of about 1,500.
Bohm told MSCT taht money for golf equipment is “discretionary income,” and spending is down sharply amidst the recession.
Once the company recovers, Bohms said, the company hopes to call back many of those being laid off.
“The golf ball industry is experiencing a more severe market contraction than our original forecasted decline for 2009,” said Jerry Bellis, president of Titleist Golf Balls. “The combination of golfers' reduced golf ball consumption and declines in corporate spending on golf have caused a decrease in global demand. To align our production with marketplace conditions, we have unfortunately needed to make adjustments in our golf ball plant staffing.”
In a release, Acushnet Co. said the reductions within its golf ball operations are a result of contraction in the global golf ball market, which is expected to decline in 2009. This includes a significant decline in demand for corporate and custom logo golf balls.
A representative told Sports Executive Weekly that this development had absolutely nothing to do with recent court rulings following a prolonged court battle between Callaway and Titleist.
Overall, Fortune Brands reported sales fell 20.3% to $1.44 billion from $1.81 billion a year ago, a decline management said reflected the impact of the “challenging economic environment and adverse foreign exchange.” Net income fell 93.0% to $8.9 million, or 5 cents a share, from $126.7 million in the year-ago period. Excluding charges, EPS was 30 cents a share in the 2009 first quarter.
