Acushnet’s first quarter was marked by stability in revenue and profitability, which was well received by the market. Management attributed this performance to steady demand in its Titleist golf equipment and gear segments, supported by new product introductions such as the Pro V1 golf balls and GT Metals line. CEO David Maher highlighted that, despite weather-related slowdowns in parts of Asia and the U.S., the company saw broad-based growth in equipment sales and operational improvements in its gear division. Maher also noted that FootJoy, Acushnet’s footwear brand, experienced a planned decline in sales as the company prioritized premium product mix and reduced closeout volumes.
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Acushnet (GOLF) Q1 CY2025 Highlights:
- Revenue: $703.4 million vs analyst estimates of $698.2 million (flat year on year, 0.7% beat)
- Adjusted EPS: $1.39 vs analyst estimates of $1.36 (2.6% beat)
- Adjusted EBITDA: $138.9 million vs analyst estimates of $136.8 million (19.7% margin, 1.5% beat)
- Operating Margin: 16.3%, in line with the same quarter last year
- Market Capitalization: $4.57 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Acushnet’s Q1 Earnings Call
- Megan Platt (Morgan Stanley) asked about the pause in updated guidance amid tariff uncertainty. CEO David Maher explained that the timing aligns with normal seasonal practices and not with changes in consumer demand, noting, "we feel really positive about our consumer and the structural health of the industry."
- Megan Platt (Morgan Stanley) followed up on tariff mitigation strategies. CFO Sean Sullivan detailed that pricing would be a last resort, with primary focus on supply chain reconfiguration and vendor negotiations to reduce tariff exposure.
- Joe Altobello (Raymond James) questioned the scenario if China’s tariffs moderated. Sullivan responded that a reduction to 50% from 145% would significantly lower the tariff impact, emphasizing the majority of exposure is tied to China.
- Noah Zatzkin (KeyBanc Capital Markets) probed the potential for full supply chain diversification away from China. Maher and Sullivan explained that while complete exit was unlikely, the company’s flexibility enables substantial risk mitigation, particularly for U.S.-bound goods.
- Carlos Gallagher (Jefferies) inquired about demand trends and competition in footwear. Maher stated that early season demand was tracking as expected and that inventory levels were now normalized, with new FootJoy models receiving favorable retailer responses.
Catalysts in Upcoming Quarters
In the coming quarters, our team will focus on (1) the effectiveness of Acushnet’s tariff mitigation efforts and supply chain adjustments, (2) the pace of recovery in Asia’s apparel and footwear markets following recent corrections, and (3) the market reception and sell-through of new product launches, particularly in the Titleist and FootJoy lines. Updates on pricing and further sourcing changes will also be critical to monitor.
Acushnet currently trades at $77.70, up from $64.94 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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