Acushnet, the golf division of Fortune Brands that is up for sale, raised its revenues by 4.7 percent in the first quarter to $370.1 million, but the operating profit slipped by 2.5 percent to $43.3 million. Excluding restructuring and other charges, operating profit fell by 0.5 percent to $43.9 million.
On a comparable basis, excluding foreign exchange changes and the Cobra brand sold in April 2010 to Puma, sales grew by 17 percent and the operating income rose by more than 30 percent. Nearly half the division's sales are achieved outside the U.S.. Results were driven by new products, which resulted in strong growth in each category. Sales of the Titleist brand were sharply higher on very strong initial demand for the new Pro V1 golf balls and 910 metals, while sales of the new DryJoys Tour golf shoes, as well as gloves and performance outerwear, generated robust growth for FootJoy. Comparable sales for Titleist and FootJoy were up by a mid-teen figure in the U.S. and by a high teen figure abroad, driven by South Korea, Japan, the Pacific area and Canada.
Fortune Brands posted net sales of $1,757 million in the first quarter, up 8.1 percent. Operating income was up by 2.6 percent to $160.5 million and the net income attributable to Fortune Brands rose by 12.5 percent to $81.2 million.
Fortune Brands forecasts low single digit growth for each of its three businesses – golf, spirits and home and security – for the rest of the year. For golf, the company expects continued worldwide demand for the Titleist and FootJoy brands. It says that the impact of lower golf activity in Japan will be offset by strong momentum in other markets. The company anticipates to significantly outperform the golf market in 2011 and that comparable operating income for Acushnet will grow at a double-digit rate.
The group continues to study simultaneously whether to spin off or sell the golf business but does not rule out that an announcement could be make in the next one to two months on the disposal of the division. Fortune Brands indicated that industry players, private equity and Asian investors were all interested in the assets.
According to Reuters, Callaway Golf could team up with the investment company Blackstone to bid for Acushnet, which could be worth $800-1,000 million. Final bids for the unit are due to be lodged on May 9. On the basis on the result of the offers, Fortune Brands will decide whether to sell or spin off the golf activity, the news agency said.
