GOLF - Earnings call transcript Q2 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, everyone and welcome to today's Acushnet Company 2Q '24 Earnings Call. My name is Drew and I'll be your operator today. [Operator Instructions] I will now turn our call over to Sondra Lennon, Vice President, Planning, Analysis and Investor Relations to begin. Please go ahead.

Sondra Lennon

Good morning everyone. us our joining Holdings for you today Acushnet for Corp. Thank

XXXX Earnings Quarter Conference Second Call.

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

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

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

David Maher

everyone. morning, good and Sondra Thank

appreciate we interest Company. Acushnet always As your the in

We of be the about half second right and overall to enthused see Getting slide excellence work state you first especially Golf company's the teammates appreciative of their my to to great our comments the on I'm X quarter here fueled success. commitment continue for which half first industry results. and our and

quarter, from first the net million, also for while through of segments Acushnet a of contributed to across X% the year-over-year Titleist that the adjusted sales compared increased quarter, $XXX X%, reflect which million to Balls. This first have we contributors regions and to delivered primarily last X% $XXX EBITDA gains quarter. these For second related last $XXX are billion were several of sales differences $X.XX of the year's And up the $X.X to half year's million Golf half. results, million EBITDA down half. adjusted in increase experienced in net There

Golf First is Golf in and X%, grew the global momentum which the behind half. Clubs, Balls and Titleist respectively, X%

golf nice and continue to and ] wide a golf Our and seen capacity. at last we Titleist of in of our in a year VX full regions growth ball especially meet introductions. pace ended the the launch with are all the against golf facilities half balls momentum. setting in back business Double-digit challenging comp year [ competitive ball a first production where range we demand in we the Korea well half Golf year's gains U.S. healthy half Titleist in performed with operate Ball the Pro have three To

Pro XX the by ball T-Series and golf fueled imprint first Putters VX benefits seeing the golf our Titleist double by capabilities and from balls for half EMEA our in demand and half terrific club form recent PGA program as are led initial Pyramid across custom been Pro has sales the across in new Titleist throughput capacity was a for growth capital Tour VXx the well. irons. four notching plants of our also year-to-date followed Japan with the improved and Influence with investment we of competitor. Phantom Scotty to facilities. It U.S. urethane efficiency steady and Cameron Additionally, nearest up way and compared the growth Vokey digits, for as wins in SMXX wedges, the expanded

given a the in cycles. Compared been past the irons. has product launch life increased last up sales relevant GT year, And months of and new especially the XX% two of for wedges, half years putters clubs club While is Titleist over XXXX, more preparing over Titleist half upcoming from to Metals. were our few with first ago, X% team busy against coming our comp growth the club first extended

We and are GT as response has most played the player on pleased World the PGA DP recent with the at both been driver early events new Tours.

demand you as global prior to we our build and would month. see this later market As as we expect, launch interest powerful this validation

to clubs and performance double-digit addition In clubs, was half grew success the led golf Apparel from growth market, contributor balls our across-the-board KJUS, to U.S. first with in our X% from momentum balls and another in which the in by this gains and FJ strong This golf Titleist FJ footwear. along gear, was half.

each businesses the apparel. slow rounds an as cold of summer. This endured off to and were the region with offset from poor the first East digits in especially U.S. of where start single achieved comps and our healthy to continues and start up wet our These participation clubs and with weather X% helped despite footwear balls, spring benefit a half much high unusually across this region in FootJoy growth business U.S. has in Coast. Europe, Our slow rounds impacted from tailwinds

closely as Our this of reduced teams effects channel region and activity weather traffic. monitoring promotional to inevitable season early inventories the reacts are and poor

in continues slow X% And excess footwear rounds half X%, down QX and through while across play starts the QX. with respectively, up and we are golf region which inventories, of work results in apparel our our negatively impacted Korea both ball pleased up Asia, be weather-related has projected are to regions. club these momentum Japan made to in in markets First ground as and and after

and As we we amount inventory the Europe market remain of growth, many the And expect said in in elevated a market soft comfortable in normalized are competitors following premium channel that inventory as still of significant recent Korea's our which the have years. for market, inventories last brought will seeing a Asia. apparel levels footwear and accelerated new call, corrects the period while we U.S. we in near-term are on

