GOLF - Earnings call transcript Q1 2024

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Operator

Good morning, everyone, and welcome to the Acushnet Holdings Conference. My name is Kat and I'll be your moderator today. [Operator Instructions]I would now like to pass the conference over to your host, Sondra Lennon, Vice President of FP&A and Investor Relations. Please go ahead.

Sondra Lennon

Good morning, everyone. us Conference Acushnet Call. joining Quarter Corp.'s for Earnings XXXX you today Holdings for First Thank

our Joining our Executive Sullivan, President this and Financial me morning Chief Officer; are and David Maher, Chief Officer. Sean

everyone materially These and over and call differ are current results these statements I to make the turning changes are Actual that call based may to will today. Before we the expectations uncertainty in statements expectations. would circumstances. subject David, from like to remind forward-looking on Acushnet's forward-looking on

XXXX.With when the our the David. are And and ended of context we note period XX, this referring this period presentation of basis directly a sales trends turn X-month EBITDA. financial decreases the Exchange results found this presentation metric Commission.Throughout filings Securities U.S. these metrics For our in call such referring including year-to-date on metrics, that adjusted X-month that the release, Commission. slides how could a feel provides and as the to March why items results the constant throughout comparable currency on differ, these comparable today's factors to are schedules most of in Exchange otherwise non-GAAP I'll references our constant list with to U.S. that a as the Please discussion, to performance items cause the measurement to we comparisons, we unless the and presentation please accompany and and in year-on-year accompany press net to the with stated in and GAAP actual and our will use sales filings see and make business. today's also press to over Securities of that this release, and Explanations increases to basis be currency slides or we best as and that, can XXXX reconciliations reference

David Maher

everyone. morning, good Thanks, Sondra, and

As to North for we and I strong than new enhancements at appreciate distribution am pleased momentum the always, Acushnet American led continued supported clubs year in chain balls in supply Acushnet our a Holdings. startup on expected to report better and our center. by your by interest start golf

quarter, were for off the the given for U.K. weather common particularly in adjusted XX% be continue held starts where starts in the we elevated golf over EBITDA in customary the is to are takes to million, play range early helping belief X% across for in and $XXX last delayed their line rounds and our of poor wide and Conversely, Masters puts seasons.These This QX, the deliver Southeast. in rounds quarter. contributed of healthy. sales $XXX X% products launched worldwide of year. with a constant a than Korea weather not Global to season million, the As portfolio that new caused and golf X% net increase currency related a widely April. to gain with X% positive of March rounds and rainfall up and XX% U.S. the were QX interest more in trends often across

Turning to our segment results.

benefited supported and and growth see in success TruFeel wedges led by rewarded received new noteworthy U.S., was This is Cameron demand comp sizable was U.S. which and gains quarter Design program steep golf in than against balls the You PGA increased and ball gain the VX XX Pro solid successfully by models double-digit last the Titleist from the Soft and the the sales fulfillment we a led clubs expected events golf been of VX given of the ball Tour X% launch SMXX period. XXXX where year's growth. quarter, the AVX, putters have new also Titleist in golf greater T-Series by our first loyalty Scotty XX% the Pro in in We quarter March. launched an launched successfully strong XX% were Vokey especially the by well golf fast season. sales XX and EMEA.Our used winners with also new up and Tour Japan irons Phantom on posted start in in of This

U.S. group the schedule. as launch well wedge launch executed by U.S. the markets. in offset Titleist FootJoy ahead our business up of the few our gear international especially X% in growth in off QX line And global Our sales quarter, was weeks quarter operations was our the was in growth declines in than in on completed a double-digit and more as were our X% in with expectations

we and with pleased as apparel footwear to global with enough value-added footwear.This mobile this for our fitting and momentum the business. KJUS Korean this our net stabilizes golfer to from products service and best a response lines allocated fitting FJ sales in FootJoy reportable not Later most golf FJ in of back longer not down pilot early half are performance FitLab momentum select investment opportunity. month connection will buildout and launch in anticipate segment system growing the to footwear quarter, of new in the the in a in performing, to to year. of tech-enabled market this will offset decline anticipate be fitting term apparel FitLab footwear mode and golf U.S. new and the experience continued Titleist comfortable were help the growth Also best summer fitting increasing the support golfers the the We

