Acushnet (GOLF) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $683.9M, down 0.8% year-over-year, but up 0.6% in constant currency; YTD net sales reached $1,391.4M, up 1.1% year-over-year, driven by Titleist Golf Balls gains and strong U.S. market performance.

• Adjusted EBITDA for Q2 2024 was $131.0M (19.2% margin), nearly flat year-over-year; YTD Adjusted EBITDA was $284.7M (20.5% margin), up 2.1%.

• Net income attributable to Acushnet in Q2 2024 was $71.4M, compared to $74.7M in Q2 2023; YTD net income was $159.2M, down from $167.9M year-over-year.

• Titleist Golf Balls and Clubs showed strong momentum, with double-digit ball gains in the U.S. and Japan leading club sales.

• U.S. golf participation remained strong with rounds up 2% YTD, offsetting softness in Europe and Asia due to weather and inventory issues.

Financial highlights

• Q2 2024 gross profit was $371.8M, up from $368.5M in Q2 2023; gross margin improved to 54.4%.

• Q2 2024 Adjusted EBITDA margin was 19.2%; YTD Adjusted EBITDA margin was 20.5%.

• Q2 2024 net income: $71.4M; EPS (diluted): $1.11; YTD net income: $159.2M; EPS (diluted): $2.46.

• SG&A expense rose 2% to $246M, mainly from IT and U.S. distribution costs.

• Inventory declined 22% from Q4 2023 and 14% year-over-year, with improvements across all segments.

Outlook and guidance

• Full year 2024 net sales outlook reaffirmed at $2,450–$2,500M; Adjusted EBITDA expected at $385–$405M.

• Revenue growth expected at 3.2%–5.3% constant currency, but trending toward lower end due to currency headwinds and market conditions.

• Q3 net sales and Adjusted EBITDA expected to be the majority of second half results, driven by new product launches.

• Gross margin profile for the back half expected to be similar to first half, with no significant changes anticipated.

• Management expects sufficient liquidity for at least the next 12 months, supported by cash flows, cash on hand, and available credit.