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Dec 31, 2019
Topgolf Callaway Q4 2019 Earnings Report
Callaway Golf Company reported a record full year net sales and operating profit in 2019 and provided financial guidance for 2020.
Key Takeaways
Callaway Golf Company announced record full year 2019 net sales of $1,701 million, a 37% increase compared to 2018. The company also provided financial guidance for 2020, estimating net sales growth of approximately 3% - 5%.
Full year 2019 net sales reached $1,701 million, a 37% increase compared to 2018.
Full year 2019 operating income was $133 million, a 3% increase compared to 2018.
The acquisition of Jack Wolfskin in early 2019 contributed $356 million to net sales.
The outbreak of the coronavirus is expected to impact the business in 2020 with regard to sales in Asia and on the supply side.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
The Company estimates full year 2020 net sales growth of approximately 3% - 5%.
Positive Outlook
- Flat to slightly improving overall golf market.
- Positive mix benefit of the margin-accretive apparel business.
- Higher golf equipment gross margin associated with this cycle of product launches.
- Reduction in acquisition-related costs.
- Reduction in non-recurring expense related to the global warehouse consolidation activities.
Challenges Ahead
- The coronavirus is estimated to have a negative impact of $25 million on net sales and $13 million on Adjusted EBITDA.
- Changes in foreign currency effects, which are estimated to have a negative impact of $9 million on net sales and $10 million on Adjusted EBITDA.
- Incremental tariff expense of $3 million on cost of goods sold and Adjusted EBITDA.
- Gross margin will be negatively impacted by $5 million in non-recurring costs related to the warehouse consolidation projects in North America, Asia and Europe.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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