Topgolf Callaway Brands (NYSE: MODG) reports Q3 nine-month revenue at $3.4 billion, a nearly seven percent increase compared to the same period in 2022. YTD earnings drop 25% to $231 million.
On Nov.8, however, it revised its full-year g $4.235B- $4.260B (consensus of $4.41B) compared to previous guidance of $4.430B to $4.470B. The revised guidance caused Topgolf Callaway Brands stock today to dip to a 52-week low of $10.11 in early morning trading
Topgolf Callaway Brands President/CEO Chip Brewer said the company is “taking decisive action” to both costs, and capital expenditures and to drive additional synergies.
“All of this is aimed at de-risking future performance while maintaining our strong growth prospects,” Brewer said. “We remain on plan to deliver positive free cash flow for the total company and Topgolf this year and we are confident that we will continue to profitably grow our business this year and going forward.”
Golf equipment revenue declined one percent to $293 million, primarily due, according to the company, to an expected shift in equipment launch timing from Q3 to Q4 this year, softness in Asia, and a five percent decline in golf ball sales. The decline on ball sales, according to company CFO Brian Lynch, was due to the retail channel inventory catch-up in golf balls in Q3 2022.
Golf equipment operating income was $35 million, a decrease of $14 million compared to the prior year, due, Lynch said, due to less launch products in Q3 this year versus last year, a return to normal promotional levels, and lower production volumes this year versus 2022 and thus, less fixed cost absorption.
Topgolf revenue increased eight percent to $448 million, driven by the addition of nine new venues since Q3 2022 and partially offset by a decline of approximately three percent in same-venue sales during the quarter. Topgolf segment operating income increased 65 percent yearly to $39 million.
