Acushnet, the American golf company controlled by Fila Korea, had a strong finish to the year, with double-digit growth in profits and sales for the fourth quarter. After the re-opening of its production facilities and distribution centers in late May, the company saw strong sales across all segments of its business. The positive momentum it saw in June and July continued throughout the second half of the year, in all categories and geographies.
Overall, sales increased by 14.2 percent to $420.5 million, or by 11.9 percent in constant currencies. U.S. sales jumped by 16.1 percent from the year-ago quarter, driven by a significant increase in demand for golf-related products. International sales progressed by 7.9 percent on a constant-currency basis.
In local currencies, revenues in the EMEA dipped by 1.1 percent to $44.8 million, hurt by lower revenues from the recently acquired Kjus brand of apparel. Japan inched up by 0.2 percent to $49.8 million, with club sales up, but balls and other unallocated products underperforming. Korea climbed by 12.5 percent to $68.4 million and the Rest of World soared by 27 percent to $45.6 million, with gains in all categories.
Titleist golf balls had a sales increase of only 3.1 percent in the quarter to $119.3 million, despite strong demand for the Pro V1 and Pro V1x, due to production delays after a two-month shutdown of the ball manufacturing facilities in the second quarter due to the pandemic. Club sales advanced by 20.8 percent to $132.0 million, driven by the new TSi drivers and TSi fairways, but irons declined because they are in their second model year. Golf gear improved by 24.8 percent to $29.2 million, led by bags, gloves and headwear. FootJoy golf wear was up by 19.3 percent to $100.6 million, thanks to increased average selling prices for apparel and strong glove and footwear sales.
Overall, the group’s gross margin gained 1.7 percentage points to 52.4 percent, and adjusted Ebitda rose by 8.1 percent to $48.1 million. Net income grew by 20.7 percent to $21.6 million.
For the full year, retail store closures caused sales to decrease by 4.1 percent to $1,612.2 million, with declines in all categories. The gross margin was down by 0.4 percentage points to 51.5 percent. Net income fell by 20.7 percent to $96.0 million.
Acushnet did not provide any formal guidance for 2021 due to the continuing Covid uncertainty, but said that it expects sales to be relatively strong in the first half, followed by a weaker second half. Higher freight costs due to recent price increases are expected to lower the gross profit by $8 to $10 million.
The management said it is continuing to invest in manufacturing and distribution, including a $120 million plan to expand ball production over a five-year period. A new North American distribution center in Indianapolis became operational in the fourth quarter.