The world of tariffs remains fluid, but Topgolf Callaway Brands (MODG) and Titleist/FootJoy parent Acushnet Co. (GOLF) each are looking at big numbers to deal with the challenges tariffs are expected to bring (at least for now) the second half of this year.
Topgolf Callaway Brands CEO Chip Brewer, for example, this week told Wall Street analysts during his Q2 conference call that his company’s “best estimate’’ of this year’s impact is now approximately $40 million, up from $25 million this past May.
“This estimate,’’ Brewer said, “is included in our full year guidance, net of our mitigation and cost reduction initiatives, which are, of course, ongoing.’’
Acushnet CFO Seam Sullivan, also during a Q2 conference call with analysts this week, said that his company estimates a tariffs impact of approximately $30 million in the second half of this year.
“We continue to closely monitor developments in the dynamic tariff landscape and broader macroeconomic environment,’’ Sullivan said. “Our mitigation efforts include optimizing our supply chain footprint, vendor sharing programs, selective pricing actions, and cost reduction initiatives such as the VBR (Valid Business Reason) program. As a result, we estimate mitigating greater than 50 percent of the tariff impact in the second half.’’
So, given that there is a certain amount of inflation driven by innovation every year in the overall golf equipment industry – and now tariffs – how much, if at all, will costs be relayed to consumers?
“It’s almost too soon to say, in part, because we’re dealing with rapidly changing rates,’’ Acushnet CEO David Maher said. “But we have seen some pricing action taken – more so to gear, footwear, and apparel than equipment at this stage.
“But (Acushnet) is doing what everybody’s doing and that is, assessing what it means for balance of year and future product introductions, what it means for next year, and how much dexterity do we have within our sourcing and supply chain to mitigate before we take price.’’
