Acushnet (US:GOLF)2024-08-06 17:57Financial Data and Key Metrics Changes - Acushnet reported net sales of $684 million for Q2 2024, a 1% year-over-year increase, primarily driven by gains in Titleist Golf Balls [5] - Adjusted EBITDA for Q2 was $131 million, down $1.1 million from the previous year [5] - For the first half of 2024, net sales reached $1.39 billion, up 2%, while adjusted EBITDA also increased by 2% to $285 million [5][12] - Gross profit for Q2 was $372 million, up 1% compared to 2023, with a gross margin of 54.4%, an increase of 90 basis points year-over-year [13][14] Business Line Data and Key Metrics Changes - Titleist Golf Balls and Golf Clubs saw growth of 7% and 5% respectively in the first half of 2024 [6] - Titleist Golf Balls performed particularly well, achieving double-digit gains in the U.S. and growth in Korea [6] - Titleist Golf Clubs sales increased by 22% compared to the first half of 2022, with strong demand for new products [7] - FootJoy Golf Wear segment experienced a decline in net sales in the Rest of World region [13] Market Data and Key Metrics Changes - The U.S. market grew by 7% in the first half, driven by strong performance in golf balls and apparel [8] - Rounds of play in the U.S. were up 2%, despite poor weather conditions affecting early season traffic [8] - In Europe, rounds were down high single digits due to cold and wet weather, impacting sales across all business lines [8] - Korea's premium apparel market is expected to remain soft in the near term due to inventory corrections [9] Company Strategy and Development Direction - Acushnet is focused on product launches, including new Titleist GT Metals and seasonal collections for FJ and KJUS [11] - The company is leveraging its strong balance sheet for disciplined capital allocation and investments in business growth [11] - Management expressed confidence in the company's ability to execute long-term goals and maintain brand momentum [10] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the overall health of the golf industry, particularly in the U.S. market [20] - There are concerns about the apparel market in Asia, particularly in Korea, which is experiencing a correction [22] - The company expects third-quarter net sales to exceed 50% of second-half totals, driven by product launches and strong demand [18] Other Important Information - Acushnet's inventory position improved, declining 22% from Q4 2023 and 10% from Q1 2024 [15] - The company returned approximately $101 million to shareholders in the first half of 2024, including share repurchases and dividends [16] - Full-year 2024 net sales outlook is reaffirmed at $2.45 billion to $2.5 billion, with adjusted EBITDA expected between $385 million and $405 million [17] Q&A Session Summary Question: Any change in view regarding the health of the golf industry? - Management noted the U.S. market is healthy, with rounds up despite weather challenges, while Europe is facing difficulties due to poor weather [20][21] Question: Expectations for gross margin in the back half of the year? - Management indicated that gross margin outlook for the back half is expected to be similar to the first half, with no significant changes anticipated [25] Question: Any pushback on ball pricing or trade down observed? - Management reported continued strong demand for premium urethane products, with no significant trade down noted [26] Question: Are golfers delaying club purchases? - Management stated that club purchases have been steady, with successful launches contributing to growth [27] Question: Perspective on the GT family of products compared to previous series? - Management highlighted the GT series as a significant technological advancement, with positive early feedback from players [29][30] Question: Expectations for FootJoy inventory equilibrium? - Management indicated that the U.S. market is in a steady state, while global markets may take a few more quarters to reach equilibrium [31][32] Question: Expectations regarding the Olympics and its impact? - Management does not expect a significant near-term impact from the Olympics but acknowledges its long-term benefits for the game [35][36] Question: Share count at the end of the quarter? - Management reported approximately 61.8 million shares of common stock at the end of July [37]