- Titleist’s parent company sales are a 5 percent increase over 2022
- Net profit for the year is down slightly, to $198.4 million
- Growth paced by double-digit growth in golf ball sales
- Titleist golf club sales are up 8 percent
The Acushnet 2023 Sales and Financial report tells us some fascinating things about how golf’s No. 2 company stacks up against the runaway sales leader, Topgolf Callaway.
Perhaps the biggest takeaway is that, depending on how you keep score, Acushnet may not be golf’s No. 2 company.
Because depending on how you keep score, Acushnet could be considered golf’s No. 1 company.
It all depends on which set of topline numbers you look at and which set of bottom-line numbers you look at. Bigger may not always be better, but it’s always bigger.
If that sounds squirrelly to you, you’re not alone. But before we dig into this all, let’s pause one moment for our traditional sales report disclaimer:
We are not nor do we claim to be financial experts, investment counselors or Wall Street-level business analysts. We’re simply golf industry geeks who like to read.
Okay, with that out of the way, let’s dive in.
Acushnet 2023 Sales and Financial Report
Acushnet is reporting full-year sales for 2023 totaling $2.5 billion. That’s a five percent increase over 2022 sales. In terms of constant currency, it represents a 6.2 percent increase. Global companies based in the U.S. use constant currency to reflect fluctuations in international monetary exchange rates. When the dollar is strong abroad, it’s great for tourists, but it can negatively reflect sales trends overseas.
The Acushnet 2023 sales report also shows a $198.4 million profit, which is down slightly (less than $1 million) compared to 2022. However, Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is up by 11 percent over 2023, to $376 million. Corporations use EBITDA as an indicator of their efficiency as a sales and marketing organization and to reflect their relative strength in the marketplace. It quantifies how much money sales and marketing are bringing into the organization before the finance department does its thing.
“Titleist golf balls posted healthy sales gains, led by the successful Pro V1 and Pro V1x launch, while Titleist golf club growth was driven by new T-Series irons and expanded club fitting capabilities,” Acushnet CEO David Maher told investors yesterday. “Titleist golf gear grew in all categories and our performance apparel business was led by FootJoy apparel, which posted a double-digit increase over 2022.
No. 1 in Golf?
As we reported a couple of weeks ago, Topgolf Callaway posted 2023 sales north of $4.28 billion. Acushnet’s net sales are $2.4 billion.
That would be less.
So how could Acushnet be viewed as the No. 1 company in golf? As we mentioned, it depends on how you keep score.
Remember that Topgolf contributed $1.76 billion to Topgolf Callaway’s total, while the Active Lifestyle business unit contributed $1.13 billion. If you count only balls and clubs, Topgolf Callaway sales hit $1.39 billion.
If you only county Acushnet’s ball and club sales, you get $1.4 billion.
That would be more.
Of course, that’s like saying the Red Sox beat the Blue Jays 8-3, but the Blue Jays are winners too because they had more hits. But the difference does illustrate the difference between the two companies. Topgolf Callaway is a diverse golf lifestyle brand with each of its three business units topping $1 billion in sales.
Acushnet, on the other hand, considers itself a golf company that sells golf balls, golf clubs and other stuff you need to play golf with.
Acushnet 2023 Sales Report: Segment Specifics and Other Tidbits
Globally, Titleist golf ball sales were up over 12 percent in 2023 (13.5 percent in Constant Currency). The company reports that the increase was driven by volume increases and higher average prices driven by the new Pro V1 launch.
In his presentation, Maher said Titlist is far and away the number one ball on the PGA TOUR, with 73 percent of the players teeing up a Pro V1. Also, 88 percent of the men and 90 percent of the women at the 2023 D1 NCAA championships gamed Titleist golf balls.
Titleist club sales were up eight percent (9.5 percent in Constant Currency), with the new T-Series irons and Scotty Cameron Super Select putters pacing the growth. Golf Gear (hats, gloves, bags, etc) sales jumped 5.5 percent (seven percent in Constant Currency) with higher volumes in all categories except gloves.
FootJoy remains a head scratcher. FootJoy apparel did enoy a double-digit percentage sales increase. But that was offset by decreases in everything else, particularly footwear. Specifically, an excess of inventory in the market slowed sales of new products for the year, causing FootJoy brand sales to drop 3.5 percent.
The Q4/Q1 Conundrum
Every golf company posts losses in Q4 every year, and Acushnet was no different. The company posted net sales of $413 million in Q4, down nearly eight percent from the year before. Despite the new T-Series launch, club sales were down for the quarter. That’s due to a drop in TSR driver and metal wood sales, which entered the second year in market.
For the quarter, Acushnet posted a $26.8 million loss. That’s up very slightly from the loss it posted in Q4 of 2022.
Every year public traded companies offer investors guidance on how the company expects to perform in the coming year. Acushnet is projecting 2024 sales to reach $2.45 to $2.5 billion. That represents a three- to five-percent increase on a Constant Currency basis. While that sounds conservative, that’s par for the course for Acushnet.
However, in its presentation to investors the company said it expects to encounter some headwinds in Q1. While Titleist launched new balls and new Vokey wedges to jump-start sales in Q1, the company is expecting higher operating costs relating to investments in several new initiatives. The company says its growth is heavily weighted toward Q2 performance.
Some of those new initiatives you won’t see include improved B2B and DTC system integration. There’s also a new 500,000-square-foot distribution center in Lakeville, MA. You will see a new ball fitting and wedge fitting apps, a new FootJoy shoe fitting app called FitLab. There’s also an improved golf ball customization system.
Looking Ahead
Acushnet’s less-than-thrilling Q1 outlook caused its stock price to drop nearly seven percent yesterday. It opened at $69.16 and closed at $64.42. However, just one year ago Acushnet stock stood at $52.64 and dipped as low as $43.16 in May. Going back five years, the stock price has almost tripled.
Maher, as any good CEO should do, remained bullish on 2024.
“The golf industry is healthy, and we are encouraged by the sport’s energy and appeal, with participation vibrant across all regions,” he told investors. “Global rounds of play…were up about two percent led by the U.S. market which increased four percent to more than 530 million rounds.”
Against that backdrop, you may wonder why Acushnet is only projecting three to five percent Constant Currency growth in 2024. But it’s important to remember that’s still an awful lot of golf balls.
Acushnet is also diversifying, but in its own golf-specific way. The company says it will fully integrate the Club Glove brand into the Titleist Golf Gear category this year. Acushnet acquired Club Glove in February of 2023. The company expects Club Glove to boost Gear sales, although it will cannibalize sales from Titleist travel products.
So yes, Acushnet does remain a distance No. 2 behind Topgolf Callaway in total sales. But also yes, Acushnet does remain a profitable, golf-centric company that’s playing its own game.
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