Core Viewpoint - Acushnet (GOLF) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Acushnet's Earnings Outlook - The recent upgrade for Acushnet reflects an improvement in its underlying business, which is expected to drive the stock price higher as investors respond positively to this trend [5][10]. - Analysts have raised their earnings estimates for Acushnet, with the Zacks Consensus Estimate increasing by 1.7% over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions and potential for market-beating returns [9][10].

Group 1 - Acushnet Holdings (NYSE: GOLF), owner of the Titleist brand, is being revisited for investment potential due to its strong brand presence in the golf industry [1] - The company is recognized for its appreciation in the golf sector, indicating a positive outlook for its market position [1] Group 2 - Crude Value Insights provides an investment service focused on oil and natural gas, emphasizing cash flow generation as a key metric for value and growth prospects [2] - Subscribers have access to a comprehensive stock model account and in-depth cash flow analyses of exploration and production (E&P) firms, enhancing investment decision-making [2]

Core Concept - Captain Morgan Sliced is launching the "Play the Slice" campaign, encouraging fans to share their golf swings on social media for a chance to win a golf getaway [1][2]. Group 1: Campaign Details - The "Play the Slice" contest runs until the end of July, inviting participants aged 21 and over to post their golf slices on Instagram [1]. - The campaign is an official partnership with the Breezy Open, featuring events in Virginia, New Jersey, and Georgia, along with Sliced Lounges and rewards [2]. - The contest includes a grand prize of a golf trip for four to Hilton Head, South Carolina, which includes flights and accommodations [1]. Group 2: Brand Messaging - The campaign emphasizes a fun and relaxed approach to golf, celebrating all types of swings, including imperfect ones [4][5]. - Captain Morgan Sliced is marketed as a premium ready-to-drink beverage with a 5.8% ABV, available in Original and Sweet vs. Heat variety packs for a suggested retail price of $19.99 [5]. Group 3: Merchandise - A limited-edition "Play the Slice Collection" will be launched later this summer in collaboration with Pluto Golf, featuring various golf apparel and accessories [4]. Group 4: Company Background - Captain Morgan is the number one selling spiced rum in the U.S., with a diverse portfolio of flavored rums [8]. - Diageo, the parent company, is a global leader in beverage alcohol, with products sold in over 180 countries [11].

Summary of Key Points from the Conference Call Industry and Companies Involved - **Industry**: Lifestyle & Growth Platforms - **Companies Mentioned**: - SharkNinja (SN) - YETI Holdings (YETI) - Acushnet (GOLF) - Revolve (RVLV) Core Insights and Arguments - **Tariff Impact**: - In Q1, tariffs led to a 60 basis points decline in adjusted gross margin (GM) to 50.2% for the companies involved, with potential gross costs amounting to hundreds of millions [7] - Estimated gross cost of $100 million due to a 145% tariff on China-sourced products and a 10% tariff on goods from other countries, resulting in a net 450 basis points decline in GM [7] - Tariffs expected to indirectly reduce top-line growth by 300 basis points due to a softer consumer environment and supply chain disruptions [7] - **Mitigation Strategies**: - Companies are diversifying supply chains, aiming for 90% of US volume to be sourced outside of China by Q2, leveraging suppliers in Southeast Asia and building strategic inventory in the US [7] - Cost reductions through supplier concessions, value engineering opportunities (over 1500 identified), selective pricing, and operational expense optimization [7] - Acushnet plans to offset over 50% of the gross tariff impact this year, with further relief expected in FY26 [7] - Revolve is engaging in cost-sharing discussions with manufacturing partners and diversifying sources outside of China, although this is a long-term strategy [7] Additional Important Insights - **Company Valuations and Price Targets**: - **Acushnet Holdings Corp.**: Price target of $75 based on ~13x 2026E EV/EBITDA; risks include slowing industry growth and adverse weather [8] - **Revolve Group, Inc.**: Price target of $24 based on ~30x FY26 P/E; downside risks include economic weakness and competition [9] - **SharkNinja Inc.**: Price target of $175 based on ~19x FY26E EV/EBITDA; risks include supply chain headwinds and increased competition [10] - **YETI Holdings, Inc.**: Price target of $53 based on ~18x FY26E EPS; risks include competition and economic weakness [11] - **Inventory Exposure**: - Approximately 22% of Revolve's FY24 inventory purchases are directly exposed to tariffs, with management anticipating a GM reduction of 240 basis points due to tariffs and shifts in consumer demand [7] - **Strategic Focus**: - Companies are focusing on managing inventory levels tightly, reducing safety stocks, and pausing non-critical capital expenditures to preserve cash flow and minimize risk [7] This summary encapsulates the key points discussed in the conference call, highlighting the impact of tariffs, mitigation strategies, company valuations, and strategic focuses of the involved companies.