Now looking quarter the region. at by

anticipate off their XX% all positive with of as XX% off than in mainly X% Korea Japan EMEA from more gains spring story. And pleased was gains start off the which with the was EMEA market U.S. delayed play balls rounds was strength benefits their slow where start was reflecting by golf continued and wet as DC start to of Asia North golf our categories. from Titleist were year as rounds in to as the coinciding clubs segments and are especially poor and golf an seasons at and golf delayed and the golf a improving up. we were summary, with product to and see their other XX% from apparel coming our progress You in clubs we results season. open declines offset season weather, off declines X%.In starts American up offset

be support is positions and organic time healthy As is sports profile sheet Sean or and golf macroeconomic well as not shareholder due continued to And related strong business proven company investment pressures, on with return the avidity demographic our balance industry programs. and the will address, resilient our to core enter golfer. dedicated we Acushnet to QX footing. inventory to consumer, weather firm our of positioned favorable immune has while over The a is the

compelling teams our global nice are deliver ability now work morning. to over for shops; service we golfers attention have call fitting pass positioning and season.Thanks experiences in golf confident the to your Our Titleist, upcoming will to throughout in I done and and FootJoy KJUS product, this products the Sean.

Sean Sullivan

Good Thank morning, David. you, everyone.

expense profit FootJoy net by related declined of part expense, David or sales products in and or information Titleist technology XXXX sales were XXXX year. which first and net X% continued transitions by an net retail Geographically Interest of due quarter footwear sales momentum restructuring million was to in quarter our employee million Net by expense expense XX%, sales $XXX absorption million quarter declined lower manufacturing increased lower the of by and the in to certain but the and EMEA quarter. FootJoy quarter golf X% our primarily golf our million, segment from XXXX. of sales the production $XX portion costs quarter in closing lower production Korea. strong in X.X% up clubs, SG&A promotional sales net of in As our $XXX.X net in increase QX the was first growth of sales $XX net sales up in EBITDA start million respectively. of partially borrowings. $XX also the balls $XXX Korea, with Japan wear.SG&A due million X% driven related X in XXXX of prior to golf related brand lines increases expenses, offset that within X% was commission to segments. and gear to in a of wear unfavorable to of in Gross the Adjusted the net golf first and X%, quarter growing lower as partially and were due reportable the in from selling million included FootJoy $X overhead with Vietnam. U.S.; $X a expenses to due increase in rates golf offset a to to in X% million interest had was not over quarter increase of allocated up and primarily expense China compared in first are increased X advertising a highlighted, we

rate shift balance highlights. jurisdictional our a flow year earnings.Moving sheet in tax our of effective XX.X%, by cash was in from Our driven up XX.X% primarily QX to last mix and

with execute Our allowing capital strategy highest to to return being of us ongoing allocation continue investments our the balance priorities. sheet strong to in capital and cash and our shareholders business be positions very flow

million current of from repurchases quarter of down the overall returned in Our year capital. are in of trailing the at Inventories dividends. to X.Xx. $XX primarily operations are inventories with net net were XXXX point the the quarter debt Capital still and year, are across XXXX million this we $XX XX% from with first in at reach expenditures the quarter comfortable $XX March, all to fiscal cash When quarter, of changes ratio of end our last our $X to we and million approximately product due expected in with comparing increased segments. shareholders Cash year's share fourth used average and in decreases roughly using XXXX position. 'XX.Through was million to leverage QX XX% declined first working $XX inventory million in in first

$XX.X with amount X to open new June on as XXXX our April to quarterly of purchase shareholders XXXX. on into the share June market aggregate of an dividend declared to Magnus equal X, agreement a of Directors from purchase on Board record a XX we During to March $X.XXX entered of cash On XX, we per an up April, of payable XXXX million. June XX, stock

As $XXX share under of had remaining we million the repurchase current March XX, XXXX authorization.

year full our to outlook. Turning XXXX

up view maintaining billion, billion $X.XX on our currency basis for compared midpoint are be and XXXX. revenue to between $X.X X.X% at to the We constant a

our our start mentioned, reaffirming year behind the we outlook and had million $XXX to our XXXX EBITDA operations models loyalty full golf million.As was the solid between rewarded our are $XXX We fulfillment during and wedges. still and be SMXX quarter. adjusted successful launched clubs, in of team Vokey year also to and our newly ball David expect a strong In of program the launch demand

in half very sales the we are pleased Following these net to first the low year first on year.With to still closing, with Q&A. our on compared we initiatives half. of of half remainder our focused Sondra last remain now digits in turn accomplishments, EBITDA XXXX to and with to single quarter the that, up executing In performance adjusted be of the the and call expect first over for flat year's for the strategic first will be I the

