While the bankruptcy and liquidation of Golfsmith impacted U.S. sales, Acushnet Holdings Corp. still managed to show a modest gain in sales in the fourth quarter while improving profitability.
Sales for the parent of Titleist and FootJoy reached $329.8 million, up 3 percent year over year, or 1.3 percent in currency-neutral basis.
The gains were driven by a 19.2 percent increase in net sales (15.5 percent increase on a constant currency basis) of Titleist golf clubs to $119.8 million. The gains were driven by strong demand for the new model 917 drivers and fairways launched in the quarter and continued growth in Vokey wedges and Scotty Cameron putters introduced in the first quarter of 2016; offset by lower sales of irons and hybrids that were launched in the fourth quarter of 2015.
Sales of FootJoy golf wear declined 9.5 percent (10.1 percent decrease on a constant currency basis) to $71.3 million, primarily as a result of the off-course U.S. retail channel disruption caused by the bankruptcy of Golfsmith.
Titleist golf ball sales were down 5.9 percent (6.2 percent decrease on a constant currency basis) to $98.6 million. The drop was primarily as a result of the off-course U.S. retail channel disruption and the fact that its Pro V1 and Pro V1x balls are in the second year of their two-year product cycle.
Titleist golf gear’s sales were down 11.8 percent to $21.4 million and off 13.2 percent on a currency-neutral basis.
Consolidated net sales in the U.S. decreased 3.6 percent, primarily as a result ofGolfsmith’s exit. Acushnet posted year-on-year gains in net sales in regions outside the U.S. of 9.6 percent — on a constant currency basis, such net sales would have increased 6.2 percent, with Japan up 14.3 percent, Korea up 10.5 percent and EMEA up 8.8 percent.
The net loss attributable to Acushnet, which went public last year, reached $0.2 million down from a loss of $20.4 million a year ago. The size of the change was primarily due to the recognition of a loss in the fourth quarter of 2015 of $13.8 million on the fair value measurement of the common stock warrants and lower interest expense in the fourth quarter of 2016.
Adjusted EBITDA reached $38.1 million, up 28.9 percent year over year as a result of higher income from operations.
Full-year net sales reached $1.57 billion, up 4.6 percent year over year, or 4.5 percent in currency-neutral basis. On a currency-neutral basis, a 3.7 percent decrease in Titleist golf ball sales was offset by a gains of 9.8 percent in Titleist golf clubs, 3.6 percent in FootJoy golf wear and 5.5 percent in Titleist golf gear.
Net income was $45 million in 2016 against a $1 million loss a year ago. Adjusted EBITDA reached $228.4 million, up 6.4 percent year over year
“We are pleased with how our team delivered solid revenue and adjusted EBITDA growth in a year highlighted by industry right-sizing. We are also encouraged by indications that the industry long-term metrics appear to be stabilizing,” said Wally Uihlein, Acushnet president and CEO. “Looking forward, we feel very good about our market position and opportunity for continued success.”
David Maher, Acushnet COO, added, “Our businesses continued to deliver solid performance over the course of 2016, driven in part by our focus on accelerating growth and share gains outside of the United States. Globally, we saw annual growth in the key business segments of golf clubs, golf wear and golf gear capped by the successful fourth quarter introduction of the 917 drivers and fairways and the strong momentum of the new FootJoy PRO/SL shoe. Entering a new golf ball cycle, we launched the new Pro V1 and Pro V1x in January of 2017 and we are very pleased with the enthusiastic golfer reception and broad tour adoption worldwide.”
For the current year, consolidated net sales are expected to be in the range of $1.565 to $1.595 billion. On a currency-neutral basis, sales are projected to increase by 1.8 percent to 3.7 percent in 2017. Adjusted EBITDA is being targeted in the range of the range of $220 to $230 million in 2017.
Photo courtesy Titleist
