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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]

Financial Performance - For the three months ended March 31, 2025, net revenues decreased by $51.9 million or 4.5% compared to the same period in 2024, primarily due to a decrease in Topgolf same venue sales and unfavorable foreign currency exchange rates [142]. - Total net revenues for the three months ended March 31, 2025, were $1,092.3 million, a decrease of $51.9 million (4.5%) compared to the same period in 2024 [147]. - Topgolf net revenues decreased by $29.1 million (6.9%) to $393.7 million, primarily due to a decline in same venue sales and weaker events business [144]. - Golf Equipment net revenues decreased by $6.2 million (1.4%) to $443.7 million, while segment operating income increased by $19.5 million (23.8%) due to higher gross margins [145]. - Active Lifestyle net revenues decreased by $16.6 million (6.1%) to $254.9 million, but segment operating income increased by $5.9 million (23.9%) due to cost reduction efforts [146]. - Net revenues in the United States decreased by $38.6 million (4.7%) to $790.4 million, attributed to declines in same venue sales at Topgolf [148]. - Net revenues in Europe decreased by $11.3 million (8.0%) to $130.1 million, primarily due to the right-sizing of the Jack Wolfskin business [149]. - Asia saw a slight increase in net revenues of $1.2 million (0.9%) to $128.8 million, driven by sales growth in the Jack Wolfskin business in China [150]. Strategic Initiatives - The company announced a strategic plan to separate into two independent companies: Callaway and Topgolf, with the separation expected to be completed in the second half of 2025 [123]. - The sale of the Jack Wolfskin business was announced for $290 million in cash, expected to close in late Q2 or early Q3 of 2025, subject to regulatory approvals [125]. Cost and Expenses - Total costs and expenses decreased by $51.5 million (4.8%) to $1,025.8 million, with significant reductions in cost of products and selling, general and administrative expenses [153]. - The company is facing sustained inflationary pressures, which have increased product and operating costs, although some costs have been offset by price increases [141]. - Inflation has contributed to increased costs of products and services, potentially affecting gross margins [187]. Income and Taxation - GAAP net income decreased to $2.1 million for the three months ended March 31, 2025, compared to $6.5 million for the same period in 2024, with diluted earnings per share at $0.01 versus $0.04 [163]. - Non-GAAP net income for the three months ended March 31, 2025 was $20.3 million, an increase from $14.4 million in 2024, with diluted earnings per share rising to $0.11 from $0.08 [165]. - The provision for income tax increased by $4.5 million to $9.5 million for the three months ended March 31, 2025, resulting in an effective tax rate of 81.6%, up from 43.3% in the same period of 2024 [162]. Cash Flow and Liquidity - Cash and cash equivalents decreased by $127.6 million to $322.7 million as of March 31, 2025, primarily due to cash used in operating activities of $85.2 million and investing activities of $70.0 million [166]. - As of March 31, 2025, the company had $805.0 million in cash and availability under credit facilities, an increase of $85.3 million compared to March 31, 2024 [171]. - Approximately 44% of the company's cash was held outside the United States as of March 31, 2025, maintaining an indefinite reinvestment assertion in most jurisdictions [172]. - The company plans to utilize its liquidity and cash flows from operations to fund significant cash obligations as of March 31, 2025 [174]. Debt and Obligations - Total long-term debt amounts to $1,491.5 million, with $1,157.9 million due thereafter [1]. - Interest payments related to long-term debt total $484.3 million, with $185.3 million due in 2026-2027 [1]. - Total obligations, including long-term debt, finance leases, and operating leases, amount to $11,098.5 million [1]. - Minimum lease payments for leases signed but not yet commenced total $851.6 million [1]. - DLF obligations related to Topgolf venue construction are $4,941.2 million [1]. Inventory and Receivables - Consolidated net accounts receivable increased to $372.2 million as of March 31, 2025, up from $175.7 million at December 31, 2024, reflecting seasonal peaks in golf equipment sales [167]. - Inventory decreased by $103.4 million to $653.9 million as of March 31, 2025, primarily due to the reclassification of $75.3 million of Jack Wolfskin inventory to assets held for sale [168]. Market Conditions - The Topgolf segment's revenue is expected to fluctuate seasonally, with higher revenues typically in the second and third quarters due to favorable weather conditions [131]. - Same venue sales are a key performance indicator for Topgolf, reflecting acceptance of initiatives and local economic trends [132]. - The company is assessing the impact of a 10% baseline tariff announced in April 2025, which may increase costs and affect product availability [139]. - Foreign currency fluctuations negatively impacted international net revenues by $8.9 million for the three months ended March 31, 2025 [140]. - The estimated loss from foreign currency forward contracts is $44.9 million, based on a hypothetical 10% unfavorable movement [184]. - A 10% increase in interest rates would result in an incremental expense of $4.0 million over the 12-month period ended March 31, 2025 [186]. - The company has no material off-balance sheet arrangements [178].

