Titleist Parent Sees 6.4 Percent Currency-Neutral Growth in Q2

Acushnet Holdings Corp., the parent of Titleist and Footjoy, reported second-quarter sales rose 4.7 percent on a reported basis and 6.4 percent in constant currency, driven by double-digit growth in golf balls and golf clubs. Net income increased 12.3 percent, while adjusted EBITDA gained 24.0 percent. Acushnet slightly lifted its guidance for the year.

“Acushnet continues to build momentum as our team delivered a 6.4 percent constant-currency sales increase in the quarter, led by double-digit gains in Titleist golf balls and golf clubs. We are pleased with the golfer response to our latest product launches, especially the new Pro V1 golf balls and TSR drivers. Recent major wins by Titleist and FootJoy brand ambassadors Wyndham Clark and Brian Harman at the U.S. Open and Open Championship help to validate our product performance stories while generating positive energy for our brands,” said David Maher, Acushnet’s president and CEO. “Underscoring our enthusiasm is strong participation and interest in golf, particularly in the U.S., where rounds of play were up over 5 percent year-to-date.”

“As we look ahead to the second half of the year, we are excited to launch new T-Series irons later this summer and a wide assortment of new products from FootJoy and KJUS for the Fall and Winter seasons,” continued Maher. “Our outlook reflects confidence in our team’s ability to develop and deliver high-performance products and services to dedicated golfers around the world and continued investments in Titleist golf balls and golf clubs, while tempered somewhat by elevated marketplace inventories in the footwear category. Our talented team of Acushnet associates remains focused on executing our long-term strategies and striving to deliver long-term value for our shareholders.”

Summary of Second Quarter 2023 Financial Results
Consolidated net sales for the quarter increased 4.7 percent, or 6.4 percent on a constant-currency basis, primarily driven by higher sales volumes in Titleist golf balls and Titleist golf clubs, partially offset by lower sales volumes in FootJoy golf wear, mainly footwear. A decline in sales volumes of non-allocated products to one of its four reportable segments also contributed to the change in net sales.

On a geographic basis, higher net sales in the U.S. were primarily driven by increases of 23.0 percent in Titleist golf balls and 25.9 percent in Titleist golf clubs due mainly to higher sales volumes of Pro V1 and Pro V1x golf balls and TSR drivers, fairways and hybrids and Scotty Cameron Super Select putters. This increase was partially offset by a decrease of 5.1 percent in FootJoy golf wear, primarily due to lower sales volumes in footwear, partially offset by higher sales volumes in apparel.

Net sales in regions outside the U.S. decreased 6.3 percent, or 2.5 percent, on a constant-currency basis. In Korea, net sales decreased primarily due to lower sales volumes of products not allocated to one of its four reportable segments and lower sales volumes in FootJoy golf wear, partially offset by sales volume increases in Titleist golf balls and Titleist golf clubs. 

In the EMEA, net sales decreased primarily due to lower sales volumes in FootJoy golf wear, partially offset by higher sales volumes in Titleist golf balls. In Japan, net sales decreased primarily due to lower sales volumes in Titleist golf clubs and FootJoy golf wear. In Rest of World, net sales increased across all reportable segments.

Segment specifics:

• 18.0 percent increase in net sales (19.8 percent increase on a constant-currency basis) of Titleist golf balls primarily due to higher sales volumes and higher average selling prices of Titleist’s Pro V1 and Pro V1x golf balls launched in the first quarter of 2023;
• 14.5 percent increase in net sales (16.3 percent increase on a constant-currency basis) of Titleist golf clubs primarily due to higher sales volumes of Titleist’s latest generation of TSR drivers, fairways and hybrids, and Scotty Cameron Super Select putters, partially offset by lower sales volumes of second model year irons and wedges;
• 1.2 percent increase in net sales (2.9 percent increase on a constant-currency basis) of Titleist golf gear mainly due to higher average selling prices across all product categories, partially offset by lower sales volumes in headwear; and
• 11.1 percent decrease in net sales (9.5 percent decrease on a constant currency basis) in FootJoy golf wear primarily due to lower sales volumes in footwear, partially offset by higher sales volumes in apparel.

Net income attributable to Acushnet Holdings Corp. increased 12.3 percent to $74.7 million year-over-year, primarily due to increased income from operations, partially offset by increases in interest and income tax expenses. Adjusted EBITDA was $132.1 million, up 24.0 percent year over year. Adjusted EBITDA margin was 19.2 percent for the second quarter versus 16.2 percent for the prior year period.

Summary of First Six Months 2023 Financial Results
Consolidated net sales for the first six months increased 8.8 percent, or 11.6 percent on a constant currency basis, primarily driven by higher sales volumes in Titleist golf balls, Titleist golf clubs and Titleist golf gear. A decline in the sales volume of non-allocated products to one of its four reportable segments also contributed to the change in net sales.

Net income attributable to Acushnet Holdings Corp. increased 13.8 percent to $167.9 million year-over-year, primarily due to increased income from operations, partially offset by increases in interest and income tax expenses. Adjusted EBITDA was $278.8 million, up 23.1 percent year over year. Adjusted EBITDA margin was 20.3 percent for the first six months versus 17.9 percent for the prior year period.

2023 Outlook
The company now expects full-year 2023 consolidated net sales to be approximately $2,350 to $2,400 million, compared to its previous guidance range of $2,325 to $2,375 million. Consolidated net sales are still expected to increase from 5.0 percent to 7.2 percent on a constant-currency basis. The company also expects full-year 2023 Adjusted EBITDA to be approximately $355 to $375 million, compared to guidance in the range of $345 to $365 million previously.

Photo courtesy Brian Harman, Titleist brand ambassador