Sondra Lennon

lines Thank you, up the open now we could questions? Sean. Operator, for

Operator

have question from Matthew Boss from JPMorgan. [Operator our Instructions] first We

Matthew Boss

a nice And quarter. really on congrats

engagement elaborate just the dedicated callouts the momentum Any in global cited and from Masters? you a line golf with on U.S. healthy in performance? David, Could divergence top you post is front overall you're on international your participation on And golfer? So structurally today. change the any the that industry basis, seeing

David Maher

for that That think worth and you salt play minute be strong market. or off, affected So I needs the a because X% the some tough of Southeast X% data, I affected up some-odd quarter. market. first at up in to think it's the play look rounds had taken U.S. with XX% and in to of a Very grain March the weather

QX play in So QX. and pleased we're of the north in in levels. overall are play south the of the in with different participation than rounds demand interest very Rounds in

markets I slower saw and some where differences we think points where you you upticks. the you overall, you weather, had saw that had saw. structurally rounds really very tough decline, But a just weather, nice favorable pleased. conversely again in retail; to you saw weather And

weather, starts.Wet speaking weather, to out saw starts the common a out quicker to you globe around bit, I the But wet a have had favorable. going called you're think and I some starts we their Moving slow U.K. to generally season. where I particularly and in saw called Very the decent Korea you play season. some some rounds QX, starts the slowed of

in our player, strong, So terms has to Again callout But in product of whether launched really we're golf months the that resilient. on all focused we from Pro launches not I of comped the the noted early changed also avid, this some new a gains golfer and launch. biggest point unique our is quarter last is lot I'll stage a on they're the and newly was weather. pleased year's performance that and and call Demand they're quarters. to dedicated balls, against last it's it at in VX, which demand, models drove

quarter. the out in So way that played the like we

is see QX a XXXX.But see and was timing lows -- in other or saw note et too the salt, you be a it QX taken simply terms of down, a expectations. softness the you participation days, key a with just strong and grain But from weather, you line markets putter. because some decent that in I from and by much always see out Some where markets consumer do we days play club in again about won't where what I lot saw early any lot highs upticks. a in led needs weather plays gains increase than in of of Florida, putters, lot increase a of Matt, was the in the of Mallets we mallet I of weather, with of that's that launches rounds in Alabama, a careful with we came in mallet particularly like we we're wedges again these launch to key lot the which in strong cetera. shipments saw call our and what had than in what in. why north is it is differently are QX U.S. say Carolinas, in so fortuitous Phantom behavior, Vokey you deducing

you on of a demand, a gave quick how lot covered early So ground the of and state hopefully participation consumer. about but there, we think snapshot

Matthew Boss

you comfort And Could the potential about and inventory color. as timeline on quarter the top down line category then the we return midteen. maybe just great first overall clean latest across support to And inventory on footwear exiting It's with think returning this hand with speak the just demand? growth? to just marketplace to your category, to the

Sean Sullivan

Yes. start Matt, can maybe and David I'll in. jump

feel about wanted for called feel we where call inventory sequentially, we about we position. quarters, So year-over-year. good We've footwear good are very last we of the to out the out we inventory very couple position. Obviously are where the

investment QX. about gen all we current across capital product our feel the of here board working the or in gen, prior whether So it's very good segments there we in as sit

David Maher

Sean's this year. comments. Yes. Matt, should I'll of just a they are full as just be to follow echo bit The time on that channels

not I'll color of Maybe far time like there's in something outlying and right quantity any footwear. down XX% see it ought our we like last golf market think all-in, areas to both a it don't not terms it's bit the work reinforce inventory If where off just year quality. really of to The more, U.S., be we'd we So from channel in X really and believe on. this have total XXXX. inventory balls more that's on area we we continue position concern market's from footwear to and or inventories about and

footwear XXXX. category where has X%, grown from today X%, up inventories footwear only were they but the are So in X% nicely,

Little quarter is market or in where like months surprising. I the year world, the XX we footwear which footwear, trailing story around X, is. of that's U.S. think or after So a different correction a not

we So we and see take world probably out principally, another see correction inventories, Japan or call quarter rest we'd of X. that and EMEA

Matthew Boss

of luck. Best Congrats.

