By Ed Travis
There is a danger in reading too much into the financial results of a company over the short term especially a publicly traded company whose management is judged on interim results.
If the company is in a stagnant or slow grow industry, such as golf equipment, growth only comes from “eating the other guy’s lunch.” In other words, in today’s equipment market you can figure increases in sales are often derived from a corresponding decrease in sales of a competing company.
It is brutal, but those are the facts, and especially true in a market where price increases are out of the question. Some club manufacturers have adopted a “value pricing” model, such as Tour Edge with the latest Exotics EXS driver. The line if full of the newest technology, but the retail price of $300 is somewhat lower than more expensive competitors. Cobra has also adopted the lower price point method with its F-MAX Superlite driver, targeted for slower swing speeds retailing for $300. 
Both are excellent high-quality products with performance comparable to their more expensive competitors.
Consumers are clearly being offered a choice, when compared with the larger manufacturers, such as Callaway, with its top selling Rogue model, or Titleist’s TS2/3, both retailing at $500.
Tour Edge is privately held, and Cobra is part of the German multinational Puma but it’s no secret both are experiencing strong sales at least in part using the “more for less” plan for at least some of their club lines.
The golf ball segment of the golf industry continues to be dominated by Acushnet’s Titleist brand with Callaway a distant second followed by TaylorMade and then Bridgestone. Year to date, Acushnet golf ball sales were or $418.9 million were more than three times that of Callaway at $165.5 million.
In their report to investors for the third quarter both companies said they were optimistic golf equipment sales will continue to strengthen, and real growth is possible in the overall market. Sales of equipment are closely tied to the number of golfers, number of rounds they play and economic conditions.
Callaway reported the largest sales in clubs through the third quarter with $798 million. More than double Acushnet’s $333.8 million.
Total sales so far this year for Acushnet are $1.29 billion an increase of almost 7% compared to last year. Their forecast for the entire year is $1.63 billion, which would be a 2.5% increase over fiscal 2017.
Callaway sales for the year, through the past quarter, were $1.06 billion, which is 24% higher than last year. The company’s full year projection of $1.24 billion versus $1.05 billion in 2017, which reflects a 19% increase.
Both Acushnet and Callaway reported higher profits year to date. Callaway nearly doubled last year’s number and Acushnet’s was 10% higher. Callaway is clearly growing quickly and Acushnet less
quickly, but both hold the top spots in a major market segment – Callaway in clubs and Acushnet in balls.
It is important not to over analyze the reported numbers, especially when we have limited information on the other major players such as, TaylorMade, Cobra, Tour Edge, PING and Bridgestone.
It is, however, interesting to study a golf business’ financial status as an indicator of the overall health of the golf industry in general.