Financial Performance - Net sales for Q1 2025 were $703.372 million, a slight decrease of 0.3% compared to $707.554 million in Q1 2024[24] - Gross profit for Q1 2025 was $337.162 million, down from $342.352 million in Q1 2024, reflecting a gross margin of approximately 47.9%[24] - Net income attributable to Acushnet Holdings Corp. for Q1 2025 was $99.372 million, an increase of 13.1% from $87.762 million in Q1 2024[24] - Basic net income per share for Q1 2025 was $1.62, compared to $1.36 in Q1 2024, representing an increase of 19.1%[24] - The company reported a comprehensive income of $105.835 million for Q1 2025, compared to $76.632 million in Q1 2024[27] - Net income for the three months ended March 31, 2025, was $99,025,000, an increase of 17.1% compared to $84,559,000 in the same period of 2024[30] - Total net sales for the reportable segments reached $670.491 million for the three months ended March 31, 2025, with Titleist Golf Equipment contributing $421.092 million, FootJoy Golf Wear $178.436 million, and Golf Gear $70.963 million[103] - The total operating income for the consolidated segments was $114.547 million for the three months ended March 31, 2025, compared to $120,595 million before income tax[103] Assets and Liabilities - Total assets as of March 31, 2025, were $2.403 billion, up from $2.180 billion as of December 31, 2024[22] - Total liabilities increased to $1.618 billion as of March 31, 2025, compared to $1.383 billion at the end of 2024[22] - The total shareholders' equity as of March 31, 2025, was $780,284,000, a decrease from $903,087,000 as of December 31, 2023[32] - Cash and cash equivalents decreased to $40.599 million as of March 31, 2025, from $53.059 million at the end of 2024[22] - Accounts receivable decreased by $254,549,000 in Q1 2025, compared to a decrease of $267,847,000 in Q1 2024[30] - Total inventories decreased to $538.1 million as of March 31, 2025, from $575.9 million as of December 31, 2024[51] Cash Flow and Financing - Cash flows used in operating activities amounted to $(120,254,000) for Q1 2025, compared to $(109,516,000) in Q1 2024, reflecting a decrease in cash flow[30] - Cash flows provided by financing activities were $118,145,000 in Q1 2025, up from $101,571,000 in Q1 2024[30] - The company recorded a non-cash gain on deconsolidation of $20,887,000 related to Lionscore during the three months ended March 31, 2025[41] - The company had $597.6 million of outstanding indebtedness at variable interest rates, with a potential increase of $6.0 million in annual pre-tax interest expense for a one percentage point increase in interest rates[171] Research and Development - Research and development expenses rose to $18.859 million in Q1 2025, compared to $16.453 million in Q1 2024, indicating a focus on innovation[24] - Research and development expenses amounted to $16.0 million, indicating the company's investment in innovation[104] Shareholder Activities - The company declared a dividend of $0.235 per common share for the first quarter of 2025, totaling $14.576 million, compared to $0.215 per share in the previous year[78] - As of March 31, 2025, the company had $415.5 million remaining under its share repurchase authorization, having repurchased 540,944 shares at an average price of $67.73, totaling $36.637 million[84] - The company recognized a share repurchase liability of $99.1 million for 1,476,851 shares as of March 31, 2025, reflecting ongoing repurchase agreements with Magnus Holdings[82] Tax and Regulatory - The company's effective income tax rate decreased to 17.9% for the three months ended March 31, 2025, down from 21.7% for the same period in 2024, resulting in a tax expense of $21.6 million, a decrease of $1.8 million year-over-year[76][77] Risks and Challenges - Acushnet Holdings Corp. continues to face risks related to global economic conditions, competition, and supply chain disruptions, which may impact future performance[13] - The company is exposed to commodity price risks for materials used in manufacturing, including polybutadiene and titanium[177] - Inflationary pressures may adversely affect the company's operating results, particularly in raw materials and wage rates[178] Compensation and Employee Benefits - Share-based compensation expense was $6,941,000 in Q1 2025, slightly down from $7,424,000 in Q1 2024[30] - The total net periodic benefit cost for pension benefits was $2.243 million for the three months ended March 31, 2025, compared to $2.271 million in the same period of 2024[75] - The number of PSUs that vested during the three months ended March 31, 2025, was 151,848, resulting in the entitlement to receive 196,795 shares of common stock[91] - The cumulative undelivered shares of common stock as of March 31, 2025, were 517,542 for RSUs and 546,789 for PSUs[94] Foreign Exchange and Derivatives - The gross U.S. dollar equivalent notional amount of foreign exchange forward contracts was $206.2 million as of March 31, 2025[63] - For the three months ended March 31, 2025, the company reported total losses from foreign exchange forward contracts of $549,000 compared to gains of $3.461 million in the same period of 2024[67] - The company expects to reclassify a net gain of $4.6 million related to foreign exchange derivative instruments from accumulated other comprehensive loss into cost of goods sold within the next 12 months[66]

