Callaway Golf Company Announces Third Quarter 2017 Financial Results including a 30% increase in net sales; Callaway increases full year net sales and earnings guidance.
In the third quarter of 2017, as compared to the same period in 2016, the Company’s net sales increased $56 million (30%) to $244 million. This increase was led by increases in all operating segments, namely Golf Clubs (+ 21%), Golf Balls (+20%), and Gear, Accessories and Other (+72%) as well as increases in each reporting region, namely the United States (+33%), Europe (+23%), Japan (+28%), Rest of Asia (+28%), and other countries (+23%).
The increase in the Golf Clubs and Golf Balls segments reflects the continued success of the Company’s EPIC line of products as well as the Chrome Soft golf ball franchise. The increase in Gear, Accessories and Other primarily reflects the successful acquisitions of the OGIO and TravisMathew brands which were completed in 2017.
As a result of this significant increase in sales, as well as a 110 basis point improvement in gross margins, the Company recognized a significant improvement in profitability during the third quarter of 2017.
Due to the seasonality of the Company’s business, the Company often reports a loss for the third quarter. However, in the third quarter of 2017, the Company reported an $11 million increase in operating income to $6 million as compared to an operating loss of ($5) million in the third quarter of 2016. Furthermore, the Company’s diluted earnings per share increased $0.09 to $0.03 for the third quarter of 2017 compared to a ($0.06) loss per share for the comparable period of 2016.
“Our third quarter results continue what has been a tremendous year for Callaway,” commented Chip Brewer, President and Chief Executive Officer of Callaway Golf Company. “On a year-to-date basis compared to the same period in 2016, our sales have increased $150 million (21%), our gross margins have increased 130 basis points, and our Adjusted EBITDA has increased 69%. Furthermore, our success over the last couple of years has allowed us to reinvest in our business, including investments in our golf ball plant, and in sales, marketing and research and development, and it has provided us with the wherewithal to acquire the OGIO and TravisMathew brands. We believe these investments and acquisitions will provide benefits for years to come.”
“Looking forward, we are pleased that our year-to-date performance has allowed us to increase our full year sales and earnings guidance,” continued Mr. Brewer. “We also continue to be cautiously optimistic about the golf industry overall, thanks to what we believe are improving fundamentals. Lastly, our brand momentum remains strong and we believe we are the #1 club and # 1 hard goods market share brand in every major region around the world.”
Callaway Golf Company creates products designed to make every golfer a better golfer. Callaway Golf Company manufactures and sells golf clubs and golf balls, and sells bags, accessories and apparel in the golf and lifestyle categories, under the Callaway Golf®, Odyssey®, OGIO and TravisMathewbrands worldwide.