If someone hired Charles Dickens to write a story about the Acushnet and Topgolf Callaway 2024 financial reports, he’d likely call it A Tale of Two Cities.
That’s not to say that for one company it was the best of times and for the other it was the worst of times. Far from it. It’s just that each report tells the stories of these two companies better than any golf writer or financial analyst ever could. They tell the tale of two golf companies (soon to be three): one seemingly stacked with drama, the other steady with progress.
As always, it’s important to read beyond the headlines, dig deep and find out what’s going on. Do that and you’ll find that something that sounds devastating like, oh, I don’t know, a $1.45-billion LOSS for the year, isn’t really a bad thing. You’ll also find out, however, that two straight years of declining sales might be cause for concern for one company’s stalwart divisions.
Before we jump in, we have to state the obvious:
We are not, nor do we claim to be, financial experts, investment counselors or Wall Street-level business analysts. We’re simply golf industry geeks who like to read.
With that out of the way, here are five key takeaways from the 2024 Acushnet and Topgolf Callaway financial reports.
#1: Topgolf Callaway posted how big a loss?
Topgolf Callaway posted net revenues of $4.24 billion in 2024. I don’t care who you are, that’s a lot. It is down slightly, by a little over one percent, from 2023 numbers. Much of that decrease came from an $88-million drop in Active Lifestyle sales.
That said, how in hell did Topgolf Callaway lose – check notes – $1.45 billion for the year?
The short answer is that it didn’t. The long answer can be found in what the finance wizards call a Goodwill and Intangible Asset impairment.
As you well know, Topgolf and Callaway are splitting into two separate companies this year. It is a split rather than a sale or a dump-off as Topgolf Callaway shareholders are getting dollar-for-dollar shares in both the newly independent Callaway as well as Topgolf. Part of that process is squaring goodwill and intangible asset value on the balance sheet.
Callaway paid a premium to merge with Topgolf in 2021. Now that they’re divorcing (amicably, of course), the book value of things like brand recognition and equity, intellectual property, employee talent, market position, customer lists and other intangibles need to be reduced to actual fair market value. It’s a boring accounting thing which is why the annual loss was buried well down in the financial report itself.
If you remove the impairment, Topgolf Callaway posted a $256-million income from operations and a $42-million net income. EBITDA ended the year at $588 million. Companies use EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) to reflect the effectiveness of its sales, marketing and business operations before the finance department does its wizardry.
Income from operations, net income and EBITDA are all down from 2023 but at least that ink is black instead of red.
#2. Acushnet just keeps rolling
Titleist’s parent company, on the other hand, posted a tidy little growth for 2024. Acushnet finished the year with $2.46 billion in sales, a nearly four-percent increase when taking foreign exchange rates into account.
Acushnet is also posting a $214-million net profit for the year. That’s up eight percent over 2023. EBITDA was also up 7.5 percent, at $404 million.
“Titleist golf equipment posted healthy gains, driven by the successful introduction of the GT metals and SM10 wedges and continued ball success,” CEO David Maher told investors last week. “The golf industry is healthy with record rounds of play in the U.S. in 2024, and world rounds up almost 20% over the past five years.”
Titleist club sales topped $721 million in 2024, a 10-percent increase over 2024. The increase is impressive considering that Callaway’s club sales, which topped $1 billion, were essentially flat compared to ’23. As you’d expect, Titleist remains King of the Golf Ball World, totaling over $786 million in ball sales, a four-percent increase globally over 2023.
That’s more than double Callaway’s 2024 ball sales of $321 million. For the record, Callaway says it’s now at its highest golf ball market share ever, 20.6 percent. A decade ago, Callaway’s ball share was under 10 percent.
#3: Both companies have an apparent apparel problem
Topgolf Callaway breaks its business into three units: Topgolf, Golf Equipment and Active Lifestyle. All three businesses have been billion-dollar behemoths on their own but the Active Lifestyle division is sputtering just a tad. Its 2024 revenue did top $1 billion but that’s down eight percent from 2023. Specifically, global apparel sales dropped five percent while Gear, Accessories and Other (bags, hats, gloves, etc.) dropped 12 percent.
That said, Active Lifestyle did turn an $82-million profit in 2024. Unfortunately, that’s down 30 percent from 2023.
