Core Viewpoint - The article summarizes significant analyst rating changes that are expected to impact the market, highlighting upgrades, downgrades, and new coverage ratings for various companies [1][6]. Upgraded Ratings - Merril Lynch upgraded Darden Restaurants (DRI) from "Hold" to "Buy," raising the target price from $240 to $265, citing a value-driven operational strategy leading to stable customer traffic and market share growth [5]. - Mizuho Securities upgraded Procter & Gamble (PG) from "Neutral" to "Outperform," increasing the target price from $157 to $165, indicating potential for accelerated organic sales growth and improved profit margins [5]. - Royal Bank of Canada’s Cowen upgraded Fortinet (FTNT) from "Hold" to "Buy," maintaining a target price of $100, based on stable operational expectations for FY2026 [5]. - Deutsche Bank upgraded Applied Materials (AMAT) from "Hold" to "Buy," significantly raising the target price from $275 to $390, reflecting a favorable outlook for the wafer fabrication equipment industry in 2026-2027 [5]. - JPMorgan upgraded Acushnet Holdings (GOLF) from "Underweight" to "Neutral," increasing the target price from $74 to $96, due to a diversified product portfolio and pricing power [5]. Downgraded Ratings - Citizens Bank downgraded Trade Desk (TTD) from "Outperform" to "Market Perform," without providing a target price, citing increasing market competition and limited short-term catalysts for stock price appreciation [10]. - Deutsche Bank downgraded Sherwin-Williams (SHW) from "Buy" to "Hold," lowering the target price from $390 to $380, indicating potential downward pressure on valuation multiples until earnings growth can be proven [10]. - Jefferies downgraded Li Auto (LI) from "Buy" to "Hold," significantly reducing the target price from $28.80 to $17.50, due to intensified competition in the home SUV segment [10]. - Harbor Research downgraded Cleveland-Cliffs (CLF) from "Buy" to "Neutral," acknowledging improved fundamentals but noting that the current stock price reflects normalized earnings levels [10]. - JPMorgan downgraded Southern Copper (SCCO) from "Neutral" to "Underweight," slightly adjusting the target price from $119.50 to $117.50, indicating limited upside potential based on current copper spot prices [10]. New Coverage Ratings - Citigroup initiated coverage on Elf Beauty (ELF) with a "Buy" rating and a target price of $110, highlighting market share growth and potential from the acquisition of skincare brand Rhode [12]. - Freedom Capital initiated coverage on Hinge Health (HNGE) with a "Buy" rating and a target price of $59, forecasting a 23% revenue growth and an industry-leading profit margin of 82%-83% [12]. - Susquehanna Group initiated coverage on HEICO Corporation (HEI) with a "Neutral" rating and a target price of $385, projecting an 8% revenue CAGR and a 13% free cash flow CAGR from FY2026 to FY2028, while noting a significant valuation premium [12]. - Cantor Fitzgerald initiated coverage on Quanta Services (PWR) with an "Outperform" rating and a target price of $520, citing a multi-year investment cycle driven by modernization and electrification trends [12]. - Texas Capital initiated coverage on MGM China (MLCO) with a "Buy" rating and a target price of $11.50, emphasizing its unique non-gaming business model and alignment with Macau's tourism recovery [12].

