As Callaway Golf (CALY) returns to “pure play,’’ it is implementing what company president/CEO Chip Brewer calls “three fundamental changes that we believe will maximize efficiency and drive long-term improvement in both our share and our margins.’’
“Pure play,’’ basically means that Callaway Golf – having jettisoned 60 percent of Topgolf this past January to Leonard Green & Partners for $1.1 billion – now is focusing on getting back its core golf roots of equipment and apparel. But, Brewer said, that doesn’t mean Callaway will operate in 2026 and beyond the same way it did before it acquired Topgolf (for $2 billion) in early 2021.
“First, we are pulling back on sales of some of our lower-margin categories and channels across the business,’’ Brewer told Wall Street analysts. “Secondly, we’re making incremental investments into our fitting program, an area that is important for us to maintain our leadership position in equipment. And thirdly, we will be making some changes to our launch cadences, taking a longer-term view on a product line that we would have normally launched this fall and extending product life cycles in another.’’
“We’re focusing on the higher octane products and categories that are most profitable and have the highest long-term potential. It’ll include less closeout, off-price, and second-year product. It’s some SKU rationalization, less low-margin products. Some examples here may be range balls, things like that. And then in the second half of the year, we’re making some changes on our launch timing and product cycles. Normally, we have more launches in the second half of the year in the “even’ years.
“We’re making a change this year, which will make that not the case. We’re doing that because we believe that will provide long-term benefits, longer overall life cycles, greater focus, hopefully more impactful launches, again, less closeout, greater efficiency on our launch assets and tooling.
“The excitement in our headquarters in Carlsbad is now palpable as we turn our focus to bring the company vision to life, which is to make the game better for every golfer by being the global leader in innovation, performance, and craftsmanship across premium golf equipment, apparel, and accessories.’’
Brewer, however, warned analysts the changes will have a “negative impact’’ on revenues this year, particularly in the second half, “but should improve our long-term profitability and market share going forward.’’
Wall Street apparently took note of that warning. Callaway stock this morning fell as much as 12 percent in early morning trading from its Feb. 12 close of $14.82. To be fair, DJA and S&P each were down in early morning trading.
Callaway reported a one percent drop in 2025 sales versus ’24 to 2,060 billion,with earnings of $128 million – a 25 percent drop versus ’24.
Callaway Chief Financial Officer Brian Lynch told analysts tha company expects 2026 full year revenue of ,$1.98 billion-$2.05 billion, down slightly at the midpoint versus last year, due to the fundamental changes Brewer highlighted.
“These changes include rationalizing and reducing sales of some of our lower margin categories and channels, and we are also planning to increase product life cycles in certain golf equipment areas, which will impact our financial results in the back half of the year,’’ Lynch said.
Photo: Chip Brewer (Callaway Golf)
