GOLF - Earnings call transcript Q3 2024

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Operator

Good morning, everyone, and welcome to today's Acushnet Company 3Q '24 Earnings Call. My name is Drew, and I'll be the moderator for today's call. [Operator Instructions] It's now my pleasure to hand over to Sondra Lennon, Vice President, FP&A and Investor Relations, to begin. Please go ahead.

Sondra Lennon

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

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

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

a of to Commission. Exchange our the press slides For list cause with factors actual and accompany differ, release, that results that presentation could filings Securities today's and our please see U.S. the

GAAP such adjusted as basis and schedules sales constant slides discussion, currency be this the Explanations these these we a EBITDA. directly can net our will Throughout to filings this and found items U.S. non-GAAP the release, items metrics we press with on and Securities the comparable how Exchange reference in of metrics that and today's in use Commission. most make the presentation to and of reconciliations why accompany financial including metrics, in

throughout referring to With call X-month period the And and and trends to as constant performance this that net sales this year-on-year business. comparable that, David. or X-month referring we to the our to measurement turn when are September results over I'll of XXXX. and XX, year-to-date ended increases in feel we Please period note basis, unless the also XXXX, comparisons, as context decreases the to references a on stated, are presentation currency otherwise best provides

David Maher

morning, good and Sondra, everyone. Thanks,

to Slide get interest I Acushnet your Company. will the right start X on As results. always, we appreciate and our in

X% This quarter, third up adjusted contributed to in the increase. XXXX. of growth a During third of year-over-year the of net $XXX million, quarter, million from quarter Acushnet EBITDA sales X% $XXX the delivered

coming compared the from And company pause with Titleist for this X%, Adjusted which sales of $XXX X% year. Balls months September, here and Gear. X surpassing of Clubs, were EBITDA thank to performance. net $X Golf first up fuels dedication, will to their up year-to-date teammates my Titleist growth I billion last Through was million

by the business down play. momentum, U.S. especially and X% net year-to-date. are our Ball VX growth the sales benefiting led Pro rounds at were Titleist of which X% segment. by Golf market, from increased quarter Looking This is has been in sustaining in up

trade expect sales we As be we as said we of on inventories January. in second in new preparation the down for half call, and last partners our to Golf Balls VX in lower the our modestly models Pro launch

positive, the fully anniversary very support of the feedback upcoming This we which tours. VX, has as XXth across been is to recently models debuted transitioned upcoming well launch. new will launch, mark production lines underway Player Pro Pro worldwide VX models have new we and to

on the segment Golf momentum. Since Titleist XX% increase and World and the GT tours and #X the to Ferry early PGA, its drivers healthy work Korn team DP new debut, has expectations the response driver Metals high Fairway GT as is great in did third quarter meeting Clubs market. bringing been fueling our posted consumer and a

led franchise. strong year by Year-to-date, especially our all an Titleist and with were in the wedge Clubs X% Golf growth U.S. and up regions in Japan for gains Vokey

will the where revenues decline, strengthening you apparel executed state-of-the-art down primarily in and soft to soon travel related see our up has in sales year-to-date. to complete was to Glove during in FJ across off make chain full the FootJoy, And good regions. FJ in facility also continues team X% has been volumes footwear of and progress of a and Vietnam. to our most the inclusion what footwear lines market in production a X% third the the were XXXX. in diversifying new now well and year-to-date, higher Gear X% X% footwear transition The quarter quarter with Club supply and Despite

our move JV We to that confident with and production enhanced partner market. work facilitate and time, over will to are long-standing continue speed innovation this

is net QX products timing a sales late from to in and of lastly, XXXX to This segment not were QX the in quarter which year-to-date. shipments, moved the shoe to of this early And year. allocated down reportable third related QX shortfall partly

weather, QX and overview continues benefit X% where region, you brief participation X% U.S. from consumer with coming year-to-date pace the the from start Despite by slow are to net with record play of a see XXXX. a for growth U.S. all year-to-date now with market in up up set Now and sales level keeping poor segments. resilient rounds X% demand healthy due to and up

Korea of a During by partially EMEA. offset decline the were quarter, up, Japan, and Rest World in

digits, while Again, while and we Japan. and in During ball EMEA resilient. the the slight declined a more Golf World businesses contributors the months, declines, of first have softness these Clubs X posted single to and Korea, our footwear apparel low markets increase been been Rest in main have

