Callaway Golf Company (NYSE:ELY) has announced its preliminary financial results for the third quarter of 2009 as follows:
“While the global economic environment has been very challenging for our business this year, there appear to be some positive signs indicating the beginning of a recovery,” commented George Fellows, President and CEO of Callaway Golf. “In spite of these macroeconomic challenges, we have been able to successfully increase our market share and manage those key areas of our business within our control.
“Our gross margin initiatives have continued to over deliver cost savings compared to our plan, partially offsetting the effects of a shift to lower price points by consumers, an increased promotional environment, as well as the negative impact of a stronger dollar. We have managed operating expenses very tightly this year, balancing significant reductions in spending with investments in growth initiatives like uPlay and new markets, which together have resulted in year to date spending being down 9% compared to last year. Improvements in our supply chain have helped to mitigate the impact of the dramatic drop in sales this year with inventory as a percent of trailing twelve month sales at the end of the quarter estimated at 21.2%, in line with our target.”
“As we begin to prepare for the upcoming year, we are encouraged by some positive trends of late,” continued Mr. Fellows. “These trends include:
We continue to realize the benefits of our preferred stock offering which has allowed us to operate our business in this difficult environment, remain in compliance with the financial covenants under our credit facility, and invest in growth initiatives without any long-term debt.”
“While we believe that retailers will continue to cautiously manage their inventory for the balance of the year, we believe the factors just mentioned, along with our stronger market share base, gross margin initiatives, and disciplined expense controls implemented this year, will position us for growth and improved gross margins as the global economy and normal demand for new products recovers and allow us to generate a meaningful turnaround and return to profitability next year,” concluded Mr. Fellows.
The Company will release actual third quarter financial results on 29 October. A conference call and webcast will also take place at that time.
Callaway Golf www.callawaygolf.com