Acushnet sales were up 3.0% to $201.6 million in the seasonally slow fourth quarter as revenues grew across all product lines. But the golf division of Fortune Brands, which includes the Titleist, FootJoy, Cobra, and Pinnacle brands, posted a $6.4 million operating loss for the period compared to a $2.1 million profit in the year-ago period. The company said that the “timing of new product launches, manufacturing variances due to the hurricane-related disruption in our supply of [serlin], and higher costs for R&D and patent defense initiatives” were all factors in the loss for the quarter.
Full year sales were up 4.4% to $1.27 billion from $1.21 billion in the previous year. Operating income was up 11.5% for the year to $171.5 million, compared to $53.8 million in 2004. Excluding charges, FO said operating income was up 7% for the year.
The company said golf ball share at on- and off-course golf shops exceeded 50% of sales in units for the year and achieved a 60% share when measured in dollars. The Acushnet brands grew faster internationally then they did at home, thanks in part to new company-owned distribution in Korea. They just established their own distribution in China, which is expected to help boost 2006 performance.
Responding to questions from analysts regarding a potential sale of the golf division, FO Chairman and CEO Norm Wesley said that they dont speculate on any kind of divestiture. “We like the golf business,” he said. “Weve performed exceptionally well, weve got a great team there and so we are absolutely committed to golf.”
For 2006, Acushnet sees operating income improving in the low- to mid-single-digit range.
