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Callaway Golf (ELY)

Callaway Golf Company is a premium golf equipment and active lifestyle company with a portfolio of global brands, including Callaway Golf, Odyssey, OGIO, TravisMathew and Jack Wolfskin. Through an unwavering commitment to innovation, Callaway manufactures and sells premium golf clubs, golf balls, golf and lifestyle bags, golf and lifestyle apparel and other accessories.

Company profile

Ticker
ELY
Exchange
CEO
Oliver Brewer
Employees
Incorporated
Location
Fiscal year end
Former names
CALLAWAY GOLF, CALLAWAY GOLF CO /CA, CALLAWAY GOLF COMPANY
SEC CIK
Subsidiaries
Callaway Golf South Pacific Pty Ltd. • Callaway Golf Sales Company • Callaway Golf International Sales Company • Callaway Golf Canada Ltd. • Callaway Golf (Shanghai) Trading Co., Ltd. • Callaway Golf (Dongguan) Technology Service Co., Ltd. • Callaway Golf Ball Operations, Inc. • uPlay, Inc. • Callaway Golf (Germany) GmbH • Callaway Golf India Private Ltd. ...
IRS number
953797580

ELY stock data

Analyst ratings and price targets

Last 3 months
Current price
Average target
$33.00
Low target
$30.00
High target
$36.00
Keybanc
Maintains
Overweight
$30.00
12 May 22
Raymond James
Maintains
Outperform
$36.00
11 May 22

Calendar

4 Aug 22
9 Aug 22
31 Dec 22
Quarter (USD) Jun 22 Mar 22 Dec 21 Sep 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 182.9M 182.9M 182.9M 182.9M 182.9M 182.9M
Cash burn (monthly) 22.43M 19.57M (no burn) (no burn) (no burn) (no burn)
Cash used (since last report) 29.97M 26.14M n/a n/a n/a n/a
Cash remaining 152.93M 156.76M n/a n/a n/a n/a
Runway (months of cash) 6.8 8.0 n/a n/a n/a n/a

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Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
1 Aug 22 Brian P. Lynch Common Stock Payment of exercise Dispose F No No 22.98 21,253 488.39K 46,705
1 Aug 22 Brian P. Lynch Common Stock Option exercise Acquire M No No 0 39,371 0 67,958
1 Aug 22 Brian P. Lynch RSU Common Stock Option exercise Dispose M No No 0 39,371.56 0 0
15 Jun 22 Dundon Thomas G. Common Stock Grant Acquire A No No 0 1,180 0 51,493
15 Jun 22 Ogunlesi Adebayo O. Common Stock Grant Acquire A No No 0 1,298 0 83,545
15 Jun 22 Fleischer Russell L Common Stock Grant Acquire A No No 0 1,357 0 38,850
25 May 22 Erik J Anderson RSU Common Stock Grant Acquire A No No 0 5,984 0 5,984
13F holders Current Prev Q Change
Total holders 312 339 -8.0%
Opened positions 34 61 -44.3%
Closed positions 61 49 +24.5%
Increased positions 118 127 -7.1%
Reduced positions 102 83 +22.9%
13F shares Current Prev Q Change
Total value 4.31B 4.75B -9.3%
Total shares 172.57M 170.8M +1.0%
Total puts 3.08M 3.68M -16.4%
Total calls 3.57M 5.11M -30.1%
Total put/call ratio 0.9 0.7 +19.6%
Largest owners Shares Value Change
PEP TG Investments 21.31M $634.47M 0.0%
DDFS Partnership 18.59M $548.86M 0.0%
BLK Blackrock 12.94M $303.04M -0.8%
Vanguard 12.43M $291.09M -0.5%
WestRiver Management 7.45M $212.3M 0.0%
Boston Partners 6.61M $154.34M +26.1%
Sancarin S.L. 4.86M $71.3M 0.0%
GS Goldman Sachs 4.81M $112.62M +10.8%
STT State Street 3.61M $84.46M +4.9%
Allspring Global Investments 3.57M $83.53M -2.7%
Largest transactions Shares Bought/sold Change
Channing Capital Management 3.09M +3.09M NEW
Boston Partners 6.61M +1.37M +26.1%
Norges Bank 0 -1.26M EXIT
MS Morgan Stanley 749.68K -894.89K -54.4%
BK Bank Of New York Mellon 2.7M -885.1K -24.7%
Nuveen Asset Management 2.06M +846.63K +69.7%
Point72 Asset Management 843.64K +843.64K NEW
George Kaiser Family Foundation 2.84M +823.01K +40.9%
Citadel Advisors 1.76M -713.19K -28.9%
Natixis 690.97K +690.97K NEW

Financial report summary

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Competition
BridgestoneAcushnet
Risks
  • A reduction in the number of rounds of golf played or in the number of golf participants could adversely affect the Company’s sales.
  • The Company may have limited opportunities for future growth in sales of golf clubs and golf balls.
  • The Company, including Topgolf, its franchisees and licensees, may face increased labor costs or labor shortages that could slow growth and adversely affect its business, results of operations and financial condition.
  • The COVID-19 pandemic has had, and is expected to continue to have, a material and adverse effect on the Company's business, financial condition and results of operations.
  • Unfavorable economic conditions, including as a result of the COVID-19 pandemic, inflation or otherwise, could have a negative impact on consumer discretionary spending and therefore negatively impact the Company’s results of operations, financial condition and cash flows.
  • A severe or prolonged economic downturn could adversely affect the Company's customers’ financial condition, their levels of business activity and their ability to pay trade obligations.
  • The Company faces intense competition in each of its markets, and if it is unable to compete effectively, it could have a material adverse effect on its business, results of operations, financial condition and growth prospects.
  • The Company’s expanding apparel business, and operation of related retail locations, is subject to various risks and uncertainties, and the Company’s growth and strategic plans may not be fully realized.
  • Topgolf’s growth strategy depends in part on its and its franchisees’ ability to open new venues in existing and new markets.
  • If the Company is unable to successfully manage the frequent introduction of new products that satisfy changing consumer preferences, it could significantly and adversely impact its financial performance and prospects for future growth.
  • The Company’s soft goods and apparel and Topgolf venues businesses face risks associated with changed consumer tastes and preferences and fashion trends.
  • Consolidation of retailers or concentration of retail market share among a few retailers may increase and concentrate the Company’s credit risk, putting pressure on its margins and its ability to sell products.
  • The Company’s business depends on strong brands and related reputations, and if the Company is not able to maintain and enhance the Company’s brands or preserve its strong reputation, including as a result of actions taken by franchisees and licensees, its sales may be adversely affected