Titleist Golf Club Sales Strength Offsets Softer Ball Sales in Q3 at Acushnet Holdings

Acushnet Holdings Corp. reported sales grew 5 percent in the third quarter as strong double-digit gains at Titleist golf clubs offset a slight decline in Titleist golf balls. The company reiterated its guidance for the year.

“Acushnet delivered solid third quarter results, with constant currency net sales up 5 percent and adjusted EBITDA up nearly 9 percent. Our golf equipment businesses led the way in the quarter, driven by the successful launch of new Titleist GT drivers and fairway metals and healthy demand for Titleist golf balls,” said David Maher, Acushnet’s president and chief executive officer.

Maher continued, “Looking ahead, we are confident in reaffirming our full-year revenue outlook and narrowing our adjusted EBITDA outlook toward the high end of our guidance. This reflects confidence in our team’s ability to execute and the resilience of Acushnet’s target consumer, the game’s dedicated golfer. I would like to thank the entire Acushnet team for their ongoing commitment to providing golfers with great product and service experiences and delivering long-term value for our shareholders.”

Summary of Third Quarter 2024 Financial Results

Consolidated net sales for the quarter increased 4.6 percent, or 5.0 percent on a constant currency basis, primarily driven by higher sales volumes in Titleist golf clubs.

On a geographic basis, higher net sales in the United States were largely driven by increases of 18.3 percent in Titleist golf clubs and 12.1 percent in Titleist golf gear. The increase in Titleist golf clubs was primarily due to higher sales volumes of our newly introduced GT drivers and fairways, partially offset by lower sales volumes of our T-Series irons. The increase in Titleist golf gear was driven by increased sales volumes in travel and golf bags product categories. FootJoy golf wear net sales were flat as lower sales volumes in apparel were largely offset by higher average selling prices in footwear.

Net sales in regions outside the United States increased 2.2 percent, or 3.2 percent on a constant currency basis, due to higher net sales in Japan, Korea and Rest of World, partially offset by lower net sales in EMEA. In Japan, the increase was primarily due to higher net sales in Titleist golf clubs, partially offset by lower net sales in FootJoy golf wear, primarily footwear. In Korea, the increase was primarily due to higher net sales in Titleist golf clubs and Titleist golf gear, partially offset by lower net sales in Titleist golf balls. In Rest of World, the increase was primarily due to higher net sales of Titleist golf clubs, partially offset by lower net sales in FootJoy golf wear, primarily footwear. In EMEA, the decrease in net sales was primarily due to lower net sales of products that are not allocated to one of our four reportable segments, partially offset by higher net sales in Titleist golf balls and Titleist golf clubs.

Segment specifics:

• 1.0 percent decrease in net sales (0.8 percent on a constant currency basis) of Titleist golf balls to $190.6 million, primarily driven by lower sales volumes of our performance models.
• 18.2 percent increase in net sales (18.7 percent on a constant currency basis) of Titleist golf clubs to $213.9 million, largely due to higher sales volumes of our newly introduced GT drivers and fairways, launched in the third quarter of 2024, partially offset by lower sales volumes of our T-series irons.
• 8.2 percent increase in net sales (8.8 percent on a constant currency basis) of Titleist golf gear to $51.6 million, mainly driven by higher sales volumes in travel and golf bag product categories.
• 2.6 percent decrease in net sales (2.3 percent on a constant currency basis) in FootJoy golf wear to $133.1 million, primarily due to lower sales volumes, mainly in footwear and apparel, partially offset by higher average selling prices across all product categories.

Net income attributable to Acushnet Holdings Corp. decreased 1.9 percent to $56.2 million, year over year, primarily as a result of an increase in income from operations, more than offset by an increase in interest expense, net, and income tax expense.

Adjusted EBITDA was $107.4 million, up 8.7 percent year over year. Adjusted EBITDA margin was 17.3 percent for the third quarter versus 16.6 percent for the prior year period.

