PresentationKatharine McShaneMD & Retail Analyst Good morning. Thank you for joining us. It's my pleasure to introduce Topgolf Callaway Brands. Today, we have with us Chip Brewer, President and Chief Executive Officer. Chip joined the company in 2012; and we also have Brian Lynch, Executive Vice President and Chief Financial Officer and Chief Legal Officer, who joined in 1999. Chip and Brian, thank you so much for joining us today. ...

Financial Data and Key Metrics Changes - The company updated its tariff cost estimate from $25 million to $40 million, impacting EBITDA [24][25]. - Despite challenges, the EBITDAR margin performance has remained flat year-over-year, indicating strong operational management [50]. Business Line Data and Key Metrics Changes - The golf equipment segment has seen a significant increase in participation, with 1.5 million new golfers in the U.S., the highest growth since 2000 [4][5]. - Same venue sales for Topgolf have faced challenges, with a reported decline of 6% in Q2, but traffic has shown double-digit growth in June and July due to new value propositions [41][36]. Market Data and Key Metrics Changes - The golf industry has experienced a resurgence post-pandemic, with a broader and more diverse customer base, including increased female participation [4][11]. - The corporate event side of Topgolf remains challenged, with companies cutting back on budgets, impacting sales [44][47]. Company Strategy and Development Direction - The company is focusing on innovation and product development, leveraging AI in product design to maintain a competitive edge [17][19]. - A strategic reset for Topgolf is underway, emphasizing value propositions to attract customers and improve same venue sales [41][36]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about consumer trends, noting that the summer performance has been strong and expects this to continue [54]. - The competitive landscape is expected to favor companies with strong supply chains and innovative capabilities, with market share consolidation likely to speed up [63][65]. Other Important Information - The company has diversified its supply chain to mitigate tariff impacts, having moved away from sourcing from China [25][26]. - There are ongoing initiatives to improve operational efficiency and cost structure in response to the current economic environment [27]. Q&A Session All Questions and Answers Question: What are the expectations for the consumer environment in the second half of the year? - Management has seen positive consumer trends and expects this to continue [54]. Question: How has pricing been affected by tariffs? - The company has been strategic in pricing, with no significant impact on the golf equipment side despite some price increases [57][58]. Question: What are the expectations for inventory growth into the second half? - There are no significant changes anticipated in inventory management, with normal practices expected [59]. Question: Are there any disruptions from supply chain uncertainty? - No disruptions are currently seen in the supply chain, with adjustments planned for the long term [60]. Question: How are freight, wages, and materials expected to change into 2026? - No significant changes are anticipated in freight rates, wages, or material costs [61]. Question: What is the outlook for market share consolidation in 2026? - Market share consolidation is expected to speed up, favoring companies with strong supply chains and innovative capabilities [63][65].

Core Insights - Topgolf is set to open a new venue in Avon, Ohio, on September 19, 2025, marking its fifth location in the state [1][2] - The new venue is strategically located approximately 20 miles west of downtown Cleveland, enhancing Topgolf's presence in the Northeast Ohio market [1][5] Company Overview - Topgolf is a brand under Topgolf Callaway Brands Corp. (NYSE: MODG), known for its tech-enabled modern golf experiences and entertainment [8][9] - The company operates over 100 venues globally, utilizing industry-leading Toptracer technology to enhance the golfing experience [8][9] Venue Features - Topgolf Avon will feature 64 outdoor climate-controlled hitting bays across two levels, equipped with lounge-type furniture and high-top tables [6] - The venue will employ approximately 200 staff members, referred to as "Playmakers," who will provide various services [6] - Topgolf Avon will include a full-service restaurant and bar, a private event space, and a 22-foot video wall, along with over 100 HDTVs and year-round family-friendly programming [6] Community Impact - Local officials, including Avon Mayor Bryan Jensen, express excitement about Topgolf's arrival, highlighting its potential to provide a unique experience for residents and visitors [5] - The venue is expected to contribute to the local economy and enhance the entertainment options available in the growing city of Avon [5]

