Core Insights - Topgolf Callaway Brands Corp. has successfully completed the sale of its Jack Wolfskin business to ANTA Sports for $290 million, subject to customary closing adjustments [1][2] - The transaction, effective May 31, 2025, marks a significant milestone for the company as it refocuses on its core businesses and enhances financial flexibility ahead of the planned separation of Topgolf from its core operations [2][3] - The President and CEO of Topgolf Callaway Brands expressed confidence in ANTA Sports to maintain the integrity of the Jack Wolfskin brand and acknowledged the contributions of Jack Wolfskin employees [3] Company Overview - Topgolf Callaway Brands Corp. is a tech-enabled Modern Golf and active lifestyle company, offering golf equipment, apparel, and entertainment, with a portfolio that includes Topgolf, Callaway Golf, TravisMathew, Odyssey, and OGIO [4]

Core Insights - Topgolf Callaway Brands Corp. (MODG) reported first-quarter 2025 results with earnings and revenues exceeding the Zacks Consensus Estimate, although total revenues declined year over year by 4.5% [1][4] - The company is divesting its Jack Wolfskin business to focus on core operations, improve resource allocation, and strengthen its balance sheet and liquidity [2] - Management remains optimistic about maintaining full-year revenue and adjusted EBITDA guidance, supported by a strong start to the year and favorable currency trends [3] Financial Performance - Adjusted earnings per share (EPS) for Q1 2025 was 11 cents, surpassing the Zacks Consensus Estimate of 4 cents, compared to 8 cents in the prior-year quarter [4] - Total revenues reached $1.09 billion, beating the consensus estimate by 3.1% [4] - Adjusted net income for the quarter was $20.3 million, up from $14.4 million in the prior-year quarter [8] Segment Performance - **Topgolf Segment**: Revenues were $393.7 million, down 6.8% from $422.8 million year-over-year, with an operating loss of $11.9 million compared to an income of $2.9 million in the prior-year quarter [5] - **Golf Equipment Segment**: Revenues were $443.7 million, a slight decline of 0.3% from $449.9 million year-over-year, with operating income increasing to $101.6 million from $82.1 million [6] - **Active Lifestyle Segment**: Revenues were $254.9 million, down 4.7% from $271.5 million year-over-year, attributed to the downsizing of the Jack Wolfskin business, though partially offset by growth in China [7] Cost Management and Outlook - Total costs and expenses for Q1 2025 were $1.03 billion, down from $1.08 billion in the prior-year period [8] - For Q2 2025, the company expects revenues between $1.075 billion and $1.115 billion, with adjusted EBITDA projected between $139 million and $159 million [11] - For the full year 2025, revenues are anticipated to be in the range of $4 billion to $4.19 billion, with Topgolf revenues expected between $1.68 billion and $1.79 billion [12]

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Company Performance - Topgolf Callaway Brands reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of a loss of $0.04 per share, and up from earnings of $0.09 per share a year ago [1] - The earnings surprise for the quarter was 375%, with the company having surpassed consensus EPS estimates in all four of the last quarters [2] - The company posted revenues of $1.09 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.10%, although this represents a decline from year-ago revenues of $1.14 billion [3] Stock Performance and Outlook - Topgolf Callaway shares have declined approximately 6.6% since the beginning of the year, compared to a decline of 3.8% for the S&P 500 [4] - The current consensus EPS estimate for the upcoming quarter is $0.10 on revenues of $1.12 billion, while the estimate for the current fiscal year is -$0.51 on revenues of $4.05 billion [8] Industry Context - The Leisure and Recreation Products industry, to which Topgolf Callaway belongs, is currently ranked in the bottom 14% of over 250 Zacks industries, indicating potential challenges for stock performance [9] - The performance of Topgolf Callaway may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [9]