U.S. projected year-to-date, be down. to the off regions are other with X% and slightly outside Korea Rounds up

momentum owned and holiday our for Looking premium and build and retail, Golf to our into QX, are the XXXX. Clubs positions, we heading comfortable at to inventory and with in Balls, footwear look season FJ upon both

And value. drive the to efforts the in excellence to of the and the service commitment resilience product pillars to great of game's enduring consumer, deliver and company's partners core experiences golfers dedicated we shareholder company's and as and turn, and point attractiveness to golfer trade Acushnet's

These to will of to and for this attention foundation investment proven approach your capital strong Acushnet's priorities, now disciplined morning. sheet thesis. the the remain call the I Thanks balance over along allocation, pass company's with Sean.

Sean Sullivan

morning, Good David. you, Thank everyone.

and X% Clubs. primarily of we Adjusted quarter, third increased period the net year-to-date mentioned, third sales $XXX higher a sales million in Golf $X.X Titleist David As up driven same In solid in EBITDA million. performance. had quarter net great over the XXXX, by was

driven XXXX, of adjusted X.X% X.X%, and and successful X quarter by sales the The GT Titleist first Fairway and drivers increased our Golf EBITDA sales increase net in the respectively. launch was Club XX% Metals. net in months the For of

Titleist up to quarter, Balls sales Golf year. was also the due models. the in to compared quarter, last in primarily down Golf of our were Titleist almost volumes Gear lower X% X% performance

FootJoy to was Titleist down to categories. across volumes in million quarter, X% profit Gear higher lower on $XXX higher quarter up selling of and million was primarily sales sales primarily prices average in X% volumes in and $XX due and Golf the Gross compared XXXX, or Clubs Golf apparel. FootJoy in the footwear all third

was XXX basis versus volumes sales in Golf prior of a mix XX.X% Third due to year, points Titleist and largely margin up quarter gross product higher favorable Clubs.

million ball and or and from SG&A in in expenses expense advertising to club fitting XXXX, mainly GT related quarter increases launch metals and increased of the $XXX golf in supporting higher due of administration the and to quarter. promotional the initiatives our XX% expenses, employee-related and $XX mainly to drivers million support the

of in borrowings. the due up $XX million expense million quarter in $X to was Interest an increase

Our our year's by quarter, XX.X% effective earnings. third QX mix compared in jurisdictional last XX.X% to in as tax of changes primarily driven was rate in

of to rate year-to-date full expect the rate XX.X%. annual to in tax year, effective with line be we Looking our our

and flow our highlights. balance cash Moving sheet to

we into and shareholders. in prioritize returning the As sheet XXXX, continue ongoing to balance business flow strong, and we head to capital and our investments are cash positions

the was QX end in from average ratio X.Xx, leverage down Our net the of quarter. sequentially trailing at X.Xx using net second debt

respectively. position and inventory and declined last X% third year's Our having to year-end has quarter, improved, XXXX significantly XX% when comparing

year-end our position with well as comfortable increase XXXX at state are We Pro expect inventory and the the launches. given of to the club Pro VX launch and primarily demand support inventories XXXX VXx to current as

were of primarily income decreased approximately due and expense CapEx be to first still Year-to-date to X X months first changes million. $XX million the of income and through in as $XX months working cash expect well flow deferred full decreases net XXXX, the Capital XXXX, from capital. as year spend we tax operations from in expenditures

million $XXX our Directors of Board dividend quarterly XX with returned December $XX per dividends. we a to X, of million September, cash declared Today, XXXX. record of on Through share December shareholders on payable repurchases million to and in roughly share $XXX $X.XXX in cash shareholders

During Magnus the aggregate amount disclosed million of an XXXX share March were shares purchase $XX.X from X.X our repurchased in $XX for this shares Included repurchased agreement. for million. million quarter, in previously we relation with

