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01/11 16:21
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture: strong shareholder returns and stable demand are offset by tariff challenges and declining FootJoy sales. The pause in guidance is typical, not demand-driven. Positive factors include strategic supply chain shifts and successful product launches. However, the tariff impact and competitive pressures weigh negatively. Given the market cap and these mixed signals, a neutral stock price movement is likely.
Net Sales $703 million, a 1% increase year-over-year due to growth in Titleist Golf Equipment and Golf Gear segments.
Adjusted EBITDA $139 million, a decrease of $15 million year-over-year due to increased investment in the equipment segment.
Golf Equipment Net Sales Increased almost 4% year-over-year, driven by successful launches of new Pro V1 and Pro V1X golf ball models.
FootJoy Sales Down 5% year-over-year, attributed to lower closeout footwear sales and targeted product line rationalization.
Gross Profit $337 million, down $5 million year-over-year primarily due to higher manufacturing costs in Titleist golf equipment.
SG&A Expense $200 million, decreased almost $1 million year-over-year due to lower retail commission expenses and a decrease in restructuring expenses.
R&D Expense $18.9 million, up $0.4 million year-over-year to support next generation product introductions.
Interest Expense $13.8 million, up almost $1 million year-over-year due to increased borrowings.
Effective Tax Rate 17.9%, down from 21.7% year-over-year, primarily driven by a shift in jurisdictional mix of earnings.
Capital Expenditures $11 million in Q1 2025, with plans for approximately $85 million in 2025.
Shareholder Returns Returned roughly $51 million to shareholders, including $36.6 million in share repurchases and $14.8 million in cash dividends.
Tariff Impact Estimate Approximately $75 million for 2025, with 70% related to China import tariffs.
Inventory Decline Overall inventories declined 7% in Q4 2024 and were roughly flat compared to last year's first quarter.
New Product Launches: Successful launch of new Pro V1 and Pro V1X golf ball models and new hybrids and GT1 metals in the Titleist Golf Equipment segment.
Footwear Models: Initial positive responses to new HyperFlex, Premier, and Quantum footwear models.
Market Growth: Golf equipment net sales increased almost 4% in the quarter, with gains in every region, particularly in EMEA.
Regional Performance: US market up 1%, EMEA grew 4%, while Japan and Korea saw declines of 2% and 4%, respectively.
Operational Efficiency: Acushnet's supply chain is durable and regionally diverse, providing operational flexibility to adapt to tariff dynamics.
Cost Mitigation Plans: Expect to mitigate over 50% of the $75 million gross tariff impact through supply chain adjustments and selective price increases.
Strategic Shift: Relocated footwear manufacturing from China to Vietnam to mitigate tariff exposure.
Investment Strategy: Increased investment in the equipment segment in 2025, impacting adjusted EBITDA.
Tariff Exposure: Acushnet expects a gross impact of approximately $75 million in 2025 due to changing trade policies, with 70% of this related to a 145% import tariff rate from China. The company has diversified its supply chain to mitigate this exposure.
Supply Chain Challenges: The company faces uncertainties in its supply chain due to tariff dynamics, particularly with components sourced from China, Taiwan, and Vietnam. They are taking steps to reroute sourcing and adjust their global supply chain footprint.
Economic Factors: The macroeconomic environment remains highly uncertain, affecting the company's ability to provide full-year guidance. The company is monitoring market conditions closely.
Competitive Pressures: FootJoy sales declined by 5% due to lower closeout footwear sales and product line rationalization, indicating competitive pressures in the footwear segment.
Regulatory Issues: The changing tariff landscape poses regulatory challenges, particularly with the potential for permanent tariffs on products currently subject to temporary rates.
Investment in Equipment Segment: Acushnet has decided to step up investment in its equipment segment in 2025, which is reflected in the adjusted EBITDA decrease.
Supply Chain Diversification: The company has diversified its supply chain to mitigate tariff impacts, with a focus on operational flexibility and regional diversity.
Tariff Mitigation Plans: Acushnet is implementing plans to offset tariff impacts, including adjusting its global supply chain footprint and considering selective price increases.
Product Launches: The successful launch of new Pro V1 and Pro V1X golf ball models and new hybrids contributed to growth in the golf equipment segment.
Focus on Fitting Events: The company is focused on executing a full slate of ball, club, and footwear fitting events across all markets.
2025 Revenue Expectations: The company expects first half sales to be up low single-digits versus the first half of 2024.
Tariff Impact: Acushnet estimates a gross impact of approximately $75 million from tariffs in 2025, with plans to offset over 50% of this impact.
Adjusted EBITDA Outlook: For the first half of 2025, adjusted EBITDA is expected to be down low single digits compared to the first half of 2024.
Capital Expenditures: The company plans to spend approximately $85 million in capital expenditures for 2025.
Shareholder Returns: Acushnet returned roughly $51 million to shareholders through share repurchases and cash dividends.
Quarterly Cash Dividend: $0.235 per share payable on June 20 to shareholders of record on June 6.
Share Repurchases: $36.6 million in share repurchases during Q1 2025.
Remaining Share Repurchase Authorization: $415.5 million remaining under the current share repurchase authorization.
Recent Share Repurchase: Repurchased approximately 936,000 shares for an aggregate of $62.5 million related to the June 2024 share repurchase agreement.
Progress on Magnus Share Repurchase Agreement: Approximately 90% of the $62.5 million target has been repurchased.
The earnings call presents a mixed picture: strong sales growth in key segments and successful product launches are offset by increased tariff impacts, higher expenses, and a significant rise in the effective tax rate. The Q&A section reveals some uncertainties, such as tariff mitigation and unclear guidance on sales growth specifics. Despite positive shareholder returns and stable inventory levels, the overall sentiment remains neutral due to these mixed signals and potential headwinds, suggesting a stock price movement within the -2% to 2% range.
The earnings call reveals positive financial performance with increased net sales and gross profit, alongside improved gross margins. Despite a slight decline in adjusted EBITDA due to strategic investments, the guidance remains optimistic, especially with strong product launches and stabilization in key markets like Japan and Korea. The Q&A section shows management's proactive approach to tariffs and pricing strategies, maintaining customer satisfaction. Shareholder returns are robust, with significant repurchases and dividends, indicating confidence in future growth. Considering the market cap and overall sentiment, a positive stock price movement of 2% to 8% is expected.
The earnings call presents mixed signals. While EPS surpassed expectations and there were positive moves like share repurchases and a strong balance sheet, concerns exist. FootJoy sales declined, and there are uncertainties due to macroeconomic factors and tariffs. The decision to pause guidance adds to the uncertainty. Despite positive aspects like increased golf equipment sales and potential tariff mitigation, the lack of clear guidance and competitive pressures suggest a neutral short-term stock movement.
The earnings call presents a mixed picture: strong shareholder returns and stable demand are offset by tariff challenges and declining FootJoy sales. The pause in guidance is typical, not demand-driven. Positive factors include strategic supply chain shifts and successful product launches. However, the tariff impact and competitive pressures weigh negatively. Given the market cap and these mixed signals, a neutral stock price movement is likely.
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