NYSE$CALY

Callaway Golf Company · Q4 2019 earnings

Q4 2019 earnings · · Investor relations

Briefing

Callaway Golf Company reported a record full year net sales and operating profit in 2019 and provided financial guidance for 2020.

Callaway Golf Company announced record full year 2019 net sales of $1,701 million, a 37% increase compared to 2018. The company also provided financial guidance for 2020, estimating net sales growth of approximately 3% - 5%.

  • Full year 2019 net sales reached $1,701 million, a 37% increase compared to 2018.
  • Full year 2019 operating income was $133 million, a 3% increase compared to 2018.
  • The acquisition of Jack Wolfskin in early 2019 contributed $356 million to net sales.
  • The outbreak of the coronavirus is expected to impact the business in 2020 with regard to sales in Asia and on the supply side.

Headline financials

Total Revenue

$312M

Previous: $181M+72.7%
EPS (adj)

-$0.26

Previous: -$0.32+18.8%
Capital Expenditures

$17.9M

Previous: $10.7M+66.6%
Free Cash Flow

$4.84M

Previous: -$39.3M+112.3%
Net Income

-$29.2M

Previous: -$28.5M-2.5%
Operating Income

-$22.7M

Previous: -$42.6M+46.8%
Gross Profit

$130M

Previous: $70M+86.0%
Cash & Equivalents

$107M

Previous: $64M+66.7%
Total Assets

$1.96B

Previous: $1.05B+86.2%
Stock-Based Comp

$3.42M

Previous: $3.56M-3.8%

Revenue & EPS history

Topgolf Callaway · Revenue · Quarterly

$312M

Q4 2019+72.7%vs Q4 2018
Beat estimate in 12 of 16 quarters(75%)
ActualEstimate

Revenue by segment

Topgolf Callaway · $1.04B total across 3 segments · Q3 2023

  • Topgolf
    $448M+8.2%
  • Active Lifestyle
    $300M+7.7%
  • Golf Equipment
    $293M-1.1%

Forward guidance

The Company estimates full year 2020 net sales growth of approximately 3% - 5%.

Tailwinds

  • Flat to slightly improving overall golf market.
  • Positive mix benefit of the margin-accretive apparel business.
  • Higher golf equipment gross margin associated with this cycle of product launches.
  • Reduction in acquisition-related costs.
  • Reduction in non-recurring expense related to the global warehouse consolidation activities.

Headwinds

  • The coronavirus is estimated to have a negative impact of $25 million on net sales and $13 million on Adjusted EBITDA.
  • Changes in foreign currency effects, which are estimated to have a negative impact of $9 million on net sales and $10 million on Adjusted EBITDA.
  • Incremental tariff expense of $3 million on cost of goods sold and Adjusted EBITDA.
  • Gross margin will be negatively impacted by $5 million in non-recurring costs related to the warehouse consolidation projects in North America, Asia and Europe.
  • Operating expenses will be negatively impacted by $6 million in non-cash costs related to purchase accounting adjustments.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q4 2019

Historical avgQ4 2019

-0.1%

Avg return

Earnings day

-1.6%

Avg return

5 days after

+1.5%

Avg return

30 days after

50%

32 / 64 earnings

Positive

+18.7%

Q3 2013

Best reaction

-20.8%

Q3 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-0.1%+6.3%+0.1%
Q3 2025+14.4%+14.3%+24.2%
Q1 2025-17.2%-11.4%+0.0%
Q4 2024-0.3%-2.5%+3.0%
Q3 2024-11.3%-11.6%-17.1%
Q2 2024-14.5%-18.4%-27.1%
Q1 2024-8.2%-8.0%-7.6%
Q4 2023+5.6%+3.6%-6.3%
Q3 2023-20.8%-22.9%-1.6%
Q2 2023-9.8%-10.6%-12.6%
Q1 2023-13.9%-20.9%-11.4%
Q4 2022-4.0%-1.1%-6.6%
Q3 2022+5.5%+6.2%+23.6%
Q2 2022-2.0%-5.9%-5.8%
Q1 2022+8.1%+18.2%+22.2%
Q4 2021-9.6%-1.7%-10.9%
Q3 2021+2.0%+0.7%-2.9%
Q2 2021-4.2%-11.4%-16.7%
Q1 2021+8.9%+8.6%+14.9%
Q4 2020-2.3%-4.7%-1.6%
Q3 2020+5.5%-2.3%+34.6%
Q2 2020-6.9%-5.7%+2.9%
Q1 2020+2.8%-9.2%+28.4%
Q4 2019-6.7%-3.7%-38.3%
Q3 2019-1.5%-3.5%+1.2%
Q2 2019+10.6%+8.3%+5.3%
Q1 2019-5.2%-5.2%-6.9%
Q4 2018-4.2%-6.6%+3.6%
Q3 2018-2.5%-4.4%-12.3%
Q2 2018+13.1%+13.3%+18.7%
Q1 2018+7.5%+3.2%+13.8%
Q4 2017+3.6%+4.4%+8.8%
Q3 2017+3.4%+1.0%+0.1%
Q2 2017+7.1%+3.5%+9.2%
Q1 2017+7.7%+6.6%+7.8%
Q4 2016-8.4%-7.7%-7.5%
Q3 2016+11.5%+16.0%+18.1%
Q2 2016+0.1%+2.5%+9.3%
Q1 2016-0.6%
Q4 2015+4.6%
Q3 2015+7.5%
Q2 2015+8.0%
Q1 2015+0.6%
Q4 2014+4.9%
Q3 2014+12.1%
Q2 2014-8.5%
Q1 2014-7.7%
Q4 2013-6.4%
Q3 2013+18.7%
Q2 2013+6.1%
Q1 2013+3.7%
Q4 2012+0.2%
Q3 2012-7.6%
Q2 2012+3.7%
Q1 2011-12.2%
Q1 2012+5.5%
Q4 2009-0.3%
Q4 2011-0.3%
Q3 2011+2.0%
Q3 2010+2.0%
Q4 2010-1.4%
Q2 2011-1.4%
Q2 2010-1.4%
Q1 2010+0.6%

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