Callaway Golf’s better-than-expected results have led Standard & Poor’s to upgrade its outlook for the company and its TopGolf subsidiary from negative to stable, while affirming their present credit ratings. Both S&P and Moody’s had been skeptical because of Callaway’s high debt and TopGolf’s losses. With Callaway reporting better sales of golf equipment and apparel, and TopGolf raising its profitability, the debt-to-Ebitda ratio for the consolidated group is now projected by S&P in a range of 4.5 to 5 times for this year as well as 2022, instead of a previous forecast of 8x in 2021 and 6x in 2022. The rating agency expects it to generate growth in sales as well as Ebitda, thanks in particular to Callaway’s pricing power in an environment challenged by inflation and supply constraints.

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