Topgolf Callaway Q2 2020 Earnings Report
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
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.