As including authorization, XX, remaining $XXX.X XXXX, million $XX.X million had June XXXX repurchase of the September current we agreement. under share to share purchase related the

full outlook. Turning to year our XXXX

adjusted our billion are to range million of $XXX respect to on narrowing EBITDA to a We outlook, we XXXX net million. $X.X basis. $X.XX billion sales range $XXX our to reported reaffirming a are With

sales reported range. impacts to we discussed of to towards still to of our our be on range due the constant end midpoint we call, As and the expect in sales currency quarter lower X.X% FX to the closer X.X% part second

fourth incorporates at cycle. except the When quarter, product outlook segments last growth in our life Golf which quarter the expected is looking of in Balls, all year-over-year our X-year sales

as year's adjusted upon investments improvement, this incremental XXXX. to which look year-over-year EBITDA We expect and fourth SG&A includes quarter we also across into R&D momentum build heading

charge of Also the just in full highlighted. as in early our incurring we a restructuring the to to supply related XXXX, transition Vietnam anticipate quarter, footwear fourth David chain

years, reported one Lastly, will as to Clubs Clubs operating business. Golf are XX-K and combine in into Golf and In and Golf Equipment new which our have expect recent with reflects converged XXXX structure a managing the Golf strategic this reporting Golf Balls best that and Balls we Titleist economic standpoint, filing, now viewing way beginning Golf Equipment. Titleist be believe we from increasingly and the segment we

FootJoy the our and and strong really over strategic as focused closing, and with on finishing our year-to-date continuing reportable Golf beyond. call execute for to to Wear With year Sondra for on Gear remains Q&A. the In the remain performance, Golf that, will priorities turn now and XXXX I team segments. will pleased

Sondra Lennon

open Sean. Operator, could you, line please we questions? for the Thank

Operator

First JPMorgan. Instructions] comes Boss Matthew from question today [Operator from

Matthew Boss

current So maybe as you to just international? in U.S. and callouts relative notable trends about David, And geographies engagement could seeing you're across on the landscape? think market the any if participation that we elaborate

David Maher

in Yes. really in up industry the Matt, the we're Southeast, -- regions the country, of pleased of the slow Southeast. versus primarily the at U.S., noted, as And of February, the a just start with part is with X% exception -- see you really the in the early sort play and January of pleased of in all so After year-to-date. slow year. rounds a again, the about look start the up map as you

of couple in of some here the of joined positive of at sit what's the indicator with the trend record I have 'XX is 'XX, and and both to of pace on the happening benefit So think, the that with in new today last years. dedicated rounds game and golf, really look a golfers golfers

we market, around down Korea As about said we September, of X%, rounds the very are maybe of bit down a we bit globe, and and around think But world. up Matt, holding U.S. move rounds we've through consistently little the U.S. the slightly, project macroeconomic, little we're by weather, than seeing large, A well. stronger consumer up others modestly.

a XX%. major XX-plus markets, U.S., always weather. as think There's sort rounds up due be worldwide X top today are I XXXX would and we versus up And Korea, to be XX% about up going Japan to the of where percent. a in variability my markets, about baseline,

first Matt, always game we're the And have where with and X really we're confident quarters. weather good to place. ups are net-net, downs. structurally, we But in through So a is going

Matthew Boss

a just Great. Sean. maybe And for then follow-up

As quarter landscape we on the think the any channel terms gross best today? margin, and of think puts to inventory And in fourth about promotional how margin? and in about takes gross the just

Sean Sullivan

Yes.

the take I'll first So one.

positive trend QX. think in the I you gross margin, saw

on club QX, last in price efficiency. given half. I But ended where of spoke call helped both and that the margin first performance That the the statement holds think gross the drive. true. really half I the again, still it's approximating back and about we volume Obviously, business

with that. So very pleased

In the turn terms it promotional of David. environment over to I'll and inventory,

David Maher

Matt. weigh in, I'll Yes,

clubs, I would steady from and normal. an standpoint, equipment state, balls say So

do. to see the at always which going promotional You're holidays, activity some we

characterize would normal. I that again, as So

clubs, just so of because tend isolated a I've we resilient what we bit custom-fit. or said to this before, little be do much is

If I continued there net-net, position. put about footwear. watch normalized balls some and the would equipment clubs all out, it's year a So in we've is had discussion steady state

has been, expect would over to some activity the holidays. better than it promotional see While I

is custom footwear. we again, swings out what much range I within would landscape many see healthiest as balls, apparel a Apparel, because of within of so do But simply the normal, characterize in the and don't we too maybe embroidered. clubs, watch overall

Operator

Instructions] [Operator

David Maher

calendar. their Q&A time back Short a today. everybody. Everybody Thanks, little on Okay. gets

As appreciate to your in getting again. and X always, time. we together interest again months' look forward Thanks

Operator

Company Acushnet today's call. concludes That

now may disconnect line. your You

Acushnet (GOLF) 7 Nov 242024 Q3 Earnings call transcript