Callaway Golf Company said third quarter net sales slid 11% to $190.9 million from $213.5 million in the year-ago period. On a currency neutral basis, the company said net sales would have been $194 million, a decrease of 9% compared to the third quarter of 2008.
Gross profit fell 25.7% to $59.6 million compared to $80.1 million a year ago, yielding a gross margin of 31% compared to 38% a year ago.
The company reported a loss of 25 cents per share (on 63.2 million shares outstanding), compared to a loss of 12 cents per share (on 62.5 million shares outstanding) in 2008. The company said the loss per share for the third quarter of 2009 was adversely affected by one penny per share associated with the company’s gross margin initiatives and 4 cents per share dilution related to the company's preferred stock issuance.
The loss per share for the third quarter of 2008 included after-tax charges of 4 cents per share for the gross margin initiatives. Operating expenses were $85 million(45% of net sales) compared to $93 million (43% of net sales) for the same period in 2008.
The company estimates sales for the year will be down approximately 16% due to the challenging economic and market environment in addition to unfavorable foreign currency exchange rates. Gross margins for the year are now estimated to be approximately 37% compared to the Company’s prior estimate of 38% – 40%, due to higher than expected participation rates on second and third quarter sales promotions.