slightly Premiere collections consumer, comp from golfer. From execute and company products disciplined a and is back of shareholders. are but of and the has to expect benefit their Looking good readiness long-term done half new for build in well-positioned continue supply and that pass schedule the your projected timeless We a fueled athletic attention summary, for and XXXX. with the comfort for with and forward, and momentum XXXX and and our Metals KJUS new Korea, up gear, at-once we popular standpoint, golf for against the scheduled Acushnet's the and early women goals. Thanks product game's to we satisfy this in FJ sheet seasonal in inspired momentum, to for of our brand need to lines. long-range the the And in our ability and to are the strong be launches company's market resilience balls Key for second launches work, Apparel Acushnet's a Acushnet, half complement and approach also support for our to to the and our by and chain clubs confident over dedicated heading allocation shoe development core healthy enthused Quantum, our Titleist strives China. FJ GT health half. compared into will the call balance include months execute we and Quantum brands franchise, down new coming In morning. Sean. Titleist maximum as production new are launch of the the year, inventory look for our Titleist is to FJ capital practices, balance demand the FJ in overall with Japan golf now KJUS we to our we the consistent product Classics I growth great and by men performance. of the which Golf successfully team and leverage past engagement Traditions

Sean Sullivan

Thank Good morning, you, David. everyone.

David had we a and start first As to half mentioned, solid strong XXXX. second quarter

quarter. Second million, million quarter second EBITDA net was adjusted sales last increased slightly from year's down $XXX and $X.X

strength adjusted Ball of compared growth half sales the first X%, by in segment, the year. XXXX, second driven Titleist to and Net X% with in quarter sales last our both EBITDA our expectations. line net was For in Golf up continued increased

sales cycle. for in of X% the a launches XXXX, to down was up Golf expected, the of Titleist of repositioning TSR Golf down million selling gear in QX of in to sales Clubs to at end segment X% of in Clubs given half. Geographically, FootJoy. golf in and first prices gross decline. Wear second the balls, were life Golf Rest $XXX due mix where favorable sales net year-over-year quarter product the average the sales the due higher As quarter compared all manufacturing in in higher was two-year volumes volumes Gross and lower net and primarily drove timing regions, million net $X the except golf costs FootJoy in product Titleist Titleist quarter sales their lower in Titleist product profit profit were World, within the the or up Metals

XX of million the XXXX, expenses expense IT-related the in the Second was million in an to $X to borrowings. quarter up expense XX.X% in quarter basis X% U.S. year. $XXX in increases gross or increase prior due was distribution of quarter higher mainly Interest up points $XX and in of margin expenses $X SG&A increased due million versus from million

up in last XX.X%, by rate tax effective our mix QX was in jurisdictional year, earnings. of a driven Our primarily shift XX.X% from

flow Moving highlights. to cash and our balance sheet

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

Our end average using net the debt at trailing was QX net of leverage X.Xx. ratio

of Our down all XXXX the first of product has the declined across from When fourth XX%. second decreases improved, significantly last were quarter, segments. having XX% of inventories with to our inventory XXXX XX% and comparing position quarter year's quarter from

the XXXX inventories of XXXX We given support launch. in are inventory the expect second position half back comfortable to our current demand introductions half the state VX increase product of in Pro with in of and

of million change to the million. quarterly shareholders cash $XX first shares Magnus to of deferred XX, offset from flow by open million. income $XX.X per capital. $XX.X half July expense, due XX equal we XXXX XX, September $XX approximately decrease based March X, purchased the XXXX, in X, net $XX $X.XXX to we to expect on our common a than a new Magnus, with million of XXXX, on were June, timing, now record shareholders tax $XXX stock working half with a the in Board of up half In rather and to a Directors declared entered million repurchases an purchase share dividends. of stock July aggregate First amount cash in XX, as CapEx primarily our to payable XXXX the million Today, And project December spend be XXXX, common of million year we roughly from for of $XX from in XXX,XXX June with on on our Capital into returned first operations purchase relation $XX on dividend cash XX, September XXXX. On agreement in an income decreased to and expenditures an full million. Through of aggregate XXXX. we to approximately of we market agreement share

