The American golf company controlled by Fila Korea bounced back in the third quarter, with profits more than doubling compared with the year-ago quarter. Acushnet also witnessed a recovery in sales after lockdowns eased and demand for golf products picked up again as players returned to the golf courses.
Following the re-opening of its production facilities and distribution centers in late May, the company has seen strong sales across all segments of its business, especially golf balls. The positive momentum it saw in June and July continued throughout the third quarter. In particular, the management highlighted the successful launch of its new Titleist Tour Speed golf ball in August.
Overall, third-quarter sales increased by 15.7 percent to $482.9 million, or by 15.1 percent in constant currencies, due to increased sales of Titleist golf balls, FootJoy golf wear and Titleist golf gear.
In constant currencies, EMEA sales gained 13.6 percent, with higher sales across all segments. In Korea, revenues progressed by 10.4 percent, driven by increased sales of golf wear, golf gear and balls. In the rest of world, the growth reached a level of 21.5 percent in constant currencies, due to a good performance in balls and golf clubs, although net sales decreased in Japan due to weak club revenues.
Titleist’s total sales of golf balls rose by 40.1 percent, driven by higher sales volumes across all models. Sales of golf gear jumped by 28.0 percent, thanks to volume increases in golf bags, golf gloves and headwear.
However, clubs declined by 4.7 percent, primarily due to lower revenues from metalwoods as a result of lower average selling prices and lower sales volumes for TS metals which were in their second model year, and the group’s decision to delay the launch of the new TSi metals, and lower sales volumes of hybrids and irons. This was partially offset by higher sales volumes for SM8 wedges, introduced in the first quarter of 2020.
FootJoy rose by 13.1 percent, driven by sales volume increases in golf gloves and footwear product categories.
Overall, the group’s gross margin inched up by 0.1 percentage point to 52.2 percent, and adjusted Ebitda jumped by 77.8 percent to $99.2 million, indicating a gain in the adjusted Ebitda margin of 7.1 percentage points to 20.5 percent. Net income soared by 112.1 percent to $33.4 million.
Due to the uncertainty related to Covid-19, the company has withdrawn its 2020 guidance. It announced the launch this week of new products including Titleist TSi drivers and fairway metals, while FootJoy is set to introduce all new Stratos and Premiere footwear lines over the next few months.