Operator

The next Megan Stanley. Morgan question from is from Alexander

Megan Christine Alexander

left the you on Wanted for to you some ask year. unchanged Sean, the commentary gave a little bit, guidance, it

unchanged slower what more a any to know least after the was of sell-in a XQ your over seems XQ your You a given is to kept I momentum expecting quarter start. despite wait like beat half historically quarter. at been XQ and until solid it's expectations versus practice the make first it Street changes

how that should being related weeks that some guidance is mention the today? schedule. you you to completed about think we global Maybe few So did launch of unchanged a that, ahead of the clubs

of versus club So expectations? sell-through was in segment there seeing XQ any kind you golf into pull and trends how your are that forward

Sean Sullivan

Yes, Megan.

So in to said, first David the first a half, second guidance really half, it's I the half. as think

that half. about. to of all what first signs the So the We David with think are the weather exception the expectation talked do is for hold has vital positive

this launch So certainly across in We'll obviously had for advertising, for the QX. year first board low the think fitting said, to balls a the QX, growth we some That we're SMXX just the look across still very single-digit full stage of still with of and loyalty the support to expectations good to board, promotion, as of it's half our Vokey hold program, prudent clubs and IT a continue And we about strong rewarded feel in related obviously the the implies expenses. the the what are as at quarter. year. our pleased said, invest, terms you network, it we've being

I'll SG&A. in center are So we we're distribution in continue than the with anticipated. March called say last and had we we is, our comments, out his of appropriately it efficient really thing probably the month David and And to invest in pleased more

as first the together half in when early that call think leave So revisit. articulated we still and bit. can certainly or in the But a But the exceeded positive, whenever our July I'll again all all is, expectations at back things certainly year August, see and full it certainly we've we I we're all, that.

David Maher

in In I just respects after we've in the everybody's made second adjusted guidance to that historical crystal season a comment a don't Masters as QX up. my all clearer quarter some that maybe begins and I lot that's April, time true. ever reality the the the the company, gets the many markets open with business know Megan, truly golf really speaks ball of color. with about golf in it

the up. and world a to need the And been always you QX. some you of on markets distribution around year maybe can't ago. it's until have open just and staffing to and that's that snow progress up, how really see you get mid-belt in then bit open another anticipated again clear, clear training X, sense belt weeks So X related through better we than industry how thought markets really And our feeling quite gone a along center the

being pleased new our we're at So the very with DC. progress made

Megan Christine Alexander

expectations Can Great. That's point. And a really to The bit just you just your helpful. a out a then maybe margin margins the that EBITDA talk and particularly gross promotional again. how and given about played I the think being pressured promotional growth bit environment. perhaps out you relative just that XQ little in up about to how there? follow-up environment more looks talked

So just your to played relative out understand we the as quarter. think that about second how trying to expectations

Sean Sullivan

question. Sure. I'll the take Megan, margin

certainly weren't with gross surprised of guess we balls it the was think and the I and those margin margin and performance by X trajectory in in the expectations segments, of I both product quarter. profile the clubs line given

David Maher

sell-off areas I are ordinary simply are don't QX the and seasons. those promotional year full retailers drivers are because of as be to in some anticipation that that, get I prior launches discounting should playing peak they the time happened whole environment; balls. generation. full, as would degree there though. market, There of thing with that the and to the golf a characterize this markets point Same out of As QX we know X of would were of and any again you in competitive of lot Megan, of the

pick activity I season. early from it up, you either promotional off too as tends just be reality. activity after QX as or see norms low far being see another noteworthy don't and the promotional QX, high to So late the too or When

of a what not we than So what seeing to lot new add we're of time year. other about is this expected color for

Operator

from is Jefferies. Konik The from next question Randy

Randal Konik

you. I guess for first David,

this share and very with too You've continues drivers about the far get can just how participation ahead. lesson [ surprising you much you? point with always area a long-term view some been or to list level, on give very it And perspective on? levels? in grass Country you helpful industry junior as partners relates ] and never participation. then then your get could perspective Anything industry on is to balanced green it programming And the yet data surprising the your maybe power your Is to us be female to from you us Club waiting would perspective of

