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Jun 30, 2020
Topgolf Callaway Q2 2020 Earnings Report
Callaway Golf Company experienced a challenging second quarter due to the COVID-19 pandemic, but sales recovered in June, particularly in golf equipment. The company reported a net loss, including an impairment charge related to Jack Wolfskin, but non-GAAP earnings were positive.
Key Takeaways
Callaway Golf Company reported a decrease in net sales for Q2 2020 due to the COVID-19 pandemic, with a net sales of $297 million, a 34% decrease compared to Q2 2019. The company experienced a net loss of $168 million, which included a $174 million pre-tax non-cash impairment charge related to Jack Wolfskin. However, June sales showed a strong recovery, with an 8% increase overall and a 21% increase in the golf equipment business. Non-GAAP net income was $5 million, and non-GAAP earnings per share was $0.06.
Net sales decreased by 34% to $297 million due to COVID-19 impacts.
June sales recovered with an 8% increase, including a 21% increase in golf equipment.
Net loss was $168 million, including a $174 million impairment charge related to Jack Wolfskin.
Non-GAAP net income was $5 million, with non-GAAP EPS at $0.06.
Topgolf Callaway
Topgolf Callaway
Topgolf Callaway Revenue by Segment
Topgolf Callaway Revenue by Geographic Location
Revenue by Segment
Golf Equipment Revenue
CapyFin.comRevenue by Geographic Location
United States Revenue
CapyFin.comEurope Revenue
CapyFin.comAsia Revenue
CapyFin.comRest of World Revenue
CapyFin.com Forward Guidance
The impact of the COVID-19 pandemic on the company's businesses through 2021 remains unclear. The company remains focused on stringent cost management and prudent capital allocation and has suspended its $0.01 quarterly dividend.
Positive Outlook
- Continued improvement expected as regulatory restrictions ease.
- Golf equipment business is recovering quickly.
- Demonstrable pent-up demand to play golf.
- Increase in new and returning golfers.
- Uptick in new orders from consumers and retailers.
Challenges Ahead
- COVID-19 pandemic will continue to negatively impact business.
- Sales headwinds expected through 2021.
- Gross margin pressure expected through 2021.
- Uncertain short-term environment.
- Dividend is not the most effective use of capital at this time.