Financial Data and Key Metrics Changes - Consolidated revenues for Q1 2025 were $1,090 million, a decrease of 5% year over year, primarily due to lower Topgolf same venue sales and unfavorable foreign currency rates [42][43] - Q1 adjusted EBITDA increased by 4% to $167 million, driven by improved profitability in the golf equipment and active lifestyle segments [42] - Available liquidity increased by $85 million to $805 million as of March 31, 2025, compared to Q1 2024 [45] Business Line Data and Key Metrics Changes - Topgolf Q1 revenue decreased by 7% year over year due to lower same venue sales and the sale of the World Golf Tour business [43] - Golf equipment revenue decreased by 1% to $444 million, but operating income increased by 24% to $102 million due to improved gross margins and cost savings [44] - Active lifestyle segment revenue decreased by $17 million to $255 million, primarily due to the planned rightsizing of the Jack Wolfskin business [44] Market Data and Key Metrics Changes - U.S. rounds played were up 3.8% in March, but down slightly year to date, reflecting weather impacts [15] - Same venue sales at Topgolf were down approximately 12% for Q1, with corporate events down 13% [27] - Overall traffic in the second quarter through April was approximately flat year over year, with one to two bay traffic up low single digits [29] Company Strategy and Development Direction - The company announced the sale of Jack Wolfskin to ANTA Sports, allowing for greater business focus and financial flexibility [8] - Topgolf is implementing a strategic reset to improve value perception while maintaining a premium brand image, with initiatives like Sunday Funday and Topgolf Nights aimed at driving traffic [20][21] - The company is committed to separating Topgolf from its core business to unlock shareholder value, with various alternatives being evaluated [48][49] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about a price-sensitive consumer environment and the impact of corporate spending pressures on the events business [30][58] - The company remains optimistic about the golf equipment segment, noting strong consumer demand and market conditions [57] - Future guidance for Topgolf same venue sales has been revised to a decline of 6% to 12%, reflecting economic uncertainty [51] Other Important Information - The company expects to maintain its full-year adjusted EBITDA guidance for Topgolf despite anticipated revenue declines [51] - Tariff impacts are projected to be approximately $25 million for the year, with the company taking proactive measures to mitigate these costs [9][52] Q&A Session Summary Question: Any change in the industry backdrop for the core golf equipment business? - Management indicated no significant changes, with strong consumer demand and a positive outlook for the golf business [57] Question: How much of the softness in Topgolf is attributed to macro factors versus competition? - Management noted that corporate spending pressure is a direct macro impact, while the consumer remains price-sensitive [58] Question: What are the plans for managing venue-level cost structures going forward? - Management expressed confidence in long-term venue margins, emphasizing ongoing investments in value and efficiency improvements [66] Question: Was there any impact from the Easter shift on business performance? - Management acknowledged a shift but did not consider it material to their guidance [69] Question: What are the specifics of the cost savings achieved? - Management stated that proactive cost savings have been implemented across all areas of the business, benefiting overall performance [75] Question: How is the value proposition being adjusted for the events business? - Management is offering more local flexibility and incentives to win sales, while maintaining the premium nature of the product [100]