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 ...

Core Viewpoint - Topgolf Callaway Brands (MODG) is expected to report a quarterly loss of $0.04 per share, a decline of 144.4% year-over-year, with revenues projected at $1.06 billion, down 7.4% from the previous year [1]. Earnings Estimates - The consensus EPS estimate has been revised 3% lower in the last 30 days, indicating a collective reevaluation by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate revisions and short-term stock performance [3]. Revenue Projections - Analysts forecast 'Net Revenues by Category- Gear, Accessories & Other' to reach $108.97 million, reflecting a year-over-year decrease of 2.6% [5]. - 'Net Revenues by Category- Apparel' is expected to be $156.51 million, indicating a decline of 1.9% year-over-year [5]. - 'Net Revenues by Category- Venues' is projected at $379.66 million, down 6.4% from the prior year [5]. - 'Net Revenues- Topgolf' is estimated to be $396.01 million, a decrease of 6.3% from the year-ago quarter [6]. - 'Net Revenues- Golf Equipment' is expected to reach $444.44 million, reflecting a year-over-year change of -1.2% [6]. - 'Net Revenues- Active Lifestyle' is projected at $265.76 million, down 2.1% from the previous year [7]. - 'Net Revenues by Category- Golf Balls' is expected to be $98.92 million, indicating a decline of 4.9% year-over-year [7]. - 'Net Revenues by Category- Golf Clubs' is projected at $345.27 million, a slight decrease of 0.2% from the prior year [8]. - 'Net Revenues- Services' is estimated at $392.88 million, reflecting a year-over-year change of -6% [8]. - 'Net Revenues- Products' is expected to reach $689.28 million, indicating a decline of 5.1% year-over-year [8]. Operating Income - The consensus estimate for 'Operating income (loss)- Golf Equipment' stands at $76.50 million, compared to $82.10 million from the previous year [9]. Stock Performance - Over the past month, shares of Topgolf Callaway have returned +9.9%, while the Zacks S&P 500 composite has changed by +11.3% [9].

Core Viewpoint - Topgolf Callaway Brands Corp. plans to release its first quarter 2025 financial results on May 12, 2025, after market close, followed by a conference call to discuss the results and business outlook [1]. Company Overview - Topgolf Callaway Brands Corp. (NYSE: MODG) is a tech-enabled Modern Golf and active lifestyle company, offering golf equipment, apparel, and entertainment through a portfolio of global brands including Topgolf, Callaway Golf, and others [3]. - The concept of "Modern Golf" encompasses both on-course and off-course golf experiences, creating a dynamic and inclusive ecosystem [3]. Investor Relations - A live webcast and presentation of the financial results will be available on the Company's Investor Relations website [1]. - A replay of the conference call will be accessible online approximately two hours after the event concludes [2]. Contact Information - Investor contact for Topgolf Callaway Brands is Katina Metzidakis, available via email [4].