Callaway Golf Company reported first-quarter results that topped expectations on strength in both Callaway clubs and TravisMathew while sharply raising its full-year outlook. CEO Chip Brewer said Callaway’s bullish outlook in part reflects resilient demand from golfers despite macroeconomic uncertainty.

The golf equipment- and apparel-maker now expects full-year revenue of $2.02 billion to $2.07 billion, up from previous guidance of $1.98 billion to $2.05 billion, or up approximately $28 million at the midpoint.

On an analyst call, Brewer said the increase reflects strong first-quarter results that saw overall sales increase 8 percent on a currency-neutral basis, but also that “the fact that up to this point, we have seen no real change in consumer activity despite bumpy macroeconomic conditions and unusually low consumer sentiment readings.”

He added, “This resilience in the golf consumer matches up with what we have seen historically as golfers are on average, both well off financially and passionate about the game.”

Brewer also said golf equipment sales have historically not been overly sensitive to mild economic changes or even mild recessions. Brewer added, “Additionally, we have a strong product line, which, of course, helps too.”

Adjusted EBITDA for the year is now expected in the range of $211 to $233 million, well above the prior guidance between $170 and $195 million.

The hike was largely due to the Supreme Court tariff ruling in late February. Callaway now expects its full year 2026 gross tariff expense to be approximately $25 million lower than previous guidance. However, the raise also reflects the margin flow-through from stronger-than-expected sales and an improved outlook for gross margins.

Brewer said that post Q1, Callaway is seeing “incremental commodity and petrochemical-based cost pressures” due to higher oil prices, but he was confident that the company’s progress in gross margin improvements, along with the reduced tariff forecast. “will allow us to more than offset these new pressures. The net of all this is we’re revising our full-year gross margin expectations from approximately flat to up year-over-year.”

Non-GAAP First-Quarter Results

In the first quarter, sales grew 9.2 percent year-over-year (y/y) to $687.5 million, topping guidance in the range of $635 to $665 million.  On an Adjusted non-GAAP basis, EBITDA grew 31.1 percent y/y to $163.7 million, well above guidance in the range of $110 to $125 million.

Brewer noted that Callaway exceeded guidance at the midpoint by about $38 million on the top line and $46 million on the bottom line.

“A portion of our Q1 revenue beat was timing, driven by better-than-expected supply chain performance. And a portion of the bottom-line beat was a combination of favorability in tariff expense and timing of expense spend,” said Brewer. “However, the majority of the beat on the top line was due to improved demand and the majority of the bottom-line beat was flow-through from the revenue beat, along with the clear progress in the margin and efficiency initiatives that we’ve been working on over the last year.”

Brewer highlighted that gross margins improved 260 basis points as select price increases and cost reductions offset “significant” incremental tariff expense. He said, “This gross margin improvement is a step in the right direction and a testament to the cost management and margin improvement projects that we’ve been focused on over the last year and that will continue to be a focus going forward.”

On a non-GAAP basis, earnings vaulted 95.8 percent to $111.8 million, or 56 cents a share, from $57.1 million, or 30 cents, a year ago.

On a reported basis, net earnings, including results from discontinued operations, were $93.1 million, or 47 cents a share, against $2.1 million, or 2 cents, a year ago. Discontinued operations include Topgolf and Jack Wolfskin. Callaway completed the sale of a 60 percent stake in Topgolf to Leonard Green & Partners at the start of the current year. Last May, Jack Wolfskin was sold to Anta Sports. Net income from continuing operations on a reported basis rose to $74.9 million, or 38 cents a share, from $63.4 million, or 33 cents, a year ago.

Segment and Regional Performance

Golf Equipment sales were up 9.5 percent y/y, or up 8.0 percent y/y on a currency-neutral basis, to $486.2 million. Golf equipment operating income improved 15.5 percent y/y to $117.6 million.

Apparel, Gear and Other segment sales were up 8.4 percent y/y to $201.3 million and advanced 7.9 percent y/y on a currency-neutral basis. Segment operating income climbed 46.8 percent y/y to $52.0 million.Brewer said the golf game and golf industry “both continue to be in healthy positions,” with Callaway benefiting.