Core Insights - The Zacks Leisure and Recreation Products industry is experiencing growth due to increased health and fitness awareness, leading to solid demand for fitness products and outdoor recreation items [1][5]. Industry Overview - The industry includes companies that provide a range of recreational products and services, such as amusement products, swimming pools, marine products, and outdoor equipment. Economic growth, a healthy labor market, and rising disposable income drive consumer demand [2]. Trends Influencing the Industry - The U.S. golf business is in a growth cycle, with increased participation and engagement across various age groups. Off-course experiences are attracting younger consumers, broadening the sport's appeal [3]. - Higher play frequency among golfers is leading to increased demand for upgraded equipment, while innovations in fitting and data analytics are enhancing spending per participant [4]. - There is robust demand for fitness-related products, with consumers investing in home workout equipment and digital fitness platforms, driven by a focus on personal well-being [5]. - Technology is redefining engagement in the industry, with smart fitness equipment and app-enabled products enhancing customer experiences and extending lifetime value [6]. Industry Performance - The Zacks Leisure and Recreation Products industry holds a Zacks Industry Rank of 110, placing it in the top 45% of over 244 Zacks industries, indicating positive near-term prospects [7][8]. - Despite the positive outlook, the industry has underperformed the S&P 500, with a collective decline of 2.2% over the past year compared to the S&P 500's rise of 18.3% [10]. Valuation Metrics - The industry trades at a forward price-to-earnings ratio of 21.4X, which is lower than the S&P 500's 23.11X and the sector's 18.45X. The industry has seen a range from 13.25X to 37.40X over the past five years, with a median of 20.67X [13]. Notable Companies - **Topgolf Callaway**: The company has seen a resurgence in traffic and sales, particularly in its core customer segment, with a Zacks Rank of 1 (Strong Buy) [14]. The stock has increased by 48.9% in the past six months [15]. - **Amer Sports**: Benefiting from strong demand for premium brands, particularly in footwear, with a Zacks Rank of 2 (Buy). The company expects a 22% year-over-year growth in earnings per share [19][20]. - **Acushnet Holdings**: Strong global golf participation and demand for Titleist products are driving growth, with a projected 7.1% increase in earnings for 2026 [23][24]. - **Pool Corporation**: Expected to benefit from steady maintenance demand and digital enhancements, with a forecasted 6.6% increase in earnings for 2026 [27][28].

Core Viewpoint - Acushnet Holdings Corp. announced a $500 million offering of senior notes to refinance existing debt and improve financial flexibility [1] Group 1: Financial Details - The offering consists of $500,000,000 in aggregate principal amount of senior notes [1] - Proceeds will be used to redeem all $350,000,000 of the Issuer's outstanding 7.375% Senior Notes due 2028 [1] - The remaining proceeds will be allocated to repay a portion of the amount outstanding under the Issuer's credit facilities [1]

Financial Performance - Net sales for Q3 2025 reached $657.7 million, a 6.0% increase from $620.5 million in Q3 2024[20] - Gross profit for Q3 2025 was $319.1 million, compared to $304.2 million in Q3 2024, reflecting a gross margin improvement[20] - Net income attributable to Acushnet Holdings Corp. for Q3 2025 was $48.5 million, down from $56.2 million in Q3 2024, resulting in a diluted earnings per share of $0.81[20] - Comprehensive income attributable to Acushnet Holdings Corp. for Q3 2025 was $50,087,000, down from $71,163,000 in Q3 2024, reflecting a decline of 29.6%[23] - Net income for Q3 2025 was $48,031,000, a decrease of 12.5% compared to $55,275,000 in Q3 2024[23] - Cash flows provided by operating activities for the nine months ended September 30, 2025, were $194,708,000, compared to $246,228,000 for the same period in 2024, a decrease of 21%[26] - The company reported a net income of $222,135,000 for the nine months ended September 30, 2025, an increase of 5.4% from $209,998,000 in the same period of 2024[26] - Net income for the nine months ended September 30, 2025, was $223.3 million, compared to $215.4 million for the same period in 2024, reflecting a year-over-year increase of approximately 3.9%[31] Assets and Liabilities - Total assets increased to $2.35 billion as of September 30, 2025, up from $2.18 billion at the end of 2024[18] - Current liabilities decreased slightly to $461.0 million from $472.7 million at the end of 2024[18] - Long-term debt increased to $878.3 million as of September 30, 2025, compared to $753.1 million at the end of 2024, indicating potential leverage for growth initiatives[18] - The total shareholders' equity as of September 30, 2025, was $852,275,000, compared to $898,602,000 