A successful first quarter for Callaway Golf saw net sales reach $309 million, an increase of $35 million, or 13 percent. Non-GAAP pre-tax income (which excludes $4 million in non-recurring transaction and transition costs related to the OGIO acquisition) increased $3 million, or 8 percent, to $43 million.

The increase in net sales was attributable to Callaway’s 2017 product line, including a launch of the EPIC driver and fairway woods as well as increased golf ball sales. Net sales of gear and accessories increased significantly as a result of the company’s acquisition of OGIO in the first quarter of 2017 and a new apparel joint venture in Japan, which was formed in the third quarter of 2016. Net sales increased in all major regions and reflected market share gains in those regions.

On a GAAP basis, pre-tax income was $39 million for the first quarter. These results reflect the company’s continued brand momentum and continued execution of its strategy to grow market share in its core golf equipment business and in tangential areas.

The better-than-expected first quarter resulted in a sales guidance increase of $45 million – $50 million to $960 million – $980 million, compared to prior guidance of $910 million – $935 million.

Full year 2017 non-GAAP earnings per share guidance increased 10 cents per share to 31-37 cents, compared to prior guidance of 21-27 cents. The non-GAAP guidance excludes the non-recurring OGIO expenses, which are estimated to be $7 million.

The U.S. market for balls and clubs combined was down slightly in the quarter, with balls up slightly and clubs down slightly. Callaway is anticipating improved market conditions for Q2 and the balance of the year.

Looking forward, Callaway projects continued sales growth for the second quarter of 2017 due to higher sales and stronger gross margins.

“We estimate that full-year 2017 gross margin will increase to 45.2 percent, an improvement of 100 basis points compared to previous guidance, driven by continued favorable pricing and mix, as well as operational efficiencies,” said Senior Vice President Brian P. Lynch in a conference call.

Lynch said the company predicts net sales for the second quarter of 2017 are estimated to be in the range of $290 million to $300 million, an increase of $44 million to $54 million, or 18-22 percent net sales growth compared to the second quarter of 2016. The increase in net sales is anticipated from continued market share gains, incremental sales from the Japan joint venture and the OGIO acquisition and a higher proportion of reorder business from a retail perspective.

“Second quarter non-GAAP 2017 earnings per share on a fully-diluted basis are estimated to be in the range of 28 cents to 31 cents compared to 12 cents in the second quarter of 2016, which excludes the Topgolf gain and applies an assumed, estimated statutory rate of 38.5 percent,” Lynch stated. The second-quarter earnings per share estimates assume approximately 96 million shares, which is consistent with the second quarter of 2016.

Photo courtesy Callaway Golf