David Maher

use seen appreciate point I questions. So real a good in the has increased, positive where at industry hard Well, working make of time Randy. right? and From an years interest we're in standpoint, Okay, a X we've obviously to golfers the demand. your that industry where of is number

is on is but experience. another course there's certainly happens focus whole don't on to in, we obviously course say happening and participate world course Our the a that on would additive I off what

the to and some juniors profile You data, women fastest of NGF they'll being segments. look growing at point

leave would because hard and new of industry difficult. are of is to there number it. it? the the and that out who and Watt think think said let's was lessons.And let it game the it's is hard couple a about And make of we themes was ], and accommodating by parade the game reasons There doing I without working what's be doing from don't to welcoming the So [ be the something and a I X great about people this sure responsive game line just go stand PGA, Seth players

can if and will, way sticky, execute difficult game is and you X to less more make So the provide more you lessons.

reality unintended And the as long-term are how think in drivers the we U.S. time they've So would participation, years about been last an globally benefit we're in handful around of that, out call of sort the world. of and I busy game. terms we've long seeing the and both as of that in teachers in what the seen of a it's

As an game clubs, recent to that facilities done incredible of tomorrow's well in golf there's well; we consumer a golf prior. amount clubs, golf seen quite position centers done as years; capital golf family for few the the in for courses, has needs hadn't golf retailers participants, have been investment of decades and

So I your such on itself like the rounds game to point investment is is the played quick a that of of the public thought to I'm the are needs sense level meet not good position to making in private. and that Randy, the about of tomorrow's consumers.And final that one out then, X/X waitlists

I again say the not tee bit ago were little on to as itself maybe the at golfers clubs times tomorrow. the and it's peak season get But that we years it's they in industry for But long is So tough healthy some been is would reality. demand. a and facilities waitlists and immune are X and in hear continually as But reinvest because capacity from time their key nonetheless, in markets. value to proposition X, peak have allows just particularly that narrative waitlist weekends as general most feeds to the during COVID of quite as

and is and key join it's high a with tough in get in reality tee start are is in call a markets. we here markets Demand So I start it's do tough out in some to a to times markets, markets. clubs key the year other to to get still slower nice

last that state Probably but the today. that's current does Now forever? not,

Randal Konik

Sean. model this margins around were And super in I guess look don't XX% EBITDA around, XX%, That's XX%. XX-year to now usually helpful. you that the you ballpark. then XX%, historical company, have at maybe I for for question We're that When last just somewhere know,

and have should lower Have of about kind Just customization margin long term? we should business? how we a you consolidated put this potential that of thinking puts be be some industry, et the thinking there's fittings, long-term about kind thoughts to comps, there's in takes You over cetera.

Sean Sullivan

into Randy, service here talk dedicated I often. about growth we we're is golfer I about think before dedicated of certainly for building in we the the the of so and specifically products I guess continues terms it golfer universe quite what and that margin, assets have that excited to most blocks as the that the the participation occurring building growth extent that excluding things years that to portfolio these about, have that expand done blocks get and rates got We've still X the X a we growth. we've opportunities investments we're feel or that's any real for M&A. that one, all of continue, to potential few are last over long-term number and excited for

about to needs and the line golfer; terms customization, of making dedicated the to in first X- period.Number be over outlook that's we've across of of foremost, meet company the XX-year we're fitting. the terms excited can company about growth two, top talked a of what So the on the for we're a in lot investments as

believe like fitting we and of and personalized our of So we we're there customization the certainly positioned margin well profile products.

there's direct-to-consumer leverage partners, opportunity. through channels and through operating and Certainly the about and of the EBITDA continue efficiency in talk ability growth. think channels, In addition through margin managing technology, all we use off-course business and key to we long-term technology on and to the deliver obviously all incremental

the we're across going investments got So road certainly and the from long-term now. trajectory globe the will we've that, X believe I the said, that making outlook portfolio margin long and we revenue the time as are growth certainly not a appropriate expansion. dimensionalize in to I map drive But to that see. and hopefully what puts of XX years, see I kind I'm and those the