as of September 30, 2024[28] - As of September 30, 2025, total shareholders' equity was $852.3 million, a decrease from $898.6 million as of December 31, 2024[31] Expenses - Research and development expenses for the nine months ended September 30, 2025, were $56.4 million, compared to $51.5 million for the same period in 2024, indicating a focus on innovation[20] - Advertising and promotion expenses increased to $61.4 million for the three months ended September 30, 2025, compared to $57.2 million in 2024, marking a 7.4% increase[105][106] - The net periodic benefit cost for pension benefits increased to $3,702,000 for the three months ended September 30, 2025, compared to $2,360,000 for the same period in 2024, representing an increase of approximately 56.8%[77] - The company reported restructuring costs of $2.8 million for the three months ended September 30, 2025, compared to $0.4 million in 2024[105][106] Cash and Investments - Cash, cash equivalents, and restricted cash at the end of Q3 2025 were $89,481,000, a decrease from $99,062,000 at the end of Q3 2024[26] - The company declared dividends totaling $43.3 million for the nine months ended September 30, 2025[31] - The Company had $264.7 million remaining under the current share repurchase authorization as of September 30, 2025[86] Market and Economic Conditions - The company anticipates continued challenges in consumer spending and macroeconomic factors affecting golf participation rates[11] - Acushnet Holdings Corp. is focused on expanding its presence in international markets while managing risks associated with global operations[15] - The company is exposed to commodity price risks for materials such as polybutadiene and titanium, which may impact operating results[204] - Inflation in raw materials and input costs has historically affected the company's financial performance and may continue to do so in the future[205] Share Repurchase and Stock Options - As of September 30, 2025, the company had authorized a share repurchase program of up to $1.25 billion since its establishment in 2018[82] - The Company repurchased a total of 2,842,719 shares of common stock with an aggregate value of $187.5 million[86] - The average repurchase price for shares repurchased from the open market was $65.96, while the average price for shares repurchased from Magnus was $66.17[86] - The Amended and Restated 2015 Omnibus Incentive Plan was approved, increasing the number of shares available for grant by 1,266,000 shares and extending the term through June 2, 2035[89] Foreign Exchange and Derivatives - The gross U.S. dollar equivalent notional amount of foreign exchange forward contracts was $218.1 million as of September 30, 2025, up from $192.2 million as of December 31, 2024[64] - The company expects to reclassify a net loss of $2.3 million related to foreign exchange derivative instruments from accumulated other comprehensive loss into cost of goods sold within the next 12 months[66] - The fair value of foreign exchange derivative instruments as of September 30, 2025, was $1,307,000, while liabilities for the same instruments were $2,842,000[70] Segment Performance - Segment operating income for Titleist Golf Equipment was $83.7 million for the three months ended September 30, 2025, compared to $81.1 million in 2024, reflecting a 3.2% increase[105][106] - Total net sales for the nine months ended September 30, 2025, were $2.08 billion, a 3.4% increase from $2.01 billion in 2024[107][109] - The United States market generated $397.0 million in sales for the three months ended September 30, 2025, compared to $374.2 million in 2024, reflecting a 6.0% growth[111]

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Financial Data and Key Metrics Changes - Acushnet reported worldwide net sales of $658 million for Q3 2025, a 5% constant currency increase year-over-year, with adjusted EBITDA of $119 million, growing by 10% [5][10] - Year-to-date sales reached $2.08 billion, up 4%, while adjusted EBITDA increased by 2% to $401 million compared to the previous year [5][10] - Gross profit for Q3 was $319 million, up $15 million from 2024, driven by higher average selling prices and sales volumes [10][11] - Q3 gross margin was 48.5%, down 50 basis points year-over-year, primarily due to higher tariff costs [11][12] Business Line Data and Key Metrics Changes - Titleist golf equipment grew by 5% in both the quarter and year-to-date, driven by the Pro V1 franchise and successful launches of new products [6][9] - The golf gear segment posted a strong quarter with a 13% gain, and is up 8% year-to-date, particularly benefiting from travel brands [6][9] - FootJoy revenues increased by 3%, supported by successful footwear models and steady glove growth [7][8] Market Data and Key Metrics Changes - The U.S. market grew by 6%, with all segments contributing to the growth, particularly Titleist golf equipment [9] - EMEA experienced a 14% gain in Q3 and is up 8% year-to-date, benefiting