After a disappointing second quarter, hampered by lower sales of Titlest golf clubs, Acushnet bounced back in the third quarter thanks to a strong performance from new products and the addition of the Kjus brand of premium functional apparel. The net income of the company, which is controlled by Fila Korea, soared to $29.8 million, up from $7.1 million in the third quarter of 2018.
Revenues jumped by 12.6 percent to $417.2 million, or by 13.8 percent on a constant-currency basis, lifted by a contribution of $28.4 million in sales from Titleist irons, hybrids and putters launched during the quarter.
Overall, the growth was fueled by gains in each of the business segments and across all major regions. The new Pro V1 and Pro V1x golf balls proved very popular, and so did the recently launched Titleist T-Series irons. Titleist gear and FootJoy golf wear also performed well.
By region, in constant currencies, revenues soared by 39.3 percent to $55.7 million in Europe, the Middle East and Africa (EMEA), with about half of the gain attributable to Kjus, the Swiss ski and golf apparel brand that the company acquired this summer (SGI Europe Vol. 30 N° 25+26 of Aug. 1, 2019), and higher sales volumes for Titleist golf clubs. The company did not provide a detailed breakdown of the segment.
Acushnet’s sales were up by 27.6 percent in Japan and by 18.4 percent in South Korea, both on a constant currency basis. In the U.S., they gained 6.2 percent to $215.7 million, driven by higher sales of Titleist golf clubs golf balls and gear. In particular, PG Golf, which the group acquired in the fourth quarter of 2018, performed well.
Overall, sales of Titleist golf clubs were down by 28.1 percent to $126.8 million, driven by the newly launched T Series irons, TS hybrids and putters and higher average selling prices.
Sales of Titleist golf balls inched down by 0.7 percent to $120.9 million, as the addition of PG Golf’s sales and higher sales volumes for the new Pro V1 and Pro V1x golf balls were offset by declines in AVX models and performance golf balls, which were in their second model year.
Meanwhile, revenues from Titleist golf gear climbed by 13.4 percent to $34.6 million, with volume increases across all categories. The new Linksmaster bags were well received, and the company is planning to expand the line in 2020.
Finally, apparel gains in both men’s and women’s outerwear collections and strong footwear sales driven by the Flex and Fury models sent FootJoy up by 2.4 percent to $102.6 million.
Acushnet’s gross margin improved by 1.1 percentage points to 52.1 percent, while the adjusted Ebitda margin jumped by 3.0 percentage points to 13.4 percent.
The group narrowed the range of its full-year guidance, projecting sales of between $1,660 and $1,680 million, compared with $1,655 to $1,685 million in the previous forecast. They should generate adjusted Ebitda of between $237 million and $243 million.