approximately June to under share giving the remaining authorization. repurchase had XX XXXX, July of settlement, XX, the after current As million we effect $XXX

range half primarily to currency Turning are basis XXXX, of we sales to are compared adjusted outlook; $XXX year continued maintaining our on approximately net greater due net clubs million be net reported we launch full year end X.X% some and conditions our the are to sales full impacting headwinds revenue to GT Titleist third and gear as our Metals. second year second while EBITDA currency similar million. sales $XXX worth on of a as we market the sales our Titleist of our X.X% timing, With to $X.XX golf half impacting billion range approximately of full well revenue first the Providing year's our towards our around outlook to to golf that last as outlook, behind our range, basis, constant is we FootJoy the of expect currency experienced a up XXXX additional respect to segments. It than reported billion in lower new noting XXXX reaffirming $X.X trending to quarter we of context the XXXX, half, XX% and net strength $XX during of million. headwinds

We be with of Q&A. on to also our we the remain to and for over first adjusted beyond. With EBITDA. priorities greater EBITDA strategic performance expect third than quarter second focused adjusted executing XX% half are for now Sondra very that, I will pleased turn Overall, XXXX and our half call

Sondra Lennon

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

Operator

from Instructions] first Boss [Operator Our Matthew J.P. from Morgan. comes question today

Matthew Boss

Great.

maybe just up holds relates could half And year the more kick the the of to on embedded change near-term, your health just to golf of macro initial you maybe David, So channel volatile any acceleration or how as the view backdrop? metal more your typically ahead it feedback the industry, back off, during that excitement the it revenue in drivers back speak and half? in to growth supports launches in

David Maher

Maybe we aided outlined, rounds I rounds in percent as Matt. up healthiest -- couple U.S., I'll soft by some regionally our in of that to a increase, weather break out East. despite start. business, Yeah, the We're think, the

and there, of an So overall gear, clubs U.S. we out in inherent just balls healthy see called strength we the like what the profile and

stories, EMEA, than the As little we move into UK, bit continent. a really healthier two

single I so nicely to lost half in by a the rounds actually of cold start and tourism. would due real we're think down about no or slow UK a Again, poor I conditions. Rounds, is I spring digits. happens weather wet turn we pleased And play. there. said, they a high Japan, were that say had very aided so surprises Korea, with golf then

Korea, slightly, up down Japan -- think slightly. I up

with think When talk so, which is for Korea, sizable to about round soft. balls then we been expect premium for resilient. is And a That's been and remain correction we or a gears and focus year just Asia, healthy, about that participation apparel So near-term. clubs, there an particularly the really we that and happening, market. apparel continue on correcting and

in cautious we're So Asia.

a at regions. three resilience, a the see some theaters tailwinds some look you some with really, other So participation see you elsewhere with resilient main in and you regions, consumer, headwinds

cycles, sit over years Obviously, Korea in several So a like growth major talk consistent the growth and it's here -- in then is what last we about where with is. and about all of the consumer today growth certainly the we structurally, the U.S. rounds U.S. been to last is strongest our the positive. And looking we've across game rounds step-up the and to said in as And Matt, a we're consumer your real the for forward couple globe. question over that outlook; segments. clearly, see

I that. our product excitement apparel collections two-year out around called the exception footwear. us fueled ball. we're and think part GT. That's tours of out Really low the a and had and excitement single digits. lot But -- right, off you I nice in that by and success around start. early with of we some said confidence just nice across We've calendar, there's of called launches That's to golf that Pyramid you're gives down a drivers the

the in product fitting Now the put we just here do shipping in in marketplace. coming supplies We weeks. out that our earnest start

So X. around that will August start here really right

the new clubs, of about So how think continuing that's series. the enthused yes, of enthusiasm the balls back half -- benchmark we're and sort momentum around about we clubs GT And with year. and early the of response the of around the

