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What were the key takeaways from Callaway Golf’s earnings call?

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- **Revenue Growth**: Q3 revenue up 3% YoY to $934M, driven by 4% Golf Equipment and 4% Topgolf growth.
- **Tariff Impact**: $12M incremental Q3, full-year $40M. CFO warns 2026 impact could exceed $40M.
- **Topgolf Turnaround**: 1-2 Bay same-venue sales +2.4% Q3, 3+ Bay stabilizing. Food/beverage attach rate improving.
- **Guidance Update**: Full-year EBITDA raised to $490-510M, Topgolf EBITDA $295-305M.
- **Strategic Focus**: Golf Equipment innovation (AI, DSPD products), Topgolf value initiatives (Sunday/Monday pricing), and separation preparation.

**【CEO Summary Section】**
- Total Q3 revenue exceeded expectations, growing 3% YoY to $934 million, driven by 4% growth in Golf Equipment and 4% in Topgolf segments.
- Golf Equipment revenue up 4% YoY ($305M), with gains in clubs (+4%) and balls (+6%). Topgolf revenue rose 4% YoY ($472M), driven by 1% same-venue sales growth and 6 new venues.
- Tariffs added $12M incremental cost in Q3, with full-year impact forecast at $40M. CEO emphasizes strategic cost management and innovation to offset tariff pressures.
- Topgolf achieved positive same-venue sales (1-2 Bay) for first time, up 2.4% Q3, with traffic growth mid-teens. 3+ Bay sales remain down but stabilizing.
- Golf Equipment market share gains, with golf ball US share hitting 22.6% on-course. New products like Elite Triple Diamond driver and Chrome Tour ball receive industry accolades.

**【CFO Financial Commentary】**
- Q3 adjusted EBITDA $115M (-$4M YoY), impacted by $12M tariffs. Golf Equipment operating income $23M (-$4M YoY), Active Lifestyle $14M (-$4M YoY), Topgolf EBITDA $84M (flat YoY).
- Full-year guidance raised: Revenue $3.90-3.94B (+$60M midpoint), EBITDA $490-510M (+$40M). Topgolf revenue $1.77-1.79B (+$40M), EBITDA $295-305M (+$20M).
- Q4 outlook: Revenue $763-803M vs. $810M 2024, EBITDA $13-33M vs. $83M. Headwinds include tariffs, calendar change, and 3+ Bay mix.
- Liquidity strong: $1.25B cash (vs. $861M 2024), net debt $2.23B (-$310M YoY). Free cash flow positive for both businesses.

**【Q&A Highlights】**
- **Golf Equipment Pricing Power**: CEO notes consumer price inelasticity, with differentiated products (e.g., AI-driven drivers) enabling potential price hikes to offset tariffs.
- **Topgolf Trends**: 1-2 Bay traffic up high teens Q3, 3+ Bay stabilizing. Food/beverage attach rate improving, with new menu items and Toast POS system boosting spend per visit.
- **2026 Outlook**: CEO cautious on 2026 tariff impact ($40M+), but optimistic on product pipeline (Chrome Tour ball launch) and Topgolf initiatives (Play More subscription, mobile ordering pilots).
- **Separation Progress**: CEO reaffirms commitment to Topgolf separation, with 3 new venues planned for 2026 and search for Topgolf CEO progressing.
- **Tariff Mitigation**: CFO expects $40M+ tariff impact 2025, with cost savings and pricing actions to partially offset. No further headcount reductions planned beyond 300 already announced.


Topgolf Callaway Brands Corp.(MODG)-20251107-2025 Q3 Earnings call transcript

Golf Clubs

Golf Balls

Apparel

Gear, Accessories and Other

Venues

Other Business Lines

United States

Europe

Japan

Other Foreign Countries

Asia

CALY

CALY fundamentals

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