Core Insights - Topgolf is enhancing the football season experience with new games and food offerings, aiming to create memorable moments for players and fans [1][2] Group 1: New Game Introduction - The Topgolf Field Goal Challenge is a new game that tests players' swings and aims, featuring two play modes: Free Play and The Challenge [2] - In Free Play, players can choose from five different distances, while The Challenge mode allows each player 10 shots to score five balls through digital goal posts [2][3] Group 2: Venue Experience - Topgolf has 51 locations nationwide equipped with real field goal posts for an immersive experience [3] - The company offers various game day packages, including a Tailgate Package for two side-by-side bays with food and drinks, available starting September 2 [6] Group 3: Food and Beverage Offerings - Topgolf is introducing a customizable food and drink bundle called the Pepsi® Kickoff Combo, priced between $24.99 and $29.99 [4] - New menu items include Touchdown Dill Dip ($9.79-$10.99), Kickin' Popper Dip ($10.79-$12.49), Buffalo Chicken Potato Skins ($11.29-$12.99), Swicy Peach Pork Sliders ($13.99-$15.79), and Fiesta Nachos ($11.99-$13.99) [4] Group 4: Pricing and Promotions - Sunday Funday pricing during the football season ranges from $30 to $40 per hour, translating to $5 to $7 per person, depending on the venue [6] - Additional promotions include Half-Off Golf from Monday to Thursday [6] Group 5: Company Overview - Topgolf is a brand under Topgolf Callaway Brands Corp. (NYSE: MODG), which operates over 100 venues globally and utilizes Toptracer technology [6][8] - The company focuses on creating a tech-driven, inclusive golf experience that caters to both on-course and off-course activities [8]

The company delivered better-than-expected earnings before its big spinoff. Shares of golf giant Topgolf Callaway (MODG 8.76%) rallied 8.8% on Thursday. The company delivered earnings last night that beat expectations across the board. Investors may also be looking forward to the spinoff of Topgolf, even though it may be pushed into next year in light of the unit CEO's resignation. Better-than-expected strength across the business These results reflect continued consumer strength in our golf equipment busin ...

Topgolf Callaway Brands (MODG -2.50%), the sports and golf entertainment company behind Topgolf venues and Callaway golf equipment, reported results for Q2 2025 on August 6, 2025. The most important news: the company posted better-than-expected non-GAAP diluted EPS of $0.24, well above the $0.02 analyst estimate, and GAAP revenue was $1,110.5 million, beating forecasts. Despite this beat, GAAP revenue dropped 4.1% from the same quarter a year ago. The company's performance benefited from cost discipline and ...

Topgolf Callaway Brands (MODG) reported $1.11 billion in revenue for the quarter ended June 2025, representing a year-over-year decline of 4.1%. EPS of $0.24 for the same period compares to $0.42 a year ago. The reported revenue represents a surprise of +2.69% over the Zacks Consensus Estimate of $1.08 billion. With the consensus EPS estimate being $0.03, the EPS surprise was +700%. Shares of Topgolf Callaway have returned +2.9% over the past month versus the Zacks S&P 500 composite's +0.5% change. The stoc ...

