Sign in

You're signed outSign in or to get full access.

AH

Acushnet Holdings Corp. (GOLF)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $703.4M, up 1.2% constant currency and modestly above S&P Global consensus of $697.7M*, driven by Titleist equipment and Golf Gear strength . Diluted EPS was $1.62, up 20% YoY; S&P’s Primary EPS actual was $1.3922 vs $1.318 consensus*—a beat, aided by a $20.9M non-cash gain from the FootJoy shoe JV deconsolidation .
  • Adjusted EBITDA of $138.9M declined 9.6% YoY (margin 19.7% vs 21.7% LY) as the company stepped up investment in Equipment and faced FootJoy softness; note S&P’s EBITDA basis shows $127.96M actual vs $136.78M estimate* (definition differs from company’s Adjusted EBITDA) .
  • Management maintained full-year guidance issued in February (Net Sales $2.485–$2.535B; Adj. EBITDA $405–$420M) pending tariff clarity; Q1 call framed 1H sales up low-single digits and a ~$4M tariff impact in Q2 .
  • Near-term stock narrative: product cycle momentum (new Pro V1/V1x, GT metals) vs tariff/macro uncertainty; incremental FX tailwind for Q2–Q4 “north of $20M” vs prior year if rates persist .

What Went Well and What Went Wrong

What Went Well

  • Titleist equipment grew 2.2% reported (3.8% cc) on strong new Pro V1/V1x and GT drivers/hybrids/fairways; Golf Gear up 2.2% (3.9% cc) with pricing leverage .
  • U.S. net sales rose 1.4%, EMEA up 2.2%, with broad-based gains; CEO: “a solid start…positive responses to new Pro V1 and continued momentum in…GT drivers” .
  • Management highlighted resilient participation and rounds, especially EMEA/U.K. (+15%); “our teams are focused on…making the right long-term-based decisions while we navigate this period of tariff uncertainty” .

What Went Wrong

  • FootJoy golf wear down 6.6% (4.9% cc) on lower footwear/apparel volumes; Asia apparel weakness continued, particularly Korea super-premium correction .
  • Gross profit fell $5.2M YoY; Adjusted EBITDA declined $14.8M YoY and margin compressed to 19.7% from 21.7% YoY; CFO cited higher manufacturing costs in Titleist equipment and increased promotional/selling investments .
  • Cash from operations was negative ($120.3M) in Q1 due to working capital seasonality; management reiterated cautious stance given evolving tariff regime (gross 2025 impact estimate ~$75M, with >50% mitigation targeted) .

Financial Results

Actuals vs Prior Periods

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$707.6 $445.2 $703.4
Diluted EPS ($USD)$1.35 $(0.02) $1.62
Adjusted EBITDA ($USD Millions)$153.7 $12.4 $138.9
Adjusted EBITDA Margin %21.7% 2.8% 19.7%
Gross Profit ($USD Millions)$342.4 $207.7 $337.2
Income from Operations ($USD Millions)$121.4 $(5.2) $114.5

Actuals vs S&P Global Consensus (Q1 2025)

MetricActualConsensusResult
Revenue ($USD Millions)$703.4 $697.7*Beat
Primary EPS (S&P) ($USD)$1.3922*$1.318*Beat
EBITDA (S&P) ($USD Millions)$127.96*$136.78*Miss (note basis differs from company Adj. EBITDA)

Values marked with * retrieved from S&P Global.

Segment Net Sales (Q1 2025 vs Q1 2024)

SegmentQ1 2024 ($M)Q1 2025 ($M)YoY %Constant Currency YoY %
Golf balls$208.0 $213.3 2.5% 4.0%
Golf clubs$203.9 $207.8 1.9% 3.5%
Titleist golf equipment (total)$411.9 $421.1 2.2% 3.8%
FootJoy golf wear$191.1 $178.4 (6.6)% (4.9)%
Golf gear$69.5 $71.0 2.2% 3.9%

Regional Net Sales (Q1 2025 vs Q1 2024)

RegionQ1 2024 ($M)Q1 2025 ($M)YoY %Constant Currency YoY %
United States$418.2 $424.2 1.4% 1.4%
EMEA$101.7 $103.9 2.2% 4.4%
Japan$37.2 $35.2 (5.4)% (2.4)%
Korea$75.3 $66.2 (12.1)% (3.9)%
Rest of World$75.2 $73.9 (1.7)% 2.0%

KPIs and Capital Allocation

KPIQ4 2024Q1 2025
Cash from Operations ($USD Millions)—$(120.3)
Inventories ($USD Millions)$576.0 $538.1
Capex ($USD Millions)—$11.3
Dividend per share ($USD)$0.235 declared for Mar 21, 2025 $0.235 declared; payable Jun 20, 2025
Share repurchases (shares/$)442,867 shares; $30.0M (Q4) 540,944 shares; $36.6M (Q1)
Magnus repurchase ($)Authorization agreed Dec 2024 $62.5M repurchased Apr 10, 2025; ~936K shares
Effective tax rate—17.9%
Net leverage ratio—~2x (trailing average net debt)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Net SalesFY 2025$2.485–$2.535B (reported); +2.6%–4.6% cc No updates given Q1; awaiting tariff clarity Maintained
Adjusted EBITDAFY 2025$405–$420M No updates Maintained
FX impactFY 2025Prior plan assumed ~$35M headwind If rates persist, Q2–Q4 tailwind “north of $20M” vs prior year; net ~$8M for FY Potential tailwind
Tariff impactFY 2025Not reflected in Feb outlook Gross impact ~$75M in 2025; >50% mitigation targeted New headwind; mitigation plan
1H sales growth1H 2025—Up low-single digits YoY; Q2 tariff impact ~$4M New color
DividendQ2 2025$0.235 declared (Q1) $0.235 payable Jun 20, 2025 Maintained
Share repurchase2025Board add’l $250M authorization in Feb; $1.25B since 2018 $36.6M repurchased in Q1; $62.5M Magnus tranche in Apr; $415.5M remaining as of Mar 31 Ongoing execution

