GOLF - Earnings call transcript Q2 2018

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Operator

Good morning. My name is Jack, and I will be your conference operator today. At this time, I would like to welcome everyone to the Acushnet Holding's Second Quarter 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator President Relations, Vice you may conference. of Takazawa, you Investor begin Tony

Tony Takazawa

morning, and Acushnet on the of business welcome discuss you. David and Acushnet's and Thank Good discuss David CEO, to geographies. in we joined results our Maher. across the the President industry, and morning, provide our for our Holdings conditions second performance This quarter commentary of XXXX. will are segments by the financial to call golf

will spend results Burke, time discussing and Next, financial Bill Acushnet's some the overall for year-to-date. CFO, quarter the

will expectations. call circumstances. on in making statements to We Acushnet's be These based changes these forward-looking and Actual statements results subject the are are uncertainty today. on may current differ and expectations from forward-looking materially

filings could this to and Commission. my and today's at that, pleasure as release, items Throughout in to discussion, making Explanations we of CEO, list Maher. accompany results filings non-GAAP including of how Acushnet's factors actual slides these and David the basis is the with press financial our David? and GAAP Securities why Exchange these metrics Commission. see be such and that a be to this Exchange the use schedules revenues please of U.S. can and our metrics, constant EBITDA. reference with reconciliations in in U.S. currency it that a the found cause presentation, adjusted we With will Securities differ, to For introduce items

David Maher

successful XXXX, and partners in posted by everyone. the and sales innovative $XXX launches irons currency volumes a report up nd pleased EBITDA up the a Titleist morning Clubs, and year-over-year, new successful a on higher XXX sales AVX basis, quarter execution notably products first-half Golf your worldwide. X% was new am wedges, in Acushnet of model. to by in Balls the Tony. of and consolidated in quarter today. Acushnet We time primarily trade last were team XX.X% growth appreciate year. driven quarter several Good driven million, this our On by had by I our basis. solid Titleist up strong that Thanks, Adjusted constant introduction versus Vokey the the Growth SMX XX.X% was for headlined

last First-half first-half were currency period constant basis. versus position up Adjusted $XXX year, the are Clubs. up we Titleist in over of at of million, like quarter, We driver came sales X.X% first-half the continued the the beyond. X.X% midyear EBITDA of X.X% mark the to our last and of from was success XXXX a in the look year. the the and rest up to primary Similar XXXX growth and on as encouraged same

Acushnet approved As announce per or at a confidence, to Board this the that cash pleased approximately am a of to of of million, Directors has XX. paid of on second $X.XX share be September $X.X quarter payout I result dividend

first six quality page segments five, will it Soft, up now Tour on percentages the and professional the for from the feel. captured ball new in for for with North feedback in the Open, steady marking fast VX its models. Soft is winners to the long the launched we leader including the Acushnet's distance worldwide and our times XXth the played closer It consecutive AVX the unequivocal And of Tour Pro nearest ball, Performance in on on ex-U.S. VX golf Year-to-date most competitor. began PGA premium golfers performance trusting U.S. and year XX% a seven of six on was in tours constant Velocity AVX of a At a the result with and of past Titleist franchise and positive, The story Pro consistent again soft new flat franchise performance their months to presented May. the ball first introductions players this than currency. where successful the July, success, business all with Tour golfers year's with we've market. and roughly sales offer great as we and markets. was exceptionally quarter, one Globally, of and has number spot position look the in America, four the championships. have Pro AVX played, We Tour the balls had take share worldwide, performance sell-through at of tours unmatched which in for be Soft, professional our more launches the major reception In new the continues Velocity, at also the Velocity new the AVX, resulting as represent been exceptionally to models. characteristics. Building of off XX% choices national differentiated throughout start account golfers and franchise, appreciate golf a Pro and more is of championship. balls of Pro VX the XX% Starting results VX VXx were wins both X%

with Our and number ball the ball golf. of educating trade demonstrating consistency golf in performance unmatched fitting every one day, and the teams partners golfers and are connecting

in and driven Clubs growth irons leading and XXX golfers continued new Clubs Titleist the in was performance, putters. strong of has innovation, SMX healthy to quarter, a Golf a hit quality and hybrids, its Titleist Select by posted as moving increase The second the with the Vokey resonating in momentum and XX% to increase to Now the season golf early stride. XX% XXX is worldwide response This Cameron wedges first-half. clubs, sales

optimize launches our great games partners of messaging our new The products. for is efforts and validation doing their Titleist around club and also well-fit a these to support marketing to Pyramid equipment. very buzz various Clubs golfers are interest great continue and amplify doing dedicated our job with Golf fitting Our we exciting, strong. refine is

fairway drivers wedges, the drivers in U.S. as have process metals, high positioned two have drivers begun Titleist the expectations Early the by XX on the new putting our and again putters championship. driver into year. Open June. far hybrids, the been Titleist TS are very in the our adoption And all at prominently first at of so with TS in the at irons, Open, number tour. for played and Tour the Touching seeding with Open, with and driver product XX% TS representing the PGA we new players first the the eclipsed surrounding competition play launches most On time professionals put Titleist play Titleist for excitement on the this U.S.

