In contrast to the upswing market that appears to be returning to profitability, Callaway anticipates second quarter earnings to increase slightly or remain flat on a per share basis, with estimates ranging from 10 cents to 15 cents per share as opposed to 10 cents per share in the prior year quarter.
In terms of sales, the company expects a relatively flat return as estimates range from $295 million to $305 million versus $302 million in Q2 2009.
Callaway anticipates a solid recovery from recent years, though it may be delayed due to varying conditions.
Citing difficulty in its ascribed market, Callaway President and CEO George Fellows claims that “increased economic and political instability in Asia and Europe, the tentative nature of consumer spending so far this year in the United States, and unfavorable weather conditions in many of the company's key markets this year, are all factors slowing the pace of the recovery.”
Fellows followed by saying, “The pace of the recovery is affected by the stabilization of the worldwide economies and the recovery of consumer discretionary spending on durable products.”
However, with high brand awareness, a growing apparel and accessories business, as well as an international expansion plan related to golf’s Olympic eligibility in the 2016 Rio de Janeiro games, Callaway anticipates a slow, yet profitable recovery. “As we discussed throughout the year, 2010 will be the first step for the golf industry and the company toward a full recovery from the recent global economic crisis,” commented Fellows.
Callaway’s president and CEO concluded by saying that, “While our full year results will show less improvement than we initially forecasted, we remain confident that we will return the company to profitability in 2010 and remain confident in our longer-term prospects as well.”