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Tariffs/macroGlobal tariff risk noted; outlook did not include import tariffs Gross impact ~$75M in 2025; ~70% tied to China at 145%; >50% mitigation in 2025; potential full mitigation by 2026 Heightened uncertainty; structured mitigation underway
Supply chain diversificationDistribution/IT optimization underway; footwear JV transition Clubs: rerouting heads to U.S. from non-China; footwear moved to Vietnam; glove facility in Thailand; ball plants in MA supplying U.S. Increasing agility and regionalization
Product cycle/performanceGT drivers/fairways launched; SM10 wedges; ball momentum New Pro V1/V1x, GT hybrids, Scotty Cameron putters; equipment and gear growth Strong cycle sustaining
Regional trendsQ4: U.S./EMEA strength; Japan weakness; Korea mixed U.S., EMEA growth; Japan/Korea softness early due to weather; apparel/FootJoy weaker Mixed; Asia apparel correction continues
Footwear/apparelFootJoy down; restructuring and line rationalization FootJoy sales −5% (closeouts down; rationalization); new models well received Profitability over volume; premium mix rising
FX2025 plan assumed ~$35M headwind Q1 ~$12M headwind; Q2–Q4 tailwind >$20M vs PY if rates persist Improving
Capital allocationDividend increase to $0.235; new $250M buyback authorization Q1 repurchases $36.6M; Apr Magnus $62.5M; dividend declared; leverage ~2x Continued returns; liquidity strong
R&D and investmentOngoing investment in IT/distribution R&D up to $18.9M; increased advertising/promo and fitting network investment Elevated spend to support cycle

Management Commentary

  • CEO: “2025 is off to a good start with constant currency sales growth driven by the positive responses to new Pro V1 and Pro V1x…continued momentum in Titleist golf clubs led by…GT drivers, fairways and hybrids” .
  • CEO on tariffs and supply chain: “the company's supply chain is durable and regionally diverse…vertical integration…provides…control and agility” and “we expect to mitigate a good portion of the current tariff impact by end of the year” .
  • CFO: “Adjusted EBITDA was $138.9 million, a decrease of 9.6%…as we continue to invest in key strategic initiatives…recognized a noncash pretax gain of $20.9 million” (FootJoy JV deconsolidation) .
  • CEO on consumer/rounds: “we project that total worldwide rounds of play were up slightly…EMEA and the U.K., up 15%” .

Q&A Highlights

  • Guidance posture: Management reiterated typical cadence—no Q1 updates; reiterated 1H low-single-digit sales growth with stable consumer purchasing; clarity expected post-Q2 .
  • Tariff mitigation: Pricing is “last lever”; primary actions include sourcing shifts (clubs away from China for U.S. assembly), supplier cost programs, and selective price moves if needed .
  • Tariff sensitivity: Of the ~$75M gross impact, “70% or more…related to China” at 145%; if rate fell to 50%, impact would drop ~two-thirds of that China portion .
  • Asia demand: Weather-related slow start; March/April improved; continued watch-out in super-premium apparel in Korea; balls/clubs trends positive .
  • FX: Q1 headwind ~$12M vs PY; potential Q2–Q4 tailwind “north of $20M” vs PY, net ~$8M for FY .
  • FootJoy dynamics: New models well received; fewer closeouts and product rationalization support profitability; inventories “proper level” at season start .

Estimates Context

  • Revenue beat: $703.4M actual vs $697.7M consensus*—small positive surprise .
  • EPS beat: S&P Primary EPS $1.3922 actual vs $1.318 consensus*; company diluted EPS $1.62 included a $20.9M non-cash gain .
  • EBITDA: On S&P’s basis, $127.96M actual vs $136.78M consensus* (miss), while company-reported Adjusted EBITDA was $138.9M; differences reflect non-GAAP adjustments and methodology .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Titleist product cycle remains a core driver; expect continued equipment/gears momentum into peak season, supporting top-line resilience .
  • FootJoy is in a year of stabilization with premium mix improvement; near-term sales may lag but margin trajectory should improve as closeouts diminish and lines rationalize .
  • Tariff uncertainty is the biggest swing factor; monitor policy changes on China rates and timing of mitigation actions (club component rerouting, supplier cost programs, selective pricing) .
  • FX setup improving versus prior plan; if rates persist, incremental tailwind for Q2–Q4 vs prior year can cushion tariff/margin pressure .
  • Working capital seasonal build drove negative CFO in Q1; inventory drawdown and peak-season sell-through should normalize cash conversion in coming quarters .
  • Capital returns remain robust (dividend, buybacks incl. Magnus repurchase) with leverage ~2x; provides downside support while management refrains from updating guidance until visibility improves .
  • Trading setup: watch Q2 color on sell-through, tariff path, and any pricing moves; medium-term thesis hinges on product leadership, supply chain agility, and execution on tariff mitigation to defend margins .