as fit these exciting increase new to players more We expect adoption able are to into products. steadily we

about fairway Speed hear the up our more will in September. the project for You driver and ramp as next we the TS late launch plans Titleist over several weeks communication

moving months the Gear, Titleist year. to of six the were first side and gear down sales X% for Next, the six X% and for down quarter,

gloves in headwear U.S. growth segment, enough to first-half which business offset bags the our soft golf the For stand outside and And not bag bag the declines in travel, within met was expectations. were and our

bags However, cart period. short fell for the

in strong X% golf, build in FootJoy quarter number results down supporting and second our and one golf through sell shoe glove to its moving to segment, year-to-date. FootJoy, with last and FootJoy booking versus year's healthy Momentum up X% wear was continued the continues growth. advanced apparel Now

collections channel story, is a our impacted the points sales SL been the in price categories. season. the over our lead Within women's FJ the some once success by capture had negatively believe is higher global strongest affected again Pro the XXXX has sales at exit more been course while has this the men's to decision which on apparel which strong had end We better to low margin value it long sophomore within and and in U.S. with good footwear, excelling. will story the FJ very footwear be year-to-date comps. segment footwear planned term for premium has of position brand While

are Looking we golf our of Pro are has women's lastly, and XXXX includes trade line complete new excited in comfort, recently introduce XXXX, leading women's and to models generation and of the which and looking launches creation SL styling fall meet opportunity the been styled this product new for this showcase products. now footwear needs to the the next of XP differentiated in further optimistic to we on franchise. golfers footwear Counting apparel partners has shipping and for to new began balance designed classically U.S. performance, XXXX are lines. will updated about leisure SuperLites which And FootJoy's are the premium been And of we engine.

constant in and stable markets rounds the the back bounced cold QX to which fairly respectively early the down quarter X% first was our at as to in the starts weather Japan and the months. were the various tough season. six up weather and Both sales also X% be for appeared have XX% the up were first-half. On quarter looking weather experienced harsh Overall on the in the from quarter X% half. the in particularly first-half. sales in and in were impacts second to their Korea of EMEA impacted currency quarter Japan it year-to-date. U.S. up where from sales business the first slightly QX basis, EMEA Now late off X% slowed for grew recovered the in X, continue for were up major were Slide X% sales and seasons X% first-half. and solid Korea a X% a up up start Acushnet's as regionally almost and

and of preparation of While the XXXX. our position in and we necessary the are with for inventories, forecast pleased there summary, higher results customary have quarter the back like first-half our pockets and second made mid season half trade of are adjustments XXXX. we In for than normal

meet products this to generally of of our the has positive is outlook is resolute their midpoint of broad team and the at and who Our assortment embraced calendar. new golf needs golfer commitment showing the dedicated a

to established to we've in activities introductions look Acushnet's investment we and innovation consumable, us over product our business through the and the further and wearable to we momentum investing our for the served first-half. believe And FootJoy based loyalty product us categories, well in we first-half. brands. with ongoing and success. golfer the to will the disciplined trust well add positioned offerings balance aim long-term the connection across our several equipment And continue board product of believe new fuel golfer approach and Titleist forward which in cement XXXX, Our

focus delivering golfers, exceptional for to long-term ability total continue in performance and As shareholders a with confident our we our provide opportunity. we are products of quality dedicated investment to on return

always, interest now and quarter in additional provide to turn will over financial our will I on thank comments Acushnet, the who for second call As Bill, you your performance.

