Acushnet posted another set of strong results for the third quarter, thanks to strong sales of Titleist golf clubs and balls, particularly the newly introduced AVX premium performance golf balls. The company said that Titleist Pro V1 golf balls continue to lead the field, accounting for 73 percent of balls played on golf tours worldwide during the 2018 season and 71 percent of worldwide wins.
The group's sales reached a total of $370.4 million in the third quarter, up by 6.7 percent from the year-ago quarter and by 7.0 percent in constant currencies. In Europe, the Middle East and Africa (EMEA), revenues improved by 3.8 percent in constant currencies, reaching $41.7 million. They also improved on a currency-neutral basis by 1.8 percent in Japan, by 4.2 percent in Korea and by 1.2 percent in the rest of the world. In the U.S., they gained 10.7 percent to $203.2 million.
Sales of FootJoy golf shoes and clothing inched down by 0.8 percent, weighed down by lower footwear sales, partially offset by an increase in apparel sales.
Sales of Titleist golf clubs jumped by 16.9 percent, driven by higher sales volume for drivers and fairways resulting from the newly introduced TS models launched in the quarter and higher sales volumes and average selling prices for the wedges launched in the first quarter of 2018.
Titleist's revenues from golf balls progressed by 6.0 percent, boosted by strong sales from the new AVX premium performance golf balls launched in the second quarter.
However, the company recorded a decline of 1.3 percent in sales of Titleist golf gear, which the management blamed on lower sales of travel gear, offset by higher sales of Titleist gloves and higher average selling prices across all categories of the gear business.
The company's gross margin advanced by 1.2 percentage point to 51.0 percent, while adjusted Ebitda increased by 18.9 percent to $38.3 million. However, net income dropped by 23.6 percent to $7.1 million, primarily as a result of an increase in income taxes due to an unfavorable tax adjustment of $5.1 million.
For the full year, the group is projecting sales in a range of $1,620 to $1,630 million. They should generate adjusted Ebitda of between $227 million and $233 million.
