Profitability And Market Share Exceed Company’s Expectations; And The Company Increases Full Year Earnings Guidance
Callaway Golf Company (NYSE: ELY) has announced its third quarter financial results and revised its full year financial outlook, including increasing its earnings guidance.
For the third quarter of 2015, despite significant headwinds from unfavourable changes in foreign currency exchange rates, the Company improved both its net sales and gross profit. Specifically, the Company achieved third quarter net sales growth of 4% over 2014.
On a constant currency basis, the Company grew net sales 12%. The Company’s gross margins improved by 540 basis points to 44.1%, resulting in a $13 million (19%) increase in gross profit for the third quarter of 2015 compared to the third quarter of 2014. On a constant currency basis, gross margins improved by 900 basis points and gross profit increased by $25 million (38%) over the same period.
Third quarter 2015 loss per share increased to ($0.04), compared to ($0.01) for the third quarter of 2014, as improved gross margins were offset by planned investments in the Company’s marketing and tour programs as well as non-recurring expenses related to the exchange transactions to retire the majority of the Company’s convertible debt, most of which were non-cash expenses.
The Company has continued to gain market share and drive improved operational efficiencies. As a result, the Company revised its full year net sales estimates to $835 – $840 million (as compared to its prior estimate of $830 – $840 million) and increased its earnings outlook to $0.12 – $0.15 earnings per share (as compared to its prior estimate of $0.01 – $0.06 earnings per share).
“Overall, we are very pleased with our performance in the third quarter and the progress we have made in 2015,” commented Chip Brewer, President and Chief Executive Officer of Callaway Golf Company. “Our new products continue to perform well in the marketplace. We have further strengthened our balance sheet, regained leadership in key product categories and markets, and our brand is sustaining its positive momentum. We also continue to be excited about our product pipeline as we move through 2015 and into 2016.”
“Additionally, from an overall market perspective we continue to be encouraged by what we believe are improved industry fundamentals,” continued Mr. Brewer. “This includes increased excitement around the world’s professional game as well as increased average selling prices and less promotional activity in key markets. Looking forward, we believe that our improved market shares and brand momentum will allow us to maximize current global industry conditions and capitalize on any future improvements in market conditions or foreign currency exchange rates.”
Callaway Golf Company www.callawaygolf.com/
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