Bill Burke

call. to Thanks, the on David, and morning everyone good

driven up and are The indicated, quarter year-over-year the $XXX.X QX increase in with our was from a profit performance X% we largely was margin in points quarter. ASPs a balls. XX.X% Titleist was constant in FootJoy gross year. results currency. AVX As drove on FootJoy wedges SMX $XXX.X sales profit point up XX basis revenue of basis AVX gross wear. higher volume XX.X%, David irons primarily higher in premium million, increase pleased from our increase ASPs up was and golf million, XX Vokey Similarly, year-over-year. in and gross gross last Consolidated And golf QX. Clubs up in and XX.X% including XXX the Titleist margin

last increase expense to $XXX.X product expense $XX.X million increased last promotion research higher XXX,XXX launches by and million was in was was million expense support categories of development and about expenses, an $X.X over or million The selling QX, clubs. in SG&A up golf XX.X% year; operating increase about interest at $X across up and to in of million new year-over-year. versus all SG&A due of advertising in balls $XX.X primarily Looking year. QX In

XX.X%. Our Act. primarily of the The Jobs tax Tax of QX decline the Cut rate effective was enactment year-over-year and result is

attributable As $XX.X to Acushnet by income XX.X% of a year, result, higher income driven million by improved or our $X.X Holdings QX of million last over QX net operations. from

currency. a provided quarter, EBITDA prior million To review up of year of our in results, calculation, XX.X% year-to-date of on constant our the adjusted $X.X over release or a in last slide million period. EBITDA assist $XXX.X Recapping well the X.X% million, on was presentation. reconciliation on this earnings as $XX.X adjusted and For we the year your as up were sales up X.X%

over irons. sales the months wedges $XX.X Titleist profit Year-to-date Clubs million primarily gross of XXX namely first $XXX last year-to-date SG&A first-half XX% Our by million under last in Vokey margin year. six X.X% was last year. driven by versus slightly year, volume million, or increases SMX the expense the up for $XX gross about and was increased

SG&A expense in for both planned and expense and launches. product categories promotion which to expense in average new development million of reflecting increase Research to rates for million to investments compared million the primarily by with increase and to all As the was $X QX, support were across Interest due $X.X was higher higher year XXXX. compared advertizing $X.X selling to last year. increased up interest the first-half an

Our compared was year-to-date last XX.X% effective tax XX.X% to rate year.

the result we assess the ETR continue year that department will to enactment any Jobs of Act the All As of believe year-over-year upon Tax continue now XXXX. and current guidance is company full-year companies, forward. act. with and But monitor readings primarily treasury to through Based be QX, Act. aspects work interpretations various of of a decline practioners we XX% the will impacts going guidance, for our of interpret of treasury and to closer the

for result, year net a primarily Year-to-date million EBITDA over higher operations. income a $XX.X $XX.X year-over-year. first-half million or lower up up and attributable a the income Holdings result X.X% $XXX.X as from Acushnet tax million $X.X was rate expense adjusted As prior to million of income was

unrestricted rolling quarter end Year-to-date EBITDA debt million. as Looking we a XXXX. balance adjusted $XX to approximately our the $XXX of at on CapEx Total cash had outstanding was total XX, was June debt million. $XX hand million to almost X.XXx. is about of sheet, four-quarter basis, On

$XX For XXXX, expect we to still million. be CapEx approximately

continued is of additional leadership growth. investments innovation future While are a and to good technology portion and maintenance-related, drive also in we this making spend market

to Acushnet Board a the to announce declare dividend Directors pleased As quarter. that of this we voted are mentioned, has David $X.XX

strong continues moving be in capabilities have to of confidence Our we dividend indicative cash and strategy the generation our forward.

revenues X.X% versus will we the now As billion. XXXX, range to expect increase range up reported be expect On year. to X% basis, full-year to sales we up currency the outlook $X.XXX constant in a for a of $X.XXX billion in last to of

Our foreign rates. currency revised updated guidance application of primarily reflects the

assess first quarter don't typically I currency had expenses operating adjust to which on As trends. translation. the a of after rates Adjusting sales, relevant half-year of and we've our stated the until call, as impacts cost time we result mark, rates sales, sufficient

ex-U.S. foreign employ comprehensive currency you as to of cost we addition, In sales. program know, our our hedging stabilize

not the impact this, to summary, Given and currency QX we we're approximately million first-half. rates adjusted revised to $XXX full-year strong a continuing EBITDA million, our for be our XXXX In forecast $XXX will as to materially earnings. had

the as our now turn M&A and Tony our balance our we'll products will dividend an repurchases. the will that, in financial review is and to to lastly, upcoming I'll Q&A. call themselves, against we Our the executing policy And and we continue reduction yield debt strategy ensure attractive team flexibility to provide planned With year near back market, present we're new reviewing payouts. And new We'll share performing your over increase products selective XX that on plan. are the may in for our of optimistic focus include consideration launches half. the about capital well and of as also deployment our the to as continue leverage, opportunities

Tony Takazawa

Thanks, questions. Bill. lines we Jack, now the can for up open Thanks.

Operator

first Your of question Instructions] JPMorgan. [Operator comes Boss the Matthew from Certainly. with line

Your line is open.