Core Insights - Acushnet reported revenue of $703.37 million for the quarter ended March 2025, a decrease of 0.6% year-over-year, while EPS increased to $1.62 from $1.43 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $696.62 million by 0.97%, and the EPS surpassed the consensus estimate of $1.32 by 22.73% [1] Financial Performance Metrics - Titleist golf balls net sales were $213.30 million, slightly below the estimated $214.43 million, reflecting a year-over-year increase of 2.6% [4] - FootJoy golf wear net sales were $178.40 million, falling short of the $188.85 million estimate, representing a year-over-year decline of 7.3% [4] - Titleist golf gear net sales reached $71 million, exceeding the estimated $69.87 million, with a year-over-year increase of 4.1% [4] - Titleist golf clubs net sales were $207.80 million, surpassing the estimated $188.46 million, marking a year-over-year increase of 1.9% [4] Stock Performance - Acushnet shares have returned 15.5% over the past month, outperforming the Zacks S&P 500 composite's return of 10.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Acushnet reported worldwide net sales of $703 million, a 1% increase year-over-year [6] - Adjusted EBITDA was $139 million, reflecting a decrease of $15 million due to increased investment in the equipment segment [6][18] - Gross profit decreased by $5 million compared to the first quarter of 2024, primarily due to higher manufacturing costs [19] Business Line Data and Key Metrics Changes - Golf equipment net sales increased by almost 4%, driven by new product launches and strong performance in the EMEA region [7][11] - Titleist golf ball business grew by 4%, with significant gains in the EMEA region [8] - FootJoy sales declined by 5%, attributed to lower closeout footwear sales and targeted product line rationalization [10][19] Market Data and Key Metrics Changes - The US market saw a 1% increase, while EMEA grew by 4% [11] - Japan and Korea experienced declines of 24% each, primarily due to poor weather affecting the golf season [11] - Rounds of play in the US were down 2%, but worldwide rounds were slightly up, led by a 15% increase in EMEA and the UK [12] Company Strategy and Development Direction - The company is focused on executing a full slate of product fitting events across all markets [11] - Acushnet is adapting its supply chain to mitigate tariff impacts, with plans to source more components from non-China territories [14][26] - The company aims to maintain a strong consumer base and provide exceptional product experiences while navigating tariff uncertainties [17][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the core consumer, the dedicated golfer, despite macroeconomic uncertainties [17][25] - The company expects a gross tariff impact of approximately $75 million in 2025, with plans to mitigate over 50% of this impact [25][26] - Future guidance remains uncertain due to changing trade policies, with no updates provided until more clarity is achieved [25] Other Important Information - Capital expenditures for the first quarter were $11 million, with a planned total of approximately $85 million for 2025 [22] - The company returned roughly $51 million to shareholders through share repurchases and cash dividends [23] - The effective tax rate in Q1 was 17.9%, down from 21.7% the previous year [21] Q&A Session Summary Question: Guidance and Consumer Demand - Management indicated that the decision to pause guidance updates is due to less visibility rather than a change in consumer demand [30][31] Question: Tariff Mitigation Actions - Management outlined that pricing would be a last resort, focusing first on supply chain adjustments and cost-sharing with suppliers [34][36] Question: Impact of Tariff Changes - If the China tariff rate were to decrease, the potential mitigation of the $75 million impact could be significant [41][42] Question: Demand Trends in Asia - Management noted a slow start in Asia due to weather but observed improvement in March and April [43][44] Question: Currency Exchange Rate Impact - A potential tailwind of $20 million was discussed if current exchange rates persist, impacting overall financial outlook positively [49][50] Question: Diversification from China - Management confirmed plans to diversify sourcing away from China while maintaining some supply chains for non-US markets [56][58]