Financial Data and Key Metrics Changes - Consolidated revenues for Q2 2025 were $1,110 million, representing a 4% year-over-year decrease, primarily due to decreased revenue in the Active Lifestyle segment [29] - Q2 adjusted EBITDA was $196 million, a 5% year-over-year decrease, mainly due to decreased revenue and incremental tariffs [30] - The company raised its full-year revenue guidance to a range of $3,800 million to $3,920 million, reflecting an increase of over $30 million at the midpoint compared to prior guidance [35] Business Line Data and Key Metrics Changes - Golf equipment revenue for Q2 was approximately flat year-over-year at $412 million, exceeding expectations [30] - Active Lifestyle segment revenue decreased by $36 million year-over-year to $214 million, primarily due to the sale of Jack Wolfskin and soft market conditions [31] - Topgolf Q2 revenue decreased by 2% year-over-year, primarily due to a 6% decline in same venue sales, partially offset by higher revenue from new venues [32] Market Data and Key Metrics Changes - Market conditions in the U.S. for golf equipment remain healthy, with rounds played approximately flat on a playable hour adjusted basis [8] - Conditions in the UK and Northern Europe markets are strong, while Asia and Central Europe are softer year-over-year [9] - The athleisure category in the Active Lifestyle segment is down mid to high single digits during Q2 [11] Company Strategy and Development Direction - The company closed the sale of Jack Wolfskin, enabling greater business focus and financial flexibility for Topgolf [4] - The company is committed to ongoing cost reduction and margin improvement initiatives, which have been beneficial in the current operating environment [6] - The strategic process for Topgolf is ongoing, with both a spin and sale being evaluated, although a spin is now impractical for the second half of the year [15][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the golf equipment segment, citing healthy consumer engagement and upcoming product launches [10] - The company is optimistic about the improving trends in same venue sales at Topgolf, driven by value initiatives and enhanced customer experience [12][39] - Management acknowledged the challenges posed by tariffs, increasing the estimated impact from $25 million to $40 million for the year [5][45] Other Important Information - The company reported an increase in available liquidity to $1,160 million as of June 30, 2025, primarily due to cash proceeds from the sale of Jack Wolfskin [32] - Net debt decreased to $2,390 million, down from $2,620 million year-over-year, reflecting improved cash balances [33] - The company expects to be free cash flow positive at both the total company and Topgolf in 2025 [38] Q&A Session Summary Question: Can you talk about the robust process regarding the spin and sale of Topgolf? - Management confirmed that the strategic direction remains unchanged, with only the timing of a potential spin being affected due to leadership changes [42][80] Question: What is the current health of the golf industry and drivers of the improving golf equipment business? - Management noted that the golf equipment business remains healthy, with consumer engagement strong and sell-through up low single digits [49] Question: What were the biggest contributors to the value initiatives at Topgolf? - Management highlighted the success of the Sunday Fun Pass and other value offerings, which significantly increased traffic and improved customer perception [57] Question: Can you provide an update on cost reduction efforts and labor efficiency initiatives? - Management indicated that teams have executed well on cost reduction, with improvements in labor efficiency and service speed contributing to stable margins [66] Question: How is the TravisMathew business trending? - Management reported that while the athleisure market is down, the women's category within TravisMathew continues to perform well [72]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2025 OR ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period to Commission file number 001-10962 Topgolf Callaway Brands Corp. (Exact name of registrant as specified in its charter) Delaware 95-3797580 (State or other jurisdiction of inc ...

Q2 2025 Financial Performance - Consolidated Net Revenue for Q2 2025 reached $1.1 billion, a decrease of 4% compared to $1.1578 billion in Q2 2024[6, 11] - Adjusted EBITDA for Q2 2025 was $196 million, a 5% decrease from $205.6 million in Q2 2024[6, 11] - Net Income for Q2 2025 was $45.6 million, a 45% decrease compared to $83.1 million in Q2 2024[11] - Diluted Earnings Per Share for Q2 2025 were $0.24, a 45% decrease from $0.42 in Q2 2024[11] Guidance and Outlook - The company updated its total company guidance to exclude Jack Wolfskin and raised the full year 2025 financial outlook for its continuing business[9] - Updated 2025 revenue guidance excluding Jack Wolfskin to $3.86 billion, an increase of approximately $28 million in Core (Ex JW) revenue and $5 million in Topgolf revenue compared to prior guidance of $3.828 billion[17, 19] - Increased 2025 Adjusted EBITDA guidance midpoint to $460 million excluding Jack Wolfskin, an increase of approximately $31 million in Core (Ex JW) EBITDA and $10 million in Topgolf EBITDA compared to prior guidance of $434 million, offset by a $15 million impact from increased tariffs[23, 25] - Full year 2025 consolidated net revenue guidance is $3.80 - $3.92 billion, compared to prior guidance of $4.000 - $4.185 billion and FY24 results of $4.24 billion[26] - Full year 2025 consolidated Adjusted EBITDA guidance is $430 - $490 million, compared to prior guidance of $415 - $505 million and FY24 results of $588 million[26] Topgolf Performance - Topgolf same venue sales (SVS) decreased by 6% in Q2 2025 compared to Q2 2024, an improvement from the 12% decrease in Q1 2025[33, 36] - Topgolf same venue visits (SVV) increased by 6% in Q2 2025 compared to Q2 2024, a significant improvement from the 8% decrease in Q1 2025[36] - Full year 2025 Topgolf revenue guidance is $1.71 - $1.77 billion, compared to prior guidance of $1.680 - $1.790 billion and FY24 results of $1.81 billion[26]