Steve Zaccone

at the you way think a haven't the you rank to to the guys. what's return morning on advertising Thanks for on top SG&A and just it the on our This is of increase much growth? top Good year, When back congrats you to for in related of the so timeline look Zaccone the Steve a for how elevated there then line, revenue. best was questions; improvement opportunities line just firstly, sequential really would XQ And second leveraged SG&A, to for year-to-date. half for Matt. the in about products. the leverage. new the little And shifting specifically was in How taking quarter

David Maher

at inventories product in to way how our ball, the good of sort the which your QX. in year. the Really advance metals. I happens which Starting product third through to in first every in your to we're in our in ball, the driver hand one roll an as We'll down morning. take to move AVX of fourth and QX. will then inventories during best Pro launch quarter VX launch if And bring-down in of think review the back is think get what see And out question, field the 'XX going is Bill, outside being bring quarter to we benefit of field of story in is okay. we half is the the year, story to Steve, its start I But and due U.S. Pro going the big VX. happen, second even-numbered second that TS that's cadence. question I'll off and you're

you straddle quarters queue expect really September to up and third Here market primary in launch the the with September fourth the can XXth we happening selling launch. for the as

loss, Another to a last is we the just really launching we fourth metals. for the the FootJoy, level variance launched with that the irons, stock you SL in between volume are product that's but with irons scheduled consider QX. some in we which same are is then launch the wont of iron Pro that year, saw fill-in and more launch, than lastly, higher metals products as thought QX, quarter And see of

of we that's of sort the cadence year. back the think So half about key to the how

Bill Burke

in of kick SG&A it and terms I'll Yes, off.

prior expenses. sales, updating have sales, about I the currencies operating comments, on of the an talked If and of that effect remember cost would my translation you impact

results. So translation million $X about up was Of amount merely we ex-U.S. year-to-date. of million by that $XX of were that

XXX investment the we launches behind was million we a what and believe strong but $XX behind this multiple primarily planned club a very had, year-to-date, launch. up we're So was

AVX as new the the quarter product. in product, a As well

I is this we'll to forward So exactly funding want and that, how but… allocate decide look investment, as a think we future we planned for

Steve Zaccone

thanks Great, very much.

David Maher

Steve. you, Thank

question, Next please.

Operator

from comes question Stanley. Kimberly the Morgan Greenberger of line with next Your

Your line is open.

Kimberly Greenberger

terms strength. Great. Thanks driving comments And you talk ago think better the talked apparel years that about in let's different is higher club segment, you golf frankly, Obviously had seemed did if something so going ball two increase And morning. Good wondering just -- growth you your four But that interesting, strategy of Thanks. incremental you happening forecast. can that is than that in on we didn't a Bill, this you margin the the are business, that's is quarter. there cycle higher? to ball, internal about there surprise much in AVX say, ago years result, plan. ASPs. the And or your year's see, much. The that David, have that's where there is I'm gross it was apparel on then wondering in it sales I'm something your drive women's helping to the ASP or helping. in

David Maher

again, I'll the your will questions. Kimberley. the and first-half, take Hi, handle of Bill second-half

momentum, So versus really 'XX down quarter, and good 'XX, a as built the our got in with had around, first-half it in break interest APX transpired categories. particularly of by you I'll what Irons of year the maybe start three a iron. We off first-half. clubs, fourth the the to think lot business really up about last 'XX a lot good a

met time. then which other wedges feel we've about first-half launched line do seen the real in strong as every status was our high half our and launched new high the SMX we every franchise. the basically new was this So series. long those irons, as We in then We we launch And well, that and as a good wedges, We iron introduction year. We Last largely Select And of had had final as window, was was a planned. product in we of the SMX Select our expectations. line year, strong expectations and XXXX. robust putters.

in first-half. our success that wedge nice really performance think club the quarter So category drove the be irons a and the really in I and strong in the introduction one-two would

Bill Burke

the or gross second the about AVX was see in points the Pro say on we Kimberly, would this Yes, in year-on-year VX largely to -- decline basis offsetting, offsetting non I expect margin, a Again, some year. VX should of XX or launch quarter. Pro

been board. FootJoy a So part it. it But good the has of really across was

line, line David select As price managed a the we've as higher women's we've some mentioned had in value footwear, on line. we've in to But also apparel points. pricing markets. in price raise the exited And women's

wear. is So that's categories story I in of think golf good really the across terms -- board all the of FootJoy

Tony Takazawa

you, Kimberley. Thank

Next question, please.

