New Callaway CEO William Baker, the long-time ELY board member who replaced Ron Drapeau in early August, wants to take a longer look at the business over the balance of the year and is looking for a little room to maneuver before providing any updated sales and earnings guidance in the near term.

The decision to suspend guidance comes on the heels of an announcement last week that the company no longer expects to reach its earlier full year 2004 earnings estimate of 15 cents to 25 cents per diluted share on sales between $975 million and $990 million for the year. They will not hit the previous Q3 estimates either, which called for a loss in the 37 cents to 42 cents per diluted share range on sales between $150 million and $160 million.

Baker said he needs to re-evaluate the “timing of new product launches and the status of products currently in the marketplace as part of a long term strategic plan.”

The company also said several unknowns, including “re-order status for the balance of the year and the timing of new product launches” that could reduce sales and earnings in 2004 to “levels significantly below those that were predicted earlier.”

“We intend to place our primary focus where it belongs — on doing what is best for our brands and our business long term,” said Mr. Baker. “For these reasons, we will schedule the timing of our new product launches to ensure that the Company is maximizing the sales potential of these new products and fostering strategic interest.” He said that some products that were previously considered for launch in 2004 will be delayed to 2005 to permit “a more powerful launch, with better developed marketing plans and stronger inventories.”

Baker said that the company’s recent price reductions have stimulated sales, but also said it was “premature” to predict the re-orders for the balance of the year. ELY is still shipping no-charge product to “net down” existing inventories, which have the effect of raising retail inventories. He is also cautious due to the potential impact of the recent hurricanes in the Southeast.


>>> Baker has been on the ELY board since 1994 and other senior management is still in place. Curious why trending analysis is slow to come…