The group currently assumes a consumer environment like 20024 and headwinds of approximately $105 million in revenues and $120 million in adjusted Ebitda.
The group intends to offset approximately $100 million in currency fluctuation impact this fiscal year ($60 million impact on revenues, $40 million on profitability) through operational improvements and expense reductions. Strategically, Topgolf Callaway Brands continues to work on a plan to spin-off or sell the venue business in H2 with projected one-time separation costs of $50 million.
In reporting its Q4 and FY24 results, the company offered no further details on the future of Topgolf other than to say it was “making steady progress” on the matter and that “all options are still on the table.” Going forward without Topgolf in the fold, there are plans for further corporate cost cuts and a renewed focus on growing its golf business.
Topgolf sales were essentially flat
Topgolf Callaway reported an operating loss of $1.46 billion versus a loss of $32.6 million in Q4 ended Dec. 31. The net loss was $1.51 million against a loss of $77.1 million as total revenues rose by 3.0 percent to $924.4 million from $897.1 million. Topgolf sales were essentially flat at $439.0 million and generated a 16.5 percent increase in operating income to $26.9 million; golf equipment sales jumped by 12.7 percent to $224.8 million but had a $2.7 million loss; and active lifestyle segment operating income improved 16.8 percent to $23.6 million on a 1 percent revenue gain to $260.6 million.
European sales increased by 1.4 percent to $119.0 million in Q4 while sales in the company’s home US market improved by 1.7 percent to $657.6 million. Revenues generated in Asia rose by 9.8 percent to $123.9 million and jumped by 15.5 percent in Rest of World to $23.9 million. By product, Q4 golf club sales rose by 11.6 percent to $178.8 million and golf ball sales improved by 17.3 percent to $46.0 million. Meanwhile, apparel sales were up by 5.2 percent to $191.3 million.
Golf equipment dipped by 5.0%
For FY24, the operating loss was $1.26 billion against a profit of $237.7 million as total revenues slipped by 3.7 percent to $2.45 billion from $2.54 billion. The net loss was $1.45 billion against a profit of $95.0 million. The Topgolf business realized a 5.0 percent increase in operating income to $114.2 million on 2.7 percent sales growth to $1.81 billion. Golf equipment operating income dipped by 5.0 percent to $183.6 million on flat revenues of $1.38 billion. Active lifestyle annual operating income tumbled 30 percent to $82.4 million on a 7.8 percent sales drop to $1.05 billion.
Regionally, European annual sales declined by 5.5 percent to $511.1 million and contracted by 8.3 percent in Asia to $487.6 million. Elsewhere, US annual sales rose by 1 percent to $3.1 billion and increased by 5.5 percent in Rest of World to $138.1 million.
FY25 Outlook
The group currently assumes a consumer environment like 20024 and headwinds of approximately $105 million in revenues and $120 million in adjusted Ebitda. The full-year consolidated net revenue range is $4.0 to $4.185 billion with a corresponding consolidated adjusted Ebitda range of $415-$505 million.