Operator

Your Dave line the comes with Partners. King from ROTH Capital next question of

Your open. is line

Dave King

multipart to much V the business' the And morning, AVX Thanks. guess then I did from I much picture the Pro business. on anything How taking Soft cannibalizing down? at is ball learnings Tour a for Titleist? Good V launch who think any or it's the there on how the selling guys. quarter? then and models? sell-through first question pie guess is all you Pro And far terms contribute it thus How is through, bigger to on Thanks. of Velocity share growing newer of do share in AVX, it's it or

David Maher

Okay, Dave, starting started on the the broader business, May, early really in with days. commentary tackle pleased AVX. and ball we're with those, shipping We I'll

Our key golfers product out this does. we and to what educate set

or get around a around really test. world. topic may -- again lot or last during to We these discussion better May, readiness of months the established the launched we last, Pro the it's And is as word some we maybe share as think May. off a spreading ball out again, nice But we're in franchise. And of suited but text the And two data, message expect, Importantly, ought got this for because fall, from activities. And settle the it when where our the it XX% that from an in. really ascension launched then in this month XX% growing product us and and and over -- VX to a is got it's was ensures we be one benefit Pro share, VX we maybe swag, you'd this really U.S. of and best excitement valuable and well, playing did to form settling country began right. We've And in there who frequent activity the it's size been VXx. happening it's who fitting steady of seeing in as -- one to of the June is Pro really we've nationally data. market we

Looking We've to AVX, third launch at past just we're the markets forward it. with started going in month. quarter ex-U.S. launching this

have the full-year You a need the think really its latter season, first in as we real so to set the in part understand world, as test market will which and XXXX. didn't chance a around education we awareness we're viewing up the to second-half we of build helpful be

that's from, And on business grow while We thinking ball all the to where commentary and my to and best usage incredibly Pro XX%, design affords, As to the to performance tough and looking VX starting strong say Watson, on players. VXx earlier the several to in broader I commentary Pro to over commitment bullish Wins inherent majors. and worldwide are as accept Molinari VX, these the cycles. rooted And see and Pro But the Pro Pro really business product to point going And majors, life the acceptance, on coming come usage still tours. do We on we and it's the quality think we cadences first has excellence. ever. playing direction. there the addition believe VX come Bubba two-year switch Francesco puts Pro worldwide really, is it's happening day it it's at our ball-to-ball powerful comment that year's remarks. every what's to no won by best business, professional are to in on or our now life as game's make be going around then seen Fleetwood, small mind, from which final from other We've certainly last some from six Pro as their going takes commentary that fete. we're now players we was within who manufacturing VX made with we grow maybe tours share, consistency winners the in on and come do went where VX of from, this And golf. recently is thoughts the some some two models very directions. point. VX get Tommy a of all coming the in up the or in from

So broadly VX's the we're golf. of speaking, very standing Pro pleased with world in

do Now level a the meaningful first-half an prior And it higher And great competitive seeing in product so And gains the also this with gains Soft if especially highest what's Velocity, prior we're even-numbered share we're happen and We has we VX we going of every first-half in days. launch of is year. sell-off and market. market, year. all comps Pro that see saw VX, and generation took our very from be this share these during gains this happened. we're of early generation far come And bullish year. the said, share Tour with some would AVX, to year seeing against of Pro it line. story while, hey, even-numbered which always some the deal place away the with competition, came year, in we're understand sell-off the product the from can in in early in share on the that the

with pleased golf very vital signs business. we're overall, of ball So the the

Dave King

the that, for rest with year. answering luck all of Thanks the all taking Great. that. Good and

David Maher

you. Thank

Tony Takazawa

Dave. you, Thank

Next question, please.

Operator

line Siegel Simeon the from Nomura/Instinet. comes question with next of Your

open. is line Your

Dan Stroller

for guys. Hey taking is our questions. Thanks This on for Simeon. Dan

secondly, and for should Just two, travel those tagging any lap along then the bags, to from I headgear, weak? back-half, plans what others benefits? those prices And the when said. the we think you How and think share being said you should gear, about tailwind we for were to could

Bill Burke

price we're shoes highest we're that price new We And are market in some putting are at. the some the of points of key at the obviously at points.

we're As exact on David going to the want to quarter. then going anything our first of we're categories. the in as in to not as some did what obviously, the said, price, But any model tilt exiting or far Dave, doing you back-half hand we're that? be add even value and to

