On Nov. 15, Topgolf Callaway Golf (NYSE: MODG) hit a 52-week low of $8.23 per share, closing at $8.54. Earlier this week, the company lowered its overall 2024 guidance by approximately $30 million due to what it called “slower market conditions.” That means its Topgolf entertainment division continues to underperform in Wall Street’s eyes. MODG’s stock price has dropped 40 percent YTD.
According to Topgolf Callaway Brands President Chip Brewer, the company continues to believe that “seperating Topgolf from the ‘legacy’ business”’ will maximize shareholder value.
“We are fully engaged on this work,” Brewer told Wall Street analysts.
Topgolf’s Q3 business, Brewer said, “performed roughly consistent with expectations,” down 11 percent. One/Two Bay business was down approximately nine percent. Thee-plus Bay business down approximately 19 percent.
“The One/Two Bay performance was balanced fairly evenly between traffic and spend for the quarter,” Brewer said. “For the full year, we’re holding our previous guidance for same-venue sales to be down very high single digits to low double digits”.
Brewer added that he sees a “steadily weaker” consumer environment – where consumer discretionary (spending) is increasingly under pressure.
“Clearly, Topgolf is being impacted by that.”
On a brighter note, Brewer said November and December bookings for Three-plus Bay events “indicate the potential for some improvement relative to recent Three-Plus Bay trends.”
Wall Street doesn’t hold that same optimism.
MODG in Q3 opened Topgolf venues in Greensboro, N.C., and Des Moines, Iowa. Brewer said it will have 100 owned and operated venues by year’s end. Brewer said MODG plans to build and open five more domestic venues in 2025.