Matthew Boss

to half promotional the Sean. of what for Maybe margin gross embedded for across maybe in marketplace in then And you've speak back Could just expectations the year? the for segments? Great. activity you one

Sean Sullivan

Sure, Matt.

we to take comments heard anyway, some probably So that just have point, the than saw promotional did you comments Club in had my in activity earlier my or little anticipated. last was our I we think a business in

the the margin in the that first in etcetera. outlook back product experienced that But don't half. I see seeing, really we're very mix, what absorbed we we've the the get So and to benefit pleased we'll the efficiencies, dissimilar half. QX, mix much that gross with in the back in Again, half manufacturing

call as gross profile. margin material nothing think back So to half about really we out the

Sondra Lennon

question, next please? Operator,

Operator

from question Our next Raymond Altobello James. Joseph comes from

Martin Mitela

I if This is pricing. wondering Martin sort you color seen on any for just can there's if ball down? on was of Joe. give any trade to Have you pushback anyone

David Maher

think half. business years, our in up at for ball of we XX-some-odd-percent I first the last were couple full up Martin, XXXX look the year and we X% over

continued urethane a we down, AVX. what say see VXx, interest like VX, we see. trade I Pro premium would in to conversely, Pro we our offerings, So

haven't seen few So a this been almost fact, products the way. down. the tend go certainly appetite in and necessarily years, last our There's consistent stronger demand years. urethane we And and other it for over that's trade the over see to, year, premium and

Martin Mitela

Appreciate Great. purchases? delaying is golfers sense club that there And it. any are

David Maher

purchases. would Well, our speak I club to

macro and steady half. for And but seeing into think, putters, ahead I in were in so nice the We're first of and up, launched stepping irons. half, we some lies every in a Korea the what we're successfully, growth drivers. our business, really out had enthused wedges about business. nice market, our the We Clubs

as a great seen indication healthy, seeing haven't be that's will And business our product nowadays. we that. So continue long experience great an we and our to deliver we're fitting of is view what can as and

Sondra Lennon

Martin. Operator, Thanks, please. question, next

Operator

Konik from comes Our next from Jefferies. Randy question

Randal Konik

years. other how that family maybe products TS product And about before us be going Maybe give on enthusiasm, GT and selling reception of family products. and product compared from the David, from family think Maybe some of to that give standpoint, you us series what you've in the perspective of some channels the it through that pricing changed just perspective to reads with different you're changes? marketing early as a on

David Maher

DP meaningful for do its Well, it's testing performance. with a construction. This really and TS allows It's And our few composite, differently construction flight to generational titanium ball really which been a only not and has prior to response that, to we're earlier before the with Early us. counts well. to World Amateurs a but -- I technology that on to player Series. and speaks Tour the as and the in in PGA of said titanium. is us professionals the the remarks, first Pyramid off, fairways and all drivers, my in is And It's win think change driver Tour a both model GT it early new powerful. And also I is drivers, things terrific. terms

one about got been enthused. the So we're fitting big plans They're the we the And enthused are a got enthused network ready. the fitters. equally has This for fitting of have. We've as tools works we're in We've about we long time. very long, as vast marketplace. products, a in

So the just prior GT. energy priced on there's and market is in the everything around this $XXX has increase driver. positive. point at we see the level a TSR $XXX.So And is good we've real price a again, to interest Pricing the was you'll -- this -- been done

that is readiness. look piece other supply we The chain our

new of always I construction it's risk. said, brings an As element a that

quite for Our on time. team has this been some

readiness good So demand. to capture season early about our feel we really

earnest X. So think XX. August days the we that, in in launch is fittings on -- again, start global early We August date started I

product its up It very some deliverables. and but They which head well days, early miss-hits about pick is enthused performance for club speed, this point, performs on very to the positive. players. a So up we're

positive. execute. again, are the all And yeah, to go to early now go time it's So indicators

Randal Konik

Helpful. question. I last guess

we more and a backdrop inventory do think levels. are perspective? we to cycle the think Just get on many around until promotional you we of pricing in from need in the of FootJoy, kind equilibrium this you where terms How quarters industry do world,

over give to some six the Just flavor see unfolding quarters? four on two us where things you to next

