The management of Acushnet believes that each of its businesses is has a strong momentum in the new year. In particular, the American golf company controlled by Fila Korea expects that the Kjus brand will continue its rapid progress within golf, benefiting from the launch of a new Gemini rainwear technology, which features a reversible rain jacket to provide the option for both warm and cold weather protection. Acushnet bought the Swiss brand of snow and golf apparel during the third quarter of last year.
Acushnet will also launch its new AVX, Tour Soft and Velocity golf balls in the first quarter, and it is gearing up for the introduction of new Titleist clubs: the Vokey SM8 wedges and Cameron Special Select putters. Titleist Gear will continue to build upon its Linksmaster line of bags by expanding the caddie collection and adding a new series, a classic canvas model. And Footjoy will have a heightened focus on footwear and continue enhancements to its apparel line.
The group’s guidance projects sales of between $1,665 and $1,705 million for this year, including a negative $40 million impact from the coronavirus. They should generate adjusted Ebitda of between $220 million and $240 million
In the past year, Acushnet’s total sales rose by 2.9 percent to $1,681 million, with an increase of 4.8 percent in constant currencie. The gross margin expanded by 0.3 percentage points to 51.9 percent, and adjusted Ebitda rose by 4.0 percent to $240.1 million, indicating an improvement in the adjusted Ebitda margin of 0.2 percentage points to 14.3 percent. Net income increased by 21.2 percent to $121.1 million.
In terms of dollars, the U.S. turnover grew by 7.1 percent, EMEA by 4.9 percent and Korea by 1.0 percent, while Japan declined by 16.4 percent. While golf ball sales increased by 5.3 percent, clubs slid by 2.4 percent, golf gear rose by 2.7 percent and FootJoy inched up by 0.5 percent. No breakdown was given for Kjus, which was acquired during the third quarter, but its addition to the results helped to boost the reported turnover in the EMEA region.
In the fourth quarter of last year, strong U.S. sales and a double-digit increase in the golf ball segment lifted Acushnet’s overall revenues. They jumped by 7.3 percent to $368.3 million, or by 7.9 percent on a constant-currency basis. The gross margin inched down by 0.2 percentage points to 50.7 percent, hit by the U.S. tariffs on China, while the adjusted Ebitda margin jumped by 1.6 percentage points to 13.4 percent. Net income soared by 57.0 percent to $17.9 million.
By region, in constant currencies, revenues progressed by 20.9 percent to $182.5 million in the U.S., thanks to a favorable weather and strong ball sales. They soared by 17.1 percent to $43.8 million in EMEA, with some of the gain attributable to Kjus, and higher sales of golf balls and shoes. Acushnet’s sales were up by 3.0 percent in Korea to $58.2 million, due to an improvement in FootJoy and Titleist glove sales. However, in Japan, where the consumption tax was raised at the end of the third quarter, sales tumbled by 19.7 percent to $48.0 million, with higher ball sales offset by lower club and FootJoy sales.
Overall, sales of Titleist golf clubs declined by 2.2 percent to $109.3 million in the quarter. The newly launched T Series irons, TS hybrids and putters performed well. Sales of Titleist golf balls rose by 10.6 percent to $115.7 million, driven by the Pro V1, Pro V1x and new TruFeel balls. Meanwhile, revenues from Titleist golf gear dropped by 7.9 percent to $23.4 million, due to lower volumes of headwear and golf bags. However, the new Linksmaster bags were well received, and the company is planning to expand the line in 2020. Finally, strong apparel and footwear sales - driven by the Flex and Fury models - sent FootJoy up by 6.3 percent to $84.3 million.