Financial Data and Key Metrics Changes - Acushnet reported worldwide net sales of $703 million, a 1% increase year-over-year [6] - Adjusted EBITDA was $139 million, reflecting a decrease of $15 million due to increased investments in the equipment segment [6][17] - Gross profit decreased by $5 million compared to the first quarter of 2024, primarily due to higher manufacturing costs [19] Business Line Data and Key Metrics Changes - Golf equipment net sales increased by almost 4%, driven by new product launches and strong performance in the EMEA region [7] - Titleist golf ball business grew by 4%, with significant gains in the EMEA region [7] - FootJoy sales declined by 5% due to lower closeout footwear sales and targeted product line rationalization [9][19] Market Data and Key Metrics Changes - The US market saw a 1% increase, while EMEA grew by 4% [11] - Japan and Korea experienced declines of 24% each, attributed to poor weather affecting the golf season [11] - Rounds of play in the US were down by 2%, but worldwide rounds were slightly up, particularly in EMEA and the UK [12] Company Strategy and Development Direction - The company is focused on executing a full slate of fitting events across all markets and enhancing product offerings [11] - Acushnet is adapting its supply chain to mitigate tariff impacts, with a focus on regional diversification and vertical integration [12][15] - The company plans to take pricing measures if tariff costs become permanent, but has not yet passed these costs to consumers [16] Management's Comments on Operating Environment and Future Outlook - Management characterized 2025 as a year of stability and improving profitability for FootJoy, with a focus on premium sales [10] - The macro environment remains uncertain due to changing trade policies, leading to a cautious approach in providing full-year guidance [24] - The core consumer remains strong and resilient, with expectations for low single-digit sales growth in the first half of 2025 [26] Other Important Information - The company returned approximately $51 million to shareholders through share repurchases and dividends [23] - Capital expenditures for the first quarter were $11 million, with plans for approximately $85 million in 2025 [22] - The effective tax rate in Q1 was 17.9%, down from 21.7% the previous year [21] Q&A Session Summary Question: Guidance and Consumer Demand - Management indicated that the decision to pause guidance updates is due to less visibility rather than changes in consumer demand [30][31] Question: Tariff Mitigation Actions - Management emphasized that pricing is the last resort, focusing first on supply chain adjustments and cost-sharing with suppliers [35][36] Question: Impact of Tariffs on Financials - A significant portion of the estimated $75 million tariff impact is related to China, and management is exploring ways to mitigate this [42][25] Question: Demand Trends in Asia - Management noted a slow start in Japan and Korea due to weather but observed improvement in March and April [45][46] Question: Footwear Market Dynamics - Management expressed confidence in the footwear business, highlighting new product launches and a focus on premium offerings [71][72]

Core Insights - Acushnet reported quarterly earnings of $1.62 per share, exceeding the Zacks Consensus Estimate of $1.32 per share, and up from $1.43 per share a year ago, representing an earnings surprise of 22.73% [1] - The company posted revenues of $703.37 million for the quarter, surpassing the Zacks Consensus Estimate by 0.97%, but down from $707.55 million year-over-year [2] - Acushnet has surpassed consensus EPS estimates three times over the last four quarters, while it has topped revenue estimates only once in the same period [2] Earnings Outlook - The sustainability of Acushnet's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.36 on revenues of $723.61 million, and for the current fiscal year, it is $3.48 on revenues of $2.51 billion [7] Industry Context - The Leisure and Recreation Products industry, to which Acushnet belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment [5][6]

First Quarter 2025 Earnings Call May 7, 2025 FORWARD-LOOKING STATEMENTS This presentation includes forward-looking statements that reflect our current views with respect to, among other things, our 2025 outlook, our operations and our financial performance. These forward-looking statements are included throughout this presentation and relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, strategic priorities and initiatives, fore ...