Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Acushnet Holdings Corp (NYSE:GOLF) reported a strong 8% increase in fourth-quarter sales, driven by robust golf equipment sales and double-digit gains in gear.
• The company achieved a 4% constant currency gain in full-year sales, reaching $2.46 billion, with adjusted EBITA increasing by 7.5% to $404 million.
• Titleist golf equipment saw a 7% increase in net sales for the year, with strong performance in both golf balls and clubs.
• The company announced a 9% increase in its quarterly dividend payout for 2025, marking the eighth consecutive annual increase.
• Acushnet Holdings Corp (NYSE:GOLF) is investing in strategic initiatives, including expanding its global fitting network and digital commerce presence, to support future growth.

Negative Points

• FJ sales declined by 2% for the year, with gains in the US offset by declines in international markets.
• The company faces macroeconomic challenges in key regions outside the US, impacting growth prospects.
• Foreign currency headwinds are expected to negatively impact net sales by approximately $35 million in 2025.
• The company did not include potential impacts from new tariffs or retaliatory actions in its 2025 guidance, creating uncertainty.
• The golf footwear market has been correcting, with global sell-through down significantly, impacting the FootJoy segment.

Q & A Highlights

• Warning! GuruFocus has detected 6 Warning Signs with LIND.

Q: What drove the other half of the gross margin improvement year over year, aside from the PTO benefit? A: Sean Sullivan, CFO: The improvement was due to continued performance in the golf equipment segment, growth across all product segments, a more normalized supply chain, and a moderating freight and distribution environment, which allowed for incremental gross margin in Q4.

Q: Can you quantify the investments hitting in 2025, and are they one-time or ongoing? A: David Marr, CEO: While we haven't quantified the exact amount for 2025, some investments will be outsized in 2025 and will normalize in subsequent years. Sean Sullivan, CFO: We expect consistent or expanding gross margins and are building out our global ERP and fitting networks, which will continue but should be closer to completion by 2026 or 2027.

Q: How should we think about the growth between golf balls and clubs in the context of the overall golf equipment guide for the year? A: Sean Sullivan, CFO: We will continue to provide sales information for clubs and balls separately. The Pro V1 launch year will see most growth in balls in the first half, while club business growth will be more weighted to the second quarter due to upcoming launches.

Q: Can you elaborate on the current health of the golf industry in the US versus international markets? A: David Marr, CEO: The US market had a strong year with healthy golfer participation rates. We generally plan for rounds to be flat, with weather impacting the outcome. Internationally, macroeconomic conditions are softer, but we are planning for growth outside the US, driven by new products and market share gains.

Q: How do you view the balance between unit volume and pricing in your organic growth outlook? A: David Marr, CEO: It's a combination of both. We expect unit growth and pricing, particularly on the equipment side. In other business areas like gear and wearables, we anticipate more level volumes with a bit more price increase.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.