David Maher

second We business Gear gloves, bag competitive business, we primary gloves for business, back-half And I It's in And about headline of cart your bags, the but our is both Dan, had our will, business No, growing year. steady, of segment. around first-half. dip steady, world the couple first-half. a really reasons is the a a that. bags. is bag in been bag stand headwear in address question gear the and the headwear, travel. The nice took

get players some big a some out of realities. a clubs; have purchase need concerned standpoint, from competitive overseas not know, a out a line a in months. new strong competitive product deal but line business an coming less just in year being But issue the got of too a -- somebody with the giving again, we some But got the We're cart second-half giving we back It's hey, space launches a of we will to with that bags issue product think cart more trolley. bag competitive we're player the six with got stories purchase of a We space. three you've You've do we've with. product the been a -- last that it's tale pretty track. and on dealing really a

Dan Stroller

Great, thank very much. you

Tony Takazawa

you. Thank

please. Next question,

Operator

next Your of with Wewer James. question line Dan from comes Raymond the

line open. Your is

Dan Wewer

relates some APX? business incremental determine was you that how the to but a going compared about APX irons, market to share Yes, as ask of is thanks. cannibalization much similar it APX to or been question from either gains Dave, able maybe I to have

David Maher

X, X cover broad a point APX, really have irons, MBCBs the assortment level. designed And and we line news a pieces when got got we vantage Yes. Dan, from golfer of the have we we got got like TMB, broad of dedicated good product and products our in you've all to interest

nothing little is So gaining really I share running to the that, feel headline a TSX positive. which in about fair faster think anticipated but irons, good bit is we we than is say

more but nothing be that nothing are bit me but gain story, in positive seeing excuse and APX. as they're have X Some more the coming really APX has and that's if grabbed and a from irons, would again as and so like concerns think X, tried headline in we else headline what from players APX APX three share APX overall

Dan Wewer

where thinking was market Pro in APX irons say let's just lower for than your cannibalization less would for was had that you balls. be the share VX than in because I AVX

David Maher

of time, really we player to jumped this got to bring APX so product feel did the health level But it needed really overall long, seen Titleist we business at again new and a this in the well good which we and think emerging that. market, level of iron about it's long Part we distance that is we of we vibrancy category haven't into. a

Dan Wewer

I with in Second more question called than the branding, was business, lot to prior TS, the and the your why now guess of is on you're with launches Fairway if the true? you drivers as have the you're new I going distance buzzword the a Fairways I change is had be the interesting focusing it guess also changing in I product the direction your guess so that's would have was driver to it branding in new XXX, on hearing that I was what been curious

David Maher

always to speed product. in-house driver the playability certainly Titleist that was with Well, years been code in and absolute drivers, project speed last name this on for we've the as several we we've our get focused distance on with optimal attempt

this time numerical for be tour a really bag speed thinking players we're what to about on speed, is have from been move or Thursday. and hit started we're felt we we're product, felt way how that cautious the they we are total the its how in its approaching was product U.S. Open put in of list tournament first days of its thinking sense play real as this just XX for a Monday, where about we time event going good, felt which early confirming this is to gives we an as to it in Titleist you from about and the product, So after launched naming you event given speed, typically our differences what we Dan run seen time may it the have this put players right the the positioning and away long as given number TS sequencing, the a for do we been

successful happening, we're those several the advance what's and of you like have we've of point. launch we requires many, in happen taken which really September, we we steps of and them driver where take So taken that many several in will steps late with pleased really at are this

Dan Wewer

question, and I to on us can of had real growing are components China, your tell of you the all in be those guess apparel quick what all what this almost probably will your footwear, the products? exposure tariffs the Just club I manufactured believe

Bill Burke

would either if and encompass pretty a experience in by Trump broader offering automotive broad are impact company producing and steel, in solely have but The overhead steel From see of certainly a employed of categories XXX tariffs not as concentrated for of and XX% XX% a they our was not Bill. standpoint steel the late aluminium production on effect not way proposed XX%. material. the manufacturing bags to with some material this these is These proposed first component it's as standpoint, the if in namely a products products announced along steel business highest impact any the we and XXXX the business foreign material cost meaningful diverse is from XX% the situation meant to course really tariffs yesterday of steel golf labor and need the but it's lot tariffs or doesn't monitor it American considering hedged, our early originally section anything has gear tariffs range use of of because Sure, to enact yesterday administration major you any proposed country. one the sector, supply and our travel U.S. shaft more golf a its are but gear our you consumer cost process, so continue as or material chain headwear gear tariffs products our regionally cost latest

Dan Wewer

you. thank Great,

Tony Takazawa

you, Thank Dan.

Next question please.

Operator

Your next question comes from the line of Michael Schwartz with SunTrust.

Your line open. is

Michael Schwartz

everyone. morning good Hey,

Bill Burke

Good morning.

