Acushnet had a mixed first quarter, hampered by lower sales of Titleist golf clubs and currency headwinds. The company saw its net income drop by 15.9 percent year-on-year to $34.9 million. Revenues fell by 1.8 percent to $433.7 million, but they increased by 1 percent on a constant-currency basis.
The management remained positive, highlighting the growth in Titleist golf balls, led by successful new launches and healthy gains in Titleist gear and FootJoy golf gear.
In Europe, the Middle East and Africa (EMEA), revenues were up by 5.5 percent in constant currencies. In the U.S., they gained 5.1 percent to $230.3 million, but they fell by 2.4 percent in Korea, by 20.1 percent in Japan and by 0.2 percent in the rest of the world on a currency-neutral basis.
Sales of Titleist golf clubs tumbled by 21.9 percent to $91.3 million, weighed down by lower sales of wedges, some putter models and Japan-specific VG3 irons, which were all in their second model year. Those losses were offset by higher sales volumes for the TS drivers and TS fairways. The management pointed out that club sales were also negatively impacted by the timing of the spring putter launch, which generally occurs in the first quarter of odd numbered years, while this year the new Phantom X putters were launched in the second quarter.
Sales of Titleist golf balls advanced by 13.4 percent to $141.7 million, led by a strong performance from new Pro V1 and Pro V1x golf balls introduced during the quarter and AVX golf balls, which were launched in the second quarter of 2018.
Meanwhile, Titleist golf gear climbed by 1.9 percent to $45.2 million, driven by higher sales volumes in the travel gear and golf bag categories. Sales of FootJoy golf gear inched up by 0.2 percent to $141.0 million, due to a volume increase in footwear and higher average selling prices in apparel.
The gross margin contracted by 0.3 percentage points to 51.2 percent. The adjusted Ebitda margin dropped by 2.6 percentage points to 14.8 percent, primarily due to a decrease in income from operations.
The management believes that Titleist and FootJoy products are effectively positioned and merchandised in golf shops and that the company is on track to achieve its goals for 2019. The group maintained its full-year guidance, projecting sales in a range of $1,655 to $1,685 million. They should generate adjusted Ebitda of between $235 million and $245 million.
