Acushnet (US:GOLF)2023-08-05 19:50Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2023 was $132 million, a 24% increase year-over-year, while first half sales reached $1.376 billion, up almost 12% [2][16] - Interest expense increased to $11 million in the quarter, up $9 million due to higher borrowings and interest rates [5] - Effective tax rate in Q2 was 21.8%, up from 19.1% last year, primarily due to a shift in jurisdictional earnings [5] Business Line Data and Key Metrics Changes - Titleist golf balls saw a 20% increase in sales for both Q2 and the first half, driven by a successful Pro V1 launch [88] - Titleist golf clubs sales increased over 16% in both Q2 and the first half, with strong performance from TSR drivers and Scotty Cameron putters [89] - FootJoy revenues were down 9% in the quarter, reflecting declines in golf footwear sales due to elevated marketplace inventory levels [13] Market Data and Key Metrics Changes - In the U.S., approximately 250 million rounds of golf were played in the first half, a 5.5% increase compared to last year [3] - Japan's sales were up 4%, Korea was flat, and EMEA finished down 2%, with weather-related headwinds affecting performance [14] Company Strategy and Development Direction - The company plans to increase advertising and promotion investment in the second half of the year to capitalize on growth opportunities [92] - A five-year $120 million capital investment plan is in place to enhance golf ball operations and R&D [92] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the golf market, noting strong participation and engagement from dedicated golfers [60][62] - The company has raised its net sales guidance for 2023 to a range of $2.35 billion to $2.4 billion, reflecting positive momentum in golf ball sales [19] Other Important Information - The company returned approximately $167 million to shareholders in 2023, including $140 million in share repurchases and $27 million in dividends [95] - The adjusted EBITDA guidance has been increased to $355 million to $375 million, up from $345 million to $365 million [96] Q&A Session Summary Question: What is driving the strength in the golf ball and club categories? - Management noted that strong overall industry conditions and market share gains are contributing to the success in both categories [105] Question: How is the company addressing supply constraints in the Pro V1 line? - Management indicated that while production facilities are operating at peak capacity, supply constraints for Pro V1 and Pro V1x are still present due to strong demand [24][106] Question: What is the outlook for the FootJoy segment given current inventory levels? - Management tempered expectations for FootJoy due to elevated marketplace inventories in the footwear category, expecting it to take a few quarters to return to healthier levels [13][96] Question: How does the company view the health of the core golf consumer? - Management expressed confidence in the core consumer's engagement, noting that participation levels remain strong despite macroeconomic pressures [60][62] Question: What are the company's plans for share repurchase? - Management stated that approximately $260 million remains under the current share repurchase authorization, with expectations to continue meaningful participation into Q4 [78][95]