Michael Schwartz

prior back assume but growth as talked half Pro we've VX half a question you this I into guidance, quick go Pro of had drawdown I imply growth single kind a and years drawdown, Just similar going VX in David back VX revenue we've it launch high the flattish back we've launch about the of a the digit here that those year here. updated seen the on couple driver the Pro or I of the in is know and driver pretty would over in had would launches healthy mid-single

changed or revenue you'd So the that the are just offsets this back half of just at wondering in what's what maybe growth? be type looking year flattish

David Maher

robust comping that what we year. real But albeit as being themselves is Well, QX, launch story VX different was some point it's around to what's Pro TS has little hire again a really about we got Michael, launch. quarter, quarter event you I Again third I'll drawdown right-size it our advance XXXX the think the real really AVX small we've keys is pipeline inventories of quantities the late launch a had which go, bullish excited fourth world. bit and happening to the certainly is activity against and here with in last in offset this are and but field

it's it's in in and level-off the because it robust guys to see sort key and do ramps and should more terms get your into answer out of filling keep I iron QX and that strong so immediate the be pretty pipeline is of QX, out So stated and question of and think year in story forecasts of the But the filling last in the driver in of certainly irons, is quarter so you up where fourth third conversely a you our you'll comp driver balance launch baked mind robust less more based. as irons. a you business year

Michael Schwartz

you're with Okay, I different the marketing mentioned launch seen is ramp new room earlier and then these with that around just doing And differently a tied criminal just products? maybe year, that's of these back it's expense to things maybe little in and club think you the seeding and large wondering SG&A differently this this at is a we've going when market as you'd then some helpful. how looking do to launches TS you how time maybe of some

David Maher

efforts sort in the the the players played for especially that carried the wedges, launch the a differences to behind season ever of point. the of is product we want as given new as roll thus putters in and you lot and line down it TS its that's as it don't seating of just sort We've fitting the of and players we out process on tours launch we've that also we way job see TS our in number and established the the saw into and players a story so comprehensive product the our with the with worldwide product times season Yes we've influencers. on active in up of they counts, see spending new key product been on foremost some seen more first a the think the out baseline starts meaningful because you'll equipment they're just make to about to been you converted spending the more way into clump any of of and The new of to a on to way play and launches. defer we've quickly And the iron works in up us then they do to but terms I bended in we on TS that see season of have about as like middle changes and new a some behalf and really those really the to more it terms this carried metals who of think far will far than engaged really focus in well Rosen to a how in in really mid things in think degree. season. end But

Michael Schwartz

Okay, great thank you.

Tony Takazawa

you, Michael. Thank

please. question Next

Operator

line of next with comes Brett question a Andress Capital. Your from KeyBanc

Your line is open.

Brett Andress

retail we've the we get some take the industry with drivers cetera? sport, what's year? as targeted back rates industry of years good which, see in I Hey, best XQ the for level your August, enter of data of XQ up we broad and get of the questions. your of but similar wanted the in take this seen and to et thanks to in hear from confidence the inflection like your one growth something what's potentially my think domestically to of a demand I here two, could continued see presumably as growth on health the some growth just the on industry several of is strokes, And so taking half we XX% the morning, that in industry that that's we the

David Maher

question, good it couple I'll take And a blocks. Brett. in Yes.

nice of to The activity golf Weather markets. we said, do play. weather wasn't had bit. start commentary rounds And we attention down of in seen And a pay always that were don't at and rounds other We we than a is first a retail. as That anything thing on couple great. some tough in the weather. have little

and see slightly, to up. activity down, correlation own look other you are does how marketplace. our When rounds, from been robust a story the a a rounds down if it going a to last that's with And in consumer tailwind. fewer So the consistent first environment of you broader going hit has little is in while we've that's consumer consuming house, when side to And correlate you to balls. golf in are certainly consumables. marketplace, we it. But the playing and traffic In And of is the rounds clubs you golf seen the equipment. bit be get that. retail spending are And benefited you

it well. We new as with product launches driven some have

And exciting think had we some a a by said, by bit in more of drag of that tailwind. our than with new offset But So I product weather. house, big launches. offset a

Brett Andress

seems domestically. it just will more complete And AVX of clarification it in But, start maybe Got like is question. again the think selling Internationally, it. July. I a

selling it be a in considerably of is AVX smaller? going Or So magnitude fair maybe international expect similar to is that to on piece XQ?