from favorable weather conditions [9] - Korea saw a 3% increase in Q3, while Japan experienced a decline of 13% in the quarter and 7% year-to-date [9] Company Strategy and Development Direction - Acushnet is focused on exceeding golfer expectations, enhancing product quality, and executing fitting initiatives [4][5] - The company is committed to capital allocation strategies that drive long-term growth and shareholder value [5][12] - Investments in product development and manufacturing capabilities are seen as key drivers of current growth and momentum [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the health of the consumer and the overall golf market, expecting worldwide rounds of play in 2025 to match or exceed 2024's record [3][4] - The company anticipates low single-digit growth in the second half of 2025, with full-year revenue projected between $2.52 billion and $2.54 billion [15][16] - Incremental full-year gross tariff costs are expected to be $30 million, with efforts to mitigate a significant portion of this impact [16] Other Important Information - The company returned approximately $230 million to shareholders year-to-date, including $188 million in share repurchases and $42 million in dividends [13] - The board declared a quarterly cash dividend of $0.235 per share, payable on December 19, 2025 [13] Q&A Session Summary Question: U.S. sales breakdown between volume and price - Management noted that U.S. sales growth is driven by volume gains in the ball business, with no price increases taken in 2025 [18][19] Question: Tariff impact for 2026 - The expected full impact for 2026 is projected to be just over $70 million, with mitigation efforts in place [22][24] Question: Health of overall golf participation and product reception - Management reported strong engagement in golf participation globally, with positive reception for Pro V1 and T-Series irons [26][27] Question: Sell-through trends at retail - Sell-through for Titleist golf balls has been strong, with favorable inventory levels indicating a positive sales environment [34][35] Question: Changes in retail partner ordering habits - Channel inventories are in line with expectations, with no unusual concerns noted [41][42] Question: Growth dynamics in Europe - The growth in Europe is attributed to healthy rounds of play and effective execution by the team, with fitting initiatives contributing positively [51][52]

Third Quarter 2025 Earnings Call November 5, 2025 NON-GAAP FINANCIAL MEASURES DISCLAIMERS This presentation includes certain financial measures not presented in accordance with generally accepted accounting principles ("GAAP") such as Adjusted EBITDA, Adjusted EBITDA margin, net leverage ratio and net sales in constant currency. These non-GAAP financial measures are not measures of financial performance derived in accordance with GAAP and may exclude items that are significant to understanding and assessing ...

Core Insights - Acushnet reported quarterly earnings of $0.81 per share, missing the Zacks Consensus Estimate of $0.85 per share, and down from $0.89 per share a year ago, representing an earnings surprise of -4.71% [1] - The company posted revenues of $657.66 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 3.78% and up from $620.5 million year-over-year [2] - Acushnet shares have increased approximately 5.9% year-to-date, compared to a 15.1% gain in the S&P 500 [3] Earnings Performance - Over the last four quarters, Acushnet has surpassed consensus EPS estimates two times [2] - The company had a previous earnings expectation of $1.33 per share, but reported $1.25, resulting in a surprise of -6.02% [1] Future Outlook - The company's earnings outlook will be crucial for stock performance, with current consensus EPS estimates at -$0.23 for the upcoming quarter and $3.47 for the current fiscal year [7] - The Zacks Rank for Acushnet is currently 2 (Buy), indicating expectations for the stock to outperform the market in the near future [6] Industry Context - The Leisure and Recreation Products industry, to which Acushnet belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Acushnet's stock performance [5]

Financial Performance - Third quarter net sales reached $657.7 million, a 6.0% increase year over year, and a 5.3% increase in constant currency[6] - Year-to-date net sales totaled $2,081.5 million, up 3.5% year over year, and up 3.6% in constant currency[13] - Third quarter net income attributable to Acushnet Holdings Corp. was $48.5 million, down 13.7% year over year[6] - Year-to-date net income attributable to Acushnet Holdings Corp. improved to $223.4 million, a 3.7% increase year over year[19] - Adjusted EBITDA for the third quarter was $118.6 million, reflecting a 10.4% increase year over year[12] - Full-year 2025 revenue outlook updated to $2,520 to $2,540 million, with expected constant currency growth of 2.6% to 3.4%[22] - Full-year 2025 Adjusted EBITDA guidance set at approximately $405 to $415 million[22] Sales