Financial Data and Key Metrics Changes - Acushnet reported worldwide net sales of $720 million for the second quarter, a 5% increase year-over-year, driven by strong performance in golf equipment and gear segments [6][14] - Adjusted EBITDA for the second quarter was $143 million, reflecting a 9% year-over-year increase, while first half adjusted EBITDA was $282 million, down 1% [6][14] - Gross profit for the second quarter was $354 million, up $21 million compared to the previous year, with a gross margin of 49.2%, an increase of 40 basis points [15][16] Business Line Data and Key Metrics Changes - Golf equipment sales increased mid-single digits in both the quarter and first half, with Titleist golf equipment revenues up 10% compared to 2023 [8][10] - Golf gear sales rose 7% in the second quarter and 6% for the first half, while FootJoy sales decreased by 2% in the quarter and 4% for the half [9][10] - Products not allocated to a reportable segment, including shoes, outerwear, and apparel, experienced double-digit growth in the first half [11] Market Data and Key Metrics Changes - The US market saw 1.5 million new golfers in 2024, contributing to a 2% increase in worldwide rounds of play in the first half [5][12] - EMEA revenues increased by 6% in the first half, with significant growth in the UK where rounds of play rose by 20% [11][12] - Revenues in Japan and Korea increased by 43% in the first half, although the apparel, footwear, and gear markets in these regions have been relatively soft [12] Company Strategy and Development Direction - Acushnet is focused on long-term investments in golf equipment innovation and technology to enhance golfer connections [7][20] - The company aims to mitigate tariff impacts through supply chain optimization, vendor sharing programs, and selective pricing actions [21] - Acushnet is committed to returning capital to shareholders while investing in business growth [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the golf industry's fundamentals and the company's product pipeline despite macroeconomic uncertainties [12][13] - The company anticipates low single-digit net sales growth for the second half of 2025, with a full-year FX headwind of approximately $5 million [20] - Management is closely monitoring the dynamic tariff landscape and its potential impact on consumer spending [20][21] Other Important Information - Acushnet initiated a voluntary bridge to retirement program, resulting in restructuring costs of $6.4 million included in SG&A expenses [16] - The company returned approximately $154 million to shareholders in the first half, including $125 million in share repurchases and $29 million in cash dividends [19] Q&A Session Summary Question: Impact of inflation and pricing on the industry - Management noted that price increases have been observed in gear, footwear, and apparel, with some resilience in the ball business due to US manufacturing [24][25] Question: Demand and sell-through commentary - Management expressed satisfaction with sell-in results and indicated that inventory levels are normalized, linking this to healthy sell-through trends [35][36] Question: Customer response to new product launches - Management reported positive sell-through trends for new product launches, including the Pro V1 golf balls and new T-series irons, indicating strong market reception [44][46]

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]