In the U.S., Callaway estimated that the overall golf equipment market sell-through at key accounts was up low- to mid-single digits in Q1, rounds played were up 5 percent, and major OEM shipments were up approximately 2 percent, as reported by the National Golf Foundation.

In Asia, golf equipment market sell-through was said to be down slightly, with Japan down approximately 1 percent and Korea down approximately 10 percent. In the UK and Europe, Callaway estimated that trade partners sell-through was up in low-single digits, but rounds played were down due to unfavorable weather this year.

Brewer said his company’s brands are outperforming the marketplace

“Both in the U.S. and globally, we view this as a solid start to the year, and we believe consumer interest in the game and overall participation trends remain positive, just as they have been for several years now,” said Brewer. “Using this data as the backdrop, we appear to have grown revenue faster than the market in all major regions.”

He said Callaway holds the No. 2 market share position in both clubs and balls in the U.S. and strong positions across all major international markets. He also noted that Callaway ranks as the top brand for both new and female golfers, two of the industry’s highest growth segments.

The overall gains in the first quarter were driven by Golf Club sales, which jumped 11.9 percent, or 10.4 percent on a currency-neutral basis, to $380.6 million.

“Our new Quantum family of woods and irons has also been well received by both our trade partners and consumers,” said Brewer. “The Quantum Driver’s Tri-Force Face is an excellent example of our innovation capabilities, and the product performance has been validated by outside reviews, including MyGolfSpy recognizing the Quantum Max, Triple Diamond and Max D as the 3 longest drivers of 2026.”

Additionally, the Fairway Wood category “remains very strong globally as does our position in it.” Callaway returned to being the No. 1 fairway wood last month in Asia on the strength of the new Quantum range.

Golf Ball sales increased 1.6 percent y/y to $105.6 million, or 0.3 percent on a currency-neutral basis.

Brewer said volumes in balls were intentionally reduced to eliminate low-margin SKUs and improve inventory efficiency at retail, but demand remains strong. Brewer said, “Most importantly, consumer reaction to our new Chrome Tour lineup has been excellent, and it feels to me that we are continuing to build momentum in this franchise. Similarly, Supersoft continues to be a highly successful and important franchise for us.”

U.S. golf ball market share in March was reportedly up 350 basis points y/y and set a new record level of 23.9 percent at green grass shops. Brewer attributed the gains to investments in product and manufacturing capabilities, gains in green grass distribution, and differentiated go-to-market approaches, such as its proprietary Triple Track alignment technology as well as a “fun decorated offerings,” such as its Super Mom golf balls.

Brewer concluded on the golf ball business, “We believe our manufacturing efficiencies in golf ball are now also world-class, setting up improved profitability for this category. Overall, I’m optimistic 2026 will be another year of continued progress for our golf ball franchise.”

Apparel sales reached $102.7 million in the quarter, up 4.8 percent on a reported basis and 5.1 percent on a currency-neutral basis. Gear, accessories & other sales were $98.6 million, up 12.4 percent on a reported basis and 11.1 percent on a currency-neutral basis.

Brewer said all brands in the Apparel and Gear segment, including Callaway-branded apparel offerings, TravisMathew and Ogio, “started the year either consistent with or above expectations,” said Brewer.

TravisMathew’s performance stood out with a strong direct-to-consumer performance year-to-date, significantly outperforming the market overall based on third-party Earnest data.

Brewer added about TravisMathew, “Looking at their business overall, the consumer continues to react well to the new women’s offering, and we have regained ground in our important men’s category based on a strategic shift in our merchandising strategy, one that delivers much clearer and distinct product pillars and marketing messages, as well as exciting new products such as our Hero Hour Golf Shorts. We’re in the early innings of this men’s product merchandising strategy shift. But based on the consumer reaction thus far, I’m optimistic regarding its potential.”

Second-Quarter Outlook
For the second quarter, net sales are expected to be in the range of $585 million to $610 million and Adjusted EBITDA is seen in the range of $98 million to $108 million. With the guidance, the implied first half net sales is now up mid-single digits year-over-year at the midpoint, which is in line with Callaway’s goal to grow at or above the overall golf market.

Image courtesy Callaway Golf Company