Operator

Raymond from is Altobello James. Joe from question next The

Joseph Altobello

I what the in your Maybe the guess VXx quarter quarter like think first meaningful in the you VX, against guys period, and unusual. question, get sell-through growth of did thoughts I in look I of quarter? the experience on launch sort is wanted did Pro gain to which Pro any the share

David Maher

take that one. I'll Joe,

given we significant you So X-year our launch it's and launch following against cycles. unusual in year when favorably a last year it a had life comp the product is,

really start the key ops we in program, rewarded our for that nice nice job to loyalty fulfilling did March. our team X free saw is think and get our demand demand which I buy season a X differential, the

So around we product. like the message that demand our sends for

So one. that was theme

off we're new off market year. a prior of the of our their range last terms little prior We comp quarter comp we In even some always position. when launched big generation year. year about this in coming generation whole share, inventory different very feel an year It's this of last first as off We market we new sold some a competitors inventory.And our sell products of again against a conversely, strong year.

net-net like see And we nice would way add moving ball corporate the business the So space in products. we demand for I corporate to is our along. logo continue

just do of ball the business around of quarter the we globe in with state again in couple slower. are of piece demand the weather that's the do another the keep obviously and pleased our starts, where dimension weather success. they're really golf overall regional we but here driving or But that's our performance where life and not what and to slow golf hate To our playing, business that's in is demand, ball I piece, business to and going are the fitting ball to teams drilling to So readiness due But overall, demand; playing golf people the QX. simply said on months. they're like our next first

Joseph Altobello

of yen business And cash bit Very are any weakened maybe little guess maybe And you impact this Sean. insignificant there conversion about really terms year? Is a free in of out? here. to your for has or flow outlook how a couple helpful. your the first, for EBITDA I too call thinking is it on secondly, follow-ups

Sean Sullivan

sure watching certainly one. year-over-year. we're the in second Sorry, it's had the of Obviously an I'm yen, levels. I But at $X-plus not We million which quarter, historic the got definitely first terms probably was in it. impact impact

it. XXXX we're international Overall Japan. for keeping So eye in the we on we're to an like continue businesses keeping our Certainly the overall aggregate. on eye

And your second Joe, sorry, question?

Joseph Altobello

EBITDA year? relative free cash conversion to flow Yes, this

Sean Sullivan

rate similar not us expect convert historically. that to don't I But the we Yes, that have know we I guide again that. to would at

Operator

question The from Casey next Point. is from Alexander Compass

Casey Alexander

There uptick question, move travel Has sort in He this on you one. Glove, of this Is at a Club for year? new I'll towards walk in towards my press that be on? a brought of in a Japan sort of Did control just demand there products nod stole took to company basically that an been which release. tip demand next you to hat the seemed little of you related Club my kind uptick Glove? nice into but

David Maher

make wouldn't assumption. that I Casey,

a enthused today the looking were while Glove. Club back had of this maybe that were again it's I we Glove pulled Club nice we're rather commentary both also that last term, were quarter and to more some story. that business. simply to on the We and piece Titleist felt start read too up it's about But I story. to the XX% Glove think we we're and of the year I we because while products piece and early a And bullish with gear wouldn't Glove, again year, wouldn't much redundant point Club on pleased into branded some bit a Club while total added the in gear our longer small even travel comp of

Casey Alexander

All change increments closer of right. the Magnus Why I'm this down several that why been try the is after to pulled million. is? when to repurchase? historically million. curious second were $XX.X in to the that in question do Is $XXX $XXX repurchase recent And you at to one price the the what it repurchase keep from secondly, cadence stock has just and change my cadence million most

Sean Sullivan

said in That's Sean. the really At end guided terms times, leverage, of by leverage X.XXx. as below few good the question. a it's I've right, Casey, maintaining day, we're the of a

So often working agreement capital, given and we of share the in with the repurchase in the cadence the leverage. year at sell-in of investment the in first the look the overall context Magnus quarter, the

but point balance So manage I whole to leverage that we're really target. I to you current sheet practice practice, lot that the know very a maintain into don't read I and strong with would business trying to a or past

Operator

The Mike from next from question is Swartz Securities. Truist

Michael Swartz

wanted a it. numbered on In even view but to level a and maybe taking up the little ball just Joe's February, the start rare the year ball you I Pro of typical business higher a lapping that I following had VX question, and ball been in said grow business business if grown expected very it's you even launch back year-over-year. has to think with

program you've a the number changed maybe you're of this is that relative level rebuilding low had too in factor are you've structurally understanding inventory you this year. that more even loyalty of just But and where year? or product this think prepandemic before, still can I in business a of launches got levels some some new years still grow now guess to something I has

David Maher

demand years balls keep been are for played time a to the I would and want it million I Mike, the with more producing the the XXX being What's represented. represent in I've pace this ago. on you of there a also brand golf good so to right? product versus math today near do rounds enough means would So way ball today company. at played in to said before, quite it's about say capacity golf be were it to golf to different of or market some a question. and that handful we've say what that than XXXX, annually we put full

couple mentioned of this X I last ought are are last X and return where output as So demand global a answer, not and is to X our to but would would manufacturing health up. we're of think singular without seeing ago, inventories being point in across year have to nice think pointing or a We the We moment board. they years. the overall be.So and our I event, certainly shape year and channel versus capabilities rather for shares say better corporate I business the healthy singular up.

So than positives longer a from have last were a case. standpoint times there bit a the lead liked. and We That the quarter. no constrained lot supply would we were of longer year is and to particularly

whereas perform limitations think seeing had had demand, et last business of you're the So due I et the materials, cetera, years sort of strong to due couple we've now limitations to cetera. without raw we've limitations right

we the X VX are. do will the was long again term you in the given at like production expect comped longer launch QX we're not some I time schedules I ideas a so to think for saw we capacity where we for point normalize operating to of we'd say business way Pro peak that So that as happen.But as will where our I've X we as or we like we we are and at being, why is favorably. running saw 'XX what and again like

of feel golf are So most business but playing not our when good weather's people is really and weather because now really pressing purchasing balls. ball about pressing obviously Titleist golf we interest threat, out the right area our most and decent,

gives So hopefully color. some that you

Michael Swartz

Obviously that. second came finer of because Yes, gave that put EBITDA year first question was cadence to it I when great, you a year-over-year. And back in dollars February, of then just on point just guidance think implied the ahead quarter the I in kind of down think the you and the

assumption the little February? at been quarter second is the distribution into talked maybe versus I that quarter of some in of would product launch Vokey that when guess first and So the performance of in have your simply a bit your that the better center slipping we

Sean Sullivan

half versus fair of end Yes, we February. sit a of That's that's the of in terms fair. the portrayal first where today here

Operator

Capital from is The Noah next KeyBanc question Markets. from Zatzkin

Noah Zatzkin

on March of from across April? if your demand terms April wondering and Has FootJoy? to of Just categories quarter any there's relates sell-through it great into would strong? in trajectory sense be remained Any exiting in color through as there the particularly early reads

David Maher

was was the Yes. in where QX I weather common good; demand decent, demand weather less say affected. would where was was theme was than decent,

not was than begin say partners we have weather from as Southeast some April, would again this we turned particular hear retail their rounds slower more seasons every in would liked, to profile. our up. given to the hear March surprising and as I as year positives we the and turned So did opened

the So as great and launch pleased been start narrative lines, demand, job did about weak think season is and strong. demand Team our I demand. a early especially to versus I've delayed demand there. our we've said with wedge has Within strong early more been product

our custom products in activity a And this activity, apparel product the business that custom we'll in We about I So are later really footwear have going and read July.So like your on much our May, of better we much opportunities again to our fitting fit happening balls, to golf and just to going of month. whether called glove final footwear out it's April, new a fitting June, now our that we're start on embark here and what's business. comment our clubs, like here business lot some is FootJoy, story. golf

was outside we've were than growth pointed obviously after back out I start in we to half U.S. by pleased which think slow although did business the more some declines a we U.S., growth that in what the with offset call

really a optimistic about. good really the built working growth for through and its year we way a So again FootJoy X of quarters correction back feel the in period we're is portfolio around product that

Noah Zatzkin

the distribution question Great. around expectations. America startup Maybe North X just center your comments other just on exceeding

long color and provide you wondering bit both term should benefits in we a the term? could potential how be of there thinking about P&L if of Just near terms

Sean Sullivan

where Noah, so be. it's getting throughput about again hiring, as and about training to really want David said; the it's the it and efficiency we to it's about up

So efficiency the much there FootJoy and products Titleist we are term, I is longer primary it's gear. When and customization. control think think ownership it and as about

a the this also So of big center, customization a strategic excellence. part distribution of of benefit it's center

much about doing it serving about quality it as is is product customers our and well this efficiently. So

about ramp of further that where opportunity hope good feel So that We the very Certainly more we're we're still facility there portfolio. across is in stages leverage to at. up. early the

location. we that transpired Again So went QX. that's the live of in a of X color January from little on what bit

after So we're are where operation. X of we months pleased

David Maher

that I'll products. just points with embroidery some control felt the pressure COVID Sean Noah. We customization take embroidery, for add and of gear that, some of those and throughout apparel years distribution to distribution decision greater outlined golf to bag that led historical FootJoy the on and and context

I'll years partners trade few deliver done and think of Sean's job allows echo better nice points the the we origins like pressure a to team mobilizing have because, just and some back the it really a to to and golfers. control us were we has comments, our So service again we

Operator

a have We Wollam from question ROTH from J.P. MKM.

John-Paul Wollam

and terms expected the maybe always for Maybe usual costs understanding far. guidance, of putting you and in together in I'm lab. investments that the to that but be that there's fitting in just And SG&A EBITDA FJ made of that contemplated year? will kind half about more of investments of so kind protocol going IT alluded and through year? terms the investments investment the the infrastructure of those read of been new forward to have curious maybe of or if QX been first anything of Are have than of back some then and kind forward the in particularly kind half in back kind impacting

Sean Sullivan

J.P., I'll start.

if I in at So OpEx of correctly. in I the the right, end think growth 'XX, did talk that outpacing we about sales year, recall

expected. So this is

are in enterprise through to are of some we're these investments, of that this around important these about the to stages But recognize of throughout again technology. see fitting specific segments apps think some networks, and fitting early I still you'll this flow year. product the and things

and it's So flow we year embedded continue full intend through guidance. do to you'll in XXXX invest in to and see SG&A that our in

necessary deliver these leverage expect that better years. appropriate, in here serve we the to operating we create think to certainly are outer So all and

David Maher

a follow Yes, FitLab. has just outyear for about contemplated J.P., And quick question plans. been your planned on our that to for and FootJoy's in

we're enthused running. of than late I to follow that more in but program getting 'XX, it think about XXXX

John-Paul Wollam

just portfolio. said half kind stabilizing thinking color? of on touched optimistic optimistic your In about in things Okay. a the could markets, In just bit But maybe back I think you international give you product being then of the maybe more you about FootJoy. maybe are on year. little kind you of the Understood. remarks, that And prepared about

you confidence behavior specifically with And broader seeing customer gives then the kind international you're of on anything what So side? there? just maybe

David Maher

your X is us the part inventory So comfort correcting question, footwear of landscape. gives to what

feel that We before, U.S. X it's noted, U.S. in this I the the confident and think out will about of quarter Korea spoke we as and will all call markets seeing new we golf that Korea years unique brand. whole apparel of entrants we're super more the and a and by couple Titleist seen be we lot a with bit pursue recently apparel and in region world, As has some positioned normalized products or market but both demand a and outside Strong has specific activities. that promotional around better That process premium I think FootJoy last that happens, of you brand growth of and resulted succeed. the followed to inventory in a very a outsized when corrected the our just correction. excess takes another

and long apparel correction while Korea the we over is withstand midst the in market So it in softness. only unique we for as we that That's like a space.We've the though positioning worth real like within the planned we're have market of our I in our and noting. effects term we think callout ability to golf factored this of feel XXXX, the correction

and growth start. side anticipate we're will a term for unique we callout at I market the in X seeing FootJoy we're a up slow affect, shows a does The a hit outsized we the particularly the it is EMEA after just shows think the effects over our is like the in area I on this other But Titleist withstand it is stage. and to on, I year period good only side, it correction. just that's others market We correct think positioning which our that segment up on of in to and that full throughout the softness think of Korea year But think we probably shape again. the the correct a going warrants long

John-Paul Wollam

Great. I forward. of appreciate the luck moving color. Best

David Maher

advantage take call. you some forward weather in the nice all and here months questions go golf for look next with again. to on our we Thanks interest. play Thanks to some few speaking you and your and Hopefully of

Operator

This you call. concludes for joining. Thank today's

lines. disconnect now You your may

Acushnet (GOLF) 7 May 242024 Q1 Earnings call transcript