Acushnet’s operating income increased by 20 percent to $106.5 million from $88.5 million in Q2 as the Titleist, FootJoy, and Kjus parent achieved 4.7 percent revenue growth to $689.4 million from $658.6 million for the period ended June 30. Net income was 12.3 percent at $74.7 million versus $66.5 million as the group’s adjusted Ebitda increased by 24 percent to $132.1 million, and the adjusted Ebitda margin jumped 300 basis points to 19.2 percent. Lower year-over-year freight costs contributed to a 130-basis point improvement in gross margin to 53.5 percent.
Results benefitted from strong results in its home U.S. market and from its golf ball and club segments. Conversely, Acushnet reported lower year-over-year sales in the EMEA, Japan, and Korea and in its FootJoy footwear business. U.S. sales increased by 14.2 percent to $401.4 million as the region realized a 5.5 percent gain in H1 golf rounds played despite dips in play on the West Coast and in New England. Period sales were down by 5.1 percent in the EMEA to $86.1 million, off 9.4 percent in Japan to $32.8 million, and declined by 7.8 percent in Korea to $86.6 million. Rest of World sales in Q2 rose by 10.5 percent to $82.5 million. Management commented that poor weather likely contributed to lower rounds played in the key markets of the U.K., Korea, and Japan.
On the product front, the company saw Titleist constant-currency ball sales bounce 20 percent higher in Q2 to $237.6 million, with growth in all global regions. Supply chain constraints on its ProV1 and ProV1 X models remain despite production facilities operating at peak capacity. Acushnet expects to catch up with the ball demand by the end of Q3 or the start of Q4. Meanwhile, golf club sales increased by 16.3 percent on a constant-currency basis to $188.0 million. Titleist will begin shipping its new T Series irons late this month. Titleist gear sales increased by 2.9 percent to $69.9 million.
Meanwhile, despite having a sales volume that was 30 percent larger than in the same 2019 period, FootJoy footwear sales declined by 9.5 percent on a constant-currency basis to $158.2 million. It’s likely to take a couple more quarters before elevated retail inventory levels of golf shoes return to historic levels, the company said.
Acushnet, which intends to raise its advertising and promotion spend and make further infrastructure investments in its ball and club segments in H2, has raised its FY23 outlook. The consolidated net sales range is now $2.35 to $2.40 billion, up 1.1 percent from prior guidance, and the FY adjusted Ebitda outlook range was moved from 2.7 to 2.9 percent, from $355 to $375 million.