Acushnet, on the other hand, is looking at a FootJoy problem. Sales went down for the second straight year with lower sales volumes across all categories, particularly footwear. The decrease was small, only two percent compared to ’23 sales. However, 2023 sales were down 3.5 percent compared to 2022. Volume decreases were partially offset by higher average selling prices.
Titleist Golf Gear, however, was up five percent in 2024. Acushnet says that growth is mostly due to increases in travel product sales as the Club Glove acquisition is now fully integrated into the company’s operations.
Are the downturns just market glitches? The apparel and shoe markets have evolved over the past five years. There are more independent brands, niche companies and startups selling high-quality apparel and footwear today than in 2019. Just like a pack of hyenas taking down a lion, each of those small companies is taking a little bite out of someone’s sales.
Those little bites add up over time.
#4 Preparing for the Callaway-Topgolf split
We’ve known the split was coming since last September, but it is startling to see how the separation is impacting how Topgolf Callaway financials are being presented. Specifically, the 2024 report distinguishes between Topgolf results and “Core Business” results.
Core Business is what Callaway will be going forward which includes the Golf Equipment and Active Lifestyle business units. Together, those units reported sales of just over $2.43 billion in 2024. Topgolf alone accounted for more than $1.8 billion in sales. That’s a nearly three-percent increase over 2023 revenue.
The problem, which ultimately played a key role in the decision to split the companies, is that the increase came exclusively due to the 10 new Topgolf venues that opened in 2024. Year-over-year same-venue sales have been going down for the last two years, offsetting new venue sales. Ultimately, that makes growth unsustainable unless something changes.
Topgolf does remain profitable, with $114 million in black ink in ’24. That’s up five percent over 2023. The company does say same venue sales, while still down year-over-year, did exceed expectations in Q4, as did venue margins, free cash flow and Adjusted EBITDA.
The pending split, of course, led to Topgolf Callaway’s non-cash Goodwill and Intangible Asset impairment. The split is expected to be finalized sometime in early Q3.
#5: Both companies see 2025 as more bear and less bull
Both companies expect to tread water in 2025. Topgolf Callaway, ironically, is a little more cautious than Acushnet in this regard. Topgolf Callaway expects overall revenue to be down slightly in ’25, at a predicted $4 billion to $4.185 billion. That’s down from the $4.24 billion reported in 2024.
Keeping the split in mind, the company predicts Core Business revenue of $2.275 billion to $2.35 billion. That’s down from last year’s $2.43 billion. There’s a wider projection for Topgolf revenue, anywhere from $1.725 billion to $1.835 billion, roughly a $100-million swing. The company still expects same-venue sales to be down but it’s projecting a mid-single-digit drop. That’s a considerable improvement over last year’s result.
Acushnet, on the other hand, predicts sales to reach $2.485 billion to $2.535 billion, anywhere from a 2.5- to 4.6-percent increase over 2024. The company expects new Pro V1 golf balls, Scotty Cameron putters and GT-1 metals to drive that growth. Additionally, the company is expanding its golf equipment and footwear fitting network and has shifted FootJoy manufacturing out of China and into Vietnam.
Both companies cite foreign currency concerns and potential tariffs as performance “headwinds.” Loosely translated, “headwind” is another way of saying “business challenges that are out of our control.”
Acushnet and Topgolf Callaway 2024 financial reports: Final thoughts
To return to our original Dickensian theme, the Acushnet and Topgolf Callaway 2024 financials really are A Tale of Two Cities. Neither city is crumbling but while one continues on a steady and predictable pace, the other is going through what amounts to an amicable divorce.
It’s tempting to characterize Topgolf Callaway as Bleak House (after pulling a David Copperfield and making $1.47 billion disappear) and Acushnet as Great Expectations but neither is accurate. Acushnet will continue running its business in its own measured manner. It does, however, have to take a look at what’s going on with FootJoy. Two straight years of declining sales is not a great trend.
Topgolf and Callaway, on the other hand, should come out of their divorce as viable independent entities. The company has an enviable free-cash position. That’ll help, as will each company focusing on its own business needs.
However, once the dust settles this fall, Callaway will find itself looking up at Acushnet in overall sales. Callaway hasn’t been in that position this decade and if there’s one thing every sled dog knows, it’s this:
If you’re not the lead hound, every view is the same.
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