Breakdown - Net sales in the United States increased by $44.4 million for Titleist golf equipment and $10.2 million for Golf gear year-to-date[14] - Net sales in regions outside the United States increased by 1.8%, or 2.3% on a constant currency basis, driven by EMEA and Rest of World[15] - Golf balls segment sales increased to $202.4 million, up $11.8 million or 6.2% year-over-year[35] - The United States generated $397.0 million in sales, reflecting a $22.8 million increase or 6.1% from the previous year[36] - Golf gear sales for the nine months increased by $14.6 million or 7.5%, totaling $208.8 million[37] - EMEA region sales grew by $29.7 million or 11.3%, reaching $293.6 million for the nine months[38] - FootJoy golf wear sales decreased by $9.3 million or 1.9%, totaling $467.9 million for the nine months[37] - Japan experienced a decline in sales of $6.4 million or 5.9%, totaling $102.3 million for the nine months[38] Assets and Liabilities - Total assets increased to $2.35 billion as of September 30, 2025, compared to $2.18 billion at the end of 2024, marking a growth of 7.9%[32] - Cash and cash equivalents rose to $89.5 million at the end of Q3 2025, up from $53.1 million at the end of 2024[34] - Long-term debt increased to $878.3 million as of September 30, 2025, compared to $753.1 million at the end of 2024[32] Operating Expenses - Operating expenses for the nine months ended September 30, 2025, totaled $683.6 million, an increase from $660.0 million in the same period of 2024[31] - Research and development expenses for Q3 2025 were $18.6 million, slightly down from $18.9 million in Q3 2024[31] Shareholder Actions - The company repurchased 2,842,719 shares of common stock for an aggregate of $187.5 million during the nine months ended September 30, 2025[21] Future Outlook - Acushnet Holdings Corp. plans to continue expanding its presence in international markets and investing in new product development[28] Cash Flow - The company reported a net increase in cash of $36.4 million for the nine months ended September 30, 2025[34] Quarterly Highlights - In Q3 2025, total net sales reached $657.7 million, an increase of $37.2 million or 6.0% compared to Q3 2024[36] - Adjusted EBITDA for Q3 2025 was $118.6 million, compared to $107.4 million in Q3 2024, resulting in an Adjusted EBITDA margin of 18.0%[46] - For the nine months ended September 30, 2025, total net sales were $2,081.5 million, a $69.6 million increase or 3.5% from the same period in 2024[38] Non-GAAP Measures - The company utilizes non-GAAP measures such as Adjusted EBITDA to assess ongoing operating performance, excluding certain nonrecurring items[39]

Core Insights - The Zacks Leisure and Recreation Products industry is experiencing growth due to increased health and fitness awareness, leading to solid demand for fitness products and outdoor recreation items [1][4]. Industry Overview - The industry includes companies that provide a range of recreational products and services, such as amusement products, swimming pools, marine products, and outdoor equipment [2]. - Economic growth is a key driver for the industry, with consumer demand influenced by a healthy labor market, rising wages, and increasing disposable income [2]. Trends Impacting the Industry - The golf sector is thriving, with rising demand for golf equipment driven by technological advancements and increased participation among younger demographics [3]. - There is robust demand for fitness-related products, particularly home workout equipment and digital fitness platforms, as consumers prioritize health and convenience [4]. Economic Context - The U.S. economy is facing mixed conditions in 2025, with resilient consumer spending but challenges from inflation and higher interest rates [5]. - Despite a strong labor market, there are signs of cooling in certain sectors, contributing to a cautious economic outlook [5]. Industry Performance - The Zacks Leisure and Recreation Products industry ranks 56, placing it in the top 23% of over 243 Zacks industries, indicating positive near-term prospects [6][7]. - The industry has underperformed the S&P 500, with a growth of 16% compared to the S&P 500's 19.5% increase over the past year [10]. Valuation Metrics - The industry trades at a forward price-to-earnings ratio of 25.65X, higher than the S&P 500's 23.55X and the sector's 18.45X [13]. Notable Companies - **Peloton Interactive, Inc. (PTON)**: The company reported 552,000 paid app subscriptions and $607 million in total revenues, exceeding guidance. Fiscal 2026 earnings are expected to rise by 123.3% [16][17]. - **Topgolf Callaway Brands Corp. (MODG)**: The company is benefiting from strong consumer demand in golf equipment and effective cost-saving initiatives, with a positive outlook for ongoing operations [22]. - **Acushnet Holdings Corp. (GOLF)**: The company continues to see steady demand for its Titleist golf equipment, with a projected 2% increase in earnings for 2025 [23][24].