Consolidated net sales for the first nine months increased 2.2 percent, or 3.1 percent on a constant currency basis, primarily driven by higher sales volumes in Titleist golf clubs, Titleist golf balls and Titleist golf gear, partially offset by lower sales volumes in FootJoy golf wear. A decline in sales volumes of products that are not allocated to one of our four reportable segments also contributed to the change in net sales.

On a geographic basis, net sales in the United States were higher across all reportable segments with increases of 9.4 percent in Titleist golf clubs, 8.9 percent in Titleist golf gear, 7.4 percent in Titleist golf balls and 2.1 percent in FootJoy golf wear. These increases were primarily driven by higher sales volumes across Titleist golf clubs, Titleist golf balls and Titleist golf gear and higher average selling prices in FootJoy golf wear across all product categories, primarily in apparel.

Net sales in regions outside the United States were down 4.1 percent, or 1.9 percent on a constant currency basis primarily due to lower net sales in Korea, EMEA and Rest of World. In Korea, the decrease was primarily due to lower net sales of products that are not allocated to one of our four reportable segments, lower net sales in FootJoy golf wear, primarily apparel, and lower net sales in Titleist golf balls, partially offset by higher net sales in Titleist golf clubs. In EMEA, the decrease was primarily due to lower net sales in FootJoy golf wear, primarily footwear and apparel, as well as lower net sales of products that are not allocated to one of our four reportable segments, partially offset by increases in net sales in Titleist golf clubs. In Rest of World, the decrease was primarily due to lower net sales in FootJoy golf wear, primarily footwear and apparel, partially offset by higher net sales in Titleist golf clubs.

Segment specifics:

• 8 percent increase in net sales (4.7 percent on a constant currency basis) of Titleist golf balls, primarily driven by higher sales volumes of Pro V1 and Pro V1x, and our latest generation AVX, Tour Soft and TruFeel models launched in the first quarter of 2024.
• 3 percent increase in net sales (9.3 percent on a constant currency basis) of Titleist golf clubs, largely due to higher sales volumes of our SM10 wedges launched in the first quarter of 2024 and our newly introduced GT drivers and fairways, partially offset by lower sales volumes of hybrids and irons.
• 2 percent increase in net sales (3.2 percent on a constant currency basis) of Titleist golf gear driven by higher sales volumes in travel product categories and higher average selling prices across all product categories, partially offset by lower sales volumes in golf bags.
• 5 percent decrease in net sales (2.8 percent on a constant currency basis) in FootJoy golf wear, primarily due to lower sales volumes across all product categories, partially offset by higher average selling prices in apparel.

Net income attributable to Acushnet Holdings Corp. decreased 4.4 percent to $215.4 million, year over year, primarily as a result of an increase in interest expense, net.

Adjusted EBITDA was $392.1 million, up 3.8 percent year over year. Adjusted EBITDA margin was 19.5 percent for the first nine months versus 19.2 percent for the prior year period.

Cash Dividend and Share Repurchase
Acushnet’s Board of Directors today declared a quarterly cash dividend of $0.215 per share of common stock. The dividend will be payable on December 20, 2024 to shareholders of record on December 6, 2024. The number of shares outstanding as of November 1, 2024 was 60,802,949.

During the quarter, the company repurchased 1,080,560 shares of its common stock at an average price of $64.80 for an aggregate of $70.0 million. Included in this amount were 587,520 shares of common stock repurchased from Magnus Holdings Co., Ltd. for an aggregate of $37.5 million, in satisfaction of the company’s previously disclosed share repurchase obligation. 2024

Outlook
The company is reaffirming its full-year 2024 consolidated net sales guidance range of approximately $2,450 to $2,500 million. On a constant currency basis, consolidated net sales are expected to increase 3.2 percent to 5.3 percent. In addition, the company now expects full-year 2024 Adjusted EBITDA to be approximately $395 to $405 million, compared to $385 to $405 million.

Image courtesy Titleist