Financial Data and Key Metrics Changes - Consolidated revenues for Q1 2025 were $1,090 million, a decrease of 5% year over year, primarily due to lower Topgolf same venue sales and unfavorable foreign currency rates [40] - Q1 adjusted EBITDA increased by 4% to $167 million, driven by improved profitability in the golf equipment and active lifestyle segments [40] - Available liquidity increased by $85 million to $805 million as of March 31, 2025, due to increased cash compared to Q1 2024 [43] Business Line Data and Key Metrics Changes - Topgolf Q1 revenue decreased by 7% year over year, attributed to lower same venue sales and the sale of the World Golf Tour business [41] - Golf equipment revenue decreased by 1% to $444 million, but operating income increased by 24% to $102 million due to improved gross margins and cost savings [42] - Active Lifestyle segment revenue decreased by $17 million to $255 million, primarily due to the planned rightsizing of the Jack Wolfskin business [42] Market Data and Key Metrics Changes - U.S. rounds played were up 3.8% in March, but down slightly year to date, reflecting weather impacts [15] - Same venue sales at Topgolf were down approximately 12% for Q1, with corporate events down 13% [26] - The consumer base for Topgolf has an average income of approximately $100,000, indicating a relatively affluent target market [18] Company Strategy and Development Direction - The company announced the sale of Jack Wolfskin to ANTA Sports, allowing for greater business focus and financial flexibility [7] - Topgolf is implementing strategic initiatives to reset its value perception while maintaining a premium brand image [19] - The company is actively pursuing various alternatives for the separation of Topgolf, including a sale or spin-off, targeting the second half of the year for completion [45][46] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the demand side due to a slowing consumer environment, but noted that golf equipment has historically been resilient during mild recessions [10] - The company is optimistic about its ability to navigate current macroeconomic challenges, including tariffs and consumer spending pressures [50] - Management maintained full-year guidance despite the anticipated impact of the Jack Wolfskin sale and current tariffs [49] Other Important Information - The company expects to see a decline in Topgolf same venue sales guidance to down 6% to 12% for the year [22] - Adjusted EBITDA guidance for Topgolf remains at $240 million to $300 million, supported by ongoing cost savings initiatives [49] - The company is testing new value offerings and enhancing customer experience to drive traffic growth [34] Q&A Session Summary Question: Any change in the industry backdrop for the core golf equipment business? - Management noted that the golf consumer remains strong, and the outlook for the golf business is positive with no material changes [56] Question: How much do you attribute the softening at Topgolf to macro factors versus competition? - Management indicated that corporate spending pressure is a direct macro impact, while the consumer remains price sensitive [58] Question: How do you plan to manage venue-level cost structure going forward? - Management expressed confidence in long-term venue margins, emphasizing ongoing investments in value while maintaining player experience [66] Question: What is the impact of the Easter shift on business? - Management acknowledged a shift in events due to Easter but did not consider it material to their guidance [69] Question: Can you provide an update on cost savings and their impact? - Management confirmed that proactive cost savings have been beneficial, allowing them to hold guidance despite challenges [72] Question: How much of the Topgolf same venue sales reduction was due to April trends? - Management stated that the primary driver was the outlook on events, with improved traffic trends in the walk-in business [81] Question: Is there a value orientation program for the events business? - Management is offering more local flexibility in the events business to compete effectively, but noted that corporate spending is currently under pressure [99]

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 March 31, 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 in ...

First Quarter 2025 Earnings Conference Call May 12, 2025 IMPORTANT NOTICES Forward-looking Statements. During the presentation, any comments made about future plans, events, financial results, performance, prospects, or growth opportunities, including statements relating to the Company's financial outlook (including, among others, Company, Topgolf and core business revenues, same venue sales, the Non-GAAP Projections (as defined below), and capital expenditures), our plans to pursue a separation of the Topg ...

TOPGOLF CALLAWAY BRANDS ANNOUNCES FIRST QUARTER 2025 RESULTS HIGHLIGHTS CARLSBAD, CA /May 12, 2025/ Topgolf Callaway Brands Corp. (the "Company" or "Topgolf Callaway Brands", "we", "our", "us") (NYSE: MODG) announced its financial results for the first quarter ended March 31, 2025. "We are pleased with our first quarter results as we met or beat our plan in all segments of our business," commented Chip Brewer, President and CEO. "We are particularly pleased with the performance of our Golf Equipment busines ...

HIGHLIGHTS Q1 consolidated Net Revenue of $1,092 million and strong Adjusted EBITDA both outperformed expectations. Q1 Total Segment Operating Income increased 9.7%. The Company further strengthened its available liquidity position to $805 million, increasing by 12% year-over-year. The Company reaffirmed its consolidated full year Revenue and Adjusted EBITDA guidance (subject to adjustment pending the sale of its Jack Wolfskin business).CARLSBAD, Calif., May 12, 2025 /PRNewswire/ -- Topgolf Callaway Brands ...