Bill Burke

about the is think business. we typically, And half U.S. -- Yes. U.S. our

QX. And be product So U.S., we about what the really receptive less smaller are it's the about whole so less will you rest because time would when a effect. in the world and a what in new is it QX to lot are got the just in we doing think would market you've of at bringing in a doing

-- So not a then reasons line AVX, golf we would the be in different relatively of we in largest bump bit world are launching small. from for is -- have Japan. modest keep which mind going market. got piece Japan variety while AVX final We've it's the in second product be got a And to there a is a second little

So into this how haven't if are determined we or point. we marketplace at that AVX fit going to

two again, participating not smaller than So third about; two, to things Japan AVX second, in think one, quarter and the launch.

Brett Andress

Understood. Thank you.

Bill Burke

Thanks, Thanks. Brett.

have concluding We comments David. have from and time for will one then few we a more question

Operator

with Research from comes Trading. Your Alexandra & Casey last the Point of line question Compass

Your line open. is

Casey Alexandra

share? can that considered time you XX make just company maximize a a of of so you in driver your product an new smaller of introductions comment. a David, getting have all the the first good cycle, pretty remarkable. longstanding what's evolving that are a well had order which in in an better Hi, this, of become U.S. compete manages at cadence cadence editorial is week Open of how more that Twenty players it has product to remember it sure put the to over but doing set against can't market to eight has competitors I morning. But durable where the years its

David Maher

off and But committed it product answer two-year is to Casey, are good and we and considering reaches the before window yes, to. right through pyramid product not and product the first short which with thoughts, the I'll to our The question. couple a what's launch always And getting are answer which our like of a really marketplace. comes bit. cadence elaborate a lifecycle we short

marketplace. we are launch later, the three June. U.S. in And then about Open here talking months the in we have So

important really very more launch difficult achieve us a a product would lot hits would bit -- is be there lot So the that's happens that that launch. of bit that, a to variety for for A of reasons March or street pyramid before activity like. January little difficult a little a we It to say us.

us in is part course But pyramid it we of Kim. we interest the or are to what role our things now, OEM a products continues to which to said, sell-through and and what years launch changes it of We've terms see retail decided the the it's think launch of timing that cadence for in pyramid the stay the of to in soon." the over really are launch to Classic going Michael it's advance market at cadence. anytime do So to got That to "Hey, course, that's win Obviously Again over several shift a big to level, the a the well, tell with us the a better last couple consolidation are you altering has launch, do usage, the last already and big and the on important demand of are allows changing in of at based we we prompts the through our in launched got clubs. golf the the in shifts the evolve, September within got we I robust John the a we marketplace. advance like. open really when framed pyramid up which we of we why whether Deere might we've and launch. years, here at or that But say, like do building product window happening, we to story some product there moment don't be and

Casey Alexander

secondly, flow share for capital come? you at quarters give in to how versus the for Can Thank dividend expects repurchase your its for allow company quarter, years during amended to in And that. programs. of Okay. and us and the look allocation the terms cash thoughts you the potential share repurchase to company the

David Maher

Sure, Casey.

good. not the pointed you the know, said 'XX, at dilution was record. we But time. announced time still of any you and for our a equity shares introduced purchase on we we and leverage, will know, out, that, time modest of our -- worth grants. associated having target But early for mitigating is being leverage you to largely like quarter that's repurchase a million 'XX, our with of As that plan from in modest, are shared feel very $XX We did to shares Xx end

So have become our consideration we pay continue repurchase we and look but an yield and comes up, make as that share obviously attractive sure to out, of will part set will M&A a dividend, it perhaps. bigger our

out now So, things lot target, as disposal. are that are on a have we nearing that of we

Casey Alexander

All right. Great, you questions. much taking thank for my very

David Maher

Casey. Thanks,

Bill Burke

Thanks, Casey. David?

David Maher

is you Open And to for Cup upon at Bellerive. Players the in In England. and for a great rounds, summer late jockey Championship Thank from FedEx are go Ryder you. Points, Pebble exercise final Women's week be comradely, in and top at as lots and respective a And the world Club sides run both offered by Justin spot a to game the head Cup early the condition of Beach professional brand Yes. the golf. British great of FootJoy U.S. in and his we in in XXXth world's Thomas amateurs ambassador, and are that underway world the everyone. defends Titleist Championship; Thanks to the golf closing, PGA and fall, for next of challenge, title excitement of Amateur I the in encourage rest amateurs, few their out in play Golf and great competition, Tennessee enjoy of golf. tend courses of the golf for the

Acushnet As in interest the Company. always, we appreciate your time and

Operator

Acushnet This quarter XXXX concludes for second We participate. you call. thank Holdings' your the earnings

You may now disconnect.

Acushnet (GOLF) 2 Aug 182018 Q2 Earnings call transcript