David Maher

flare Yeah. too, Randy. it regional And I'll give a

that we in be FootJoy, footwear inventory a total to I ago about market. quarter we're think where need a We in talked the So standpoint. from U.S.

quarter the U.S. Europe. due weather or where so exacerbated stands markets the two that And in We with probably comfortable ex-U.S. footwear and was in thought lagged some to we're a

entry. It's So comes we're lot said, of to tempting where away from for and the we probably quarters with inventory. barrier footwear a But brands it footwear that few that be. like market lot to low a has always seen been a of always with entry a a as getting global point

apparel And green we So XX% U.S. think it's grass in business. a bright are had up were Traditions, our year-to-date. Premiere mentioned in spots with. some some reality deal digits just There which great and up FootJoy some our Certainly, I with success we've double I the

our apparel. state, So negative come will I the thank and the as footwear you just the you world story so there other well and a are positive market There certainly I a U.S. some space. I'd Again, and see steady like positive FootJoy story super-premium just is bright also a positives. that within is it. issues. the say within we're But in margin somewhat drag product drag lines, spots some FootJoy. steady negative the unique, inventory -- would are early momentum Korea earlier as segment, apparel as and through to and -- working within dealing be a it market XXXX. we're see There's within some state. And biggest markets and we're normal it mentioned around within state it Probably with There's happening

Sondra Lennon

Operator, Thanks please? question Randy. next

Operator

Our Partners. comes from Capital question next from George Kelly ROTH

George Kelly

So of questions couple you. for a

over in go And be years. heard two in you prior the said half total. right third been you if XX% more think closer prepared your I had of First, well the to than I I back your the XX% -- in of remarks, XX%, expect years, last should it to couple if you quarter back

to an Pro and is year? broader next even the or VX just two launch even or early over of year -- I'm at [ split just kind you're launches of this it of curious the certainly just XX% ] due using kind more if So overly product years an a a last

Sean Sullivan

equal than -- not it's intended to to XX%. split. It's more an George, you Yes, guide definitely I

your to context it's being think maybe So on made cautious volatile we're the a currency in. given FX I broader more headwinds Again, historically. the we a market comment point, environment of in than have and bit

launch will just obviously, and about QX. XX% the So more in than in again, the VX in And we David of -- be Pro start GT ball that spoke you QX, prepare with XXXX product certainly, other know, the for to cadences, some business, as the launch. it's

much wouldn't I it. So read into

being think guide and I just little a a more on a little cautious we're more quarterly broad revenue with the basis.

George Kelly

Okay, Olympics? understood. historically expectations you guidance? of have the seen you. And there's your before? for What factoring question then respect on is to an draw into with -- second you there, And are lot how you know but that And not uplift have to history I a

David Maher

have Rio, COVID-related, was question Tokyo before, XXXX that seen was was the about in XXX or answer we the XXXX XXXX uplift was golf's years. was XXXX in to first terrific. new. an Well, That into right? entry Olympics

positive in new fans around new term, respects to game arrival term, the near-term. many that's very positive. year. of the would of weight in I long forward a calendar guidance. But the a a in that's We and what golf couple certainly the new we a was world of that in it over the right, regions put was the you it over big the think when so for throughout consumers happening expose it our are not Olympics. like This So lot into not golf's and of the after give we game, I'm terms the starts. means sure longest events it But

was thinking was I But a last it terrific George, So into said, don't agree would most think sort terrific years in near-term. anything incubation arrived couple the read over And of couple it's competition. the to terms your of how cycles. of a question, certainly about it in it that -- fans we're after of golf a

George Kelly

Where quick your share Okay. just And quarter? then one did one. count the end last

David Maher

million give of July, George. Thanks, stock. XX.X common the count, Share you of we a had different everyone. At roughly end I'll shares number,

appreciate and always, to the your in months' As forward up you a company, summer great of and we rest interest a have few hope in look time. following

Operator

call. That concludes today's

may your disconnect lines. now You

Acushnet (GOLF) 6 Aug 242024 Q2 Earnings call transcript