“Over the longer-term, I think we have a plan to move out of China in certain aspects of our business,” CEO David Maher said.
Acushnet, the Titleist and FootJoy parent, is cautiously optimistic about its outlook thanks to new product launches and the health of the core golfer market. US rounds were down by 2 percent in Q1, but total worldwide rounds played rose slightly and were led by “a nice start” in the EMEA and 15 percent growth in the UK.
But the group, while acknowledging its need to navigate the tricky tariff landscape in the months ahead, declined to provide any further update to its FY25 outlook. In late February, Acushnet estimated an annual sales range of $2,485-$2,535 million and a full-year adjusted Ebitda range of $405-$420 million, exclusive of any import tariffs by the US and potential retaliatory actions by other countries.
In Q1 ended March 31, operating income dipped by 5.6 percent year-over-year to $114.5 million from $121.4 million on essentially flat sales of $703.4 million versus $707.6 million. Adjusted Ebitda tumbled by 9.6 percent to $138.9 million.
Net income attributable to the company rose by 13.2 percent to $99.4 million, primarily related to a non-cash, pre-tax gain of $20.9 million related to the deconsolidation of a FootJoy joint venture. A gross margin decline of 50 basis points to 47.9 percent was related to higher manufacturing costs for Titleist equipment and lower net sales of FootJoy golf wear.
EMEA sales improve
The EMEA had the largest revenue increase of any geography in Q1, rising by 4.4 percent on a constant-currency basis to $103.9 million. The gain was attributed to higher net sales across all product segments, primarily Titleist golf equipment and Golf gear.
Elsewhere, US sales grew by 1.4 percent to $424.2 million and fell by 2 percent and 4 percent in Japan and Korea to $35.2 million and $66.2 million, respectively due to poor weather conditions early in the year.
Product sales breakdown
Golf ball sales rose by 4.0 percent on a constant-currency basis to $213.3 million with a “significant contribution: from the EMEA. Golf club sales increased by 3.5 percent to $207.8 million. Titleist golf equipment sales rose by 3.8 percent to $421.1 million, and FootJoy golf wear sales slipped by 4.9 percent to $178.4 million.
Tariff, supply chain talk
Acushnet currently estimates its total tariff impact in 2025 at $75 million, with approximately 70 percent related to the China import tariff rate of 145 percent but expects to offset more than 50 percent of that cost. Company actions underway include further adjustments to its global supply chain footprint, starting cost and productivity programs internally and externally with suppliers, and selective price increases.
CEO David Maher told analysts that Acushnet produces approximately two-thirds of golf balls in the US with a Thailand factory supplying Pro V1 models to all other regions. The golf ball segment has small exposure to tariffs due to China-source raw materials, a factor scheduled for mitigation by year-end.
The company’s primary golf club exposure, China-sourced clubheads shipped into the US, will see the Head manufacturing shifted to international facilities with the US receiving components sourced in Taiwan, Vietnam, and the US.
“Over the longer-term, I think we have a plan to move out of China in certain aspects of our business,” Maher commented.
