Acushnet's sales for the fourth quarter advanced by 6.6 percent from the corresponding period of 2016 to $351.4 million, with a 6.4 percent increase in constant currencies and steady growth across all continents. Most of the growth was driven by Footjoy and Titleist golf balls and gear, offset by a slight decline in sales of Titleist golf clubs.
While the first half of 2017 had fallen short of the management's expectations, the business bounced back in the second part of the year, with solid momentum that should carry on into 2018, according to the management.
Revenues were up by 3.3 percent in the U.S., and they jumped by 17.6 percent in Europe, Middle East and Africa (EMEA), with growth of 10.4 percent on a currency-neutral basis. In local currencies, sales rose by 9.4 percent in South Korea as well as in Japan, and by 7.2 percent in the rest of the world.
Sales of FootJoy golf shoes and clothing improved by 14.6 percent with and without currency effects, driven by the Pro SL shoe and the recently-introduced DNA Helix series. FootJoy's fall apparel collection and new LTS performance outerwear also posted healthy gains in the quarter.
However, sales of Titleist golf clubs inched down by 1.5 percent, or by 1.0 percent in constant currencies, despite higher sales volumes. The management noted that this quarter came after last year's launch of the 917 driver. It edded that the business is building positive momentum, partly due to the recent launch of the Titleist AP3 iron and the Vokey SM7 wedge.
Titleist‘s revenues from golf balls were up by 9.5 percent, or by 8.7 percent on a currency-neutral basis, boosted by the Pro V1 and Pro V1x models, which had an especially strong quarter, performing well during the holiday season despite heavy promotional activity from all competitors in November and December. The company also recorded an increase of 4.4 percent, or 4.1 percent on a currency-neutral basis, in sales of Titleist golf gear.
Acushnet's gross margin inched down by 0.1 percentage point to 50.8 percent, while the adjusted Ebitda margin remained flat at 11.6 percent. Net income stood at $11.7 million, against a net loss of $0.2 million for the fourth quarter of 2016, primarily as a result of higher income from operations, offset in part by higher income tax expenses.
For the full year, sales were down by 0.8 percent to $1,560 million, or by 0.2 percent in constant currencies. FootJoy and Titleist gear were the top gainers. The adjusted Ebitda margin was down by 0.2 percentage points to 14.3 percent. Net income improved by a whopping 104.7 percent to $92.1 million as a result of lower interest expenses and higher income from operations, boosted by the fact that Acushnet had incurred extra costs related to its IPO in 2016.
For 2018, Acushnet is projecting higher sales in the range of $1,590 million to $1,620 million, generating flat adjusted Ebitda in a range from $225 million to $235 million.
