Acushnet (US:GOLF)2025-05-07 13:30Financial 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 investments in the equipment segment [6][17] - 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] - Titleist golf ball business grew by 4%, with significant gains in the EMEA region [7] - FootJoy sales declined by 5% due to lower closeout footwear sales and targeted product line rationalization [9][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, attributed to poor weather affecting the golf season [11] - Rounds of play in the US were down by 2%, but worldwide rounds were slightly up, particularly in EMEA and the UK [12] Company Strategy and Development Direction - The company is focused on executing a full slate of fitting events across all markets and enhancing product offerings [11] - Acushnet is adapting its supply chain to mitigate tariff impacts, with a focus on regional diversification and vertical integration [12][15] - The company plans to take pricing measures if tariff costs become permanent, but has not yet passed these costs to consumers [16] Management's Comments on Operating Environment and Future Outlook - Management characterized 2025 as a year of stability and improving profitability for FootJoy, with a focus on premium sales [10] - The macro environment remains uncertain due to changing trade policies, leading to a cautious approach in providing full-year guidance [24] - The core consumer remains strong and resilient, with expectations for low single-digit sales growth in the first half of 2025 [26] Other Important Information - The company returned approximately $51 million to shareholders through share repurchases and dividends [23] - Capital expenditures for the first quarter were $11 million, with plans for approximately $85 million in 2025 [22] - 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 changes in consumer demand [30][31] Question: Tariff Mitigation Actions - Management emphasized that pricing is the last resort, focusing first on supply chain adjustments and cost-sharing with suppliers [35][36] Question: Impact of Tariffs on Financials - A significant portion of the estimated $75 million tariff impact is related to China, and management is exploring ways to mitigate this [42][25] Question: Demand Trends in Asia - Management noted a slow start in Japan and Korea due to weather but observed improvement in March and April [45][46] Question: Footwear Market Dynamics - Management expressed confidence in the footwear business, highlighting new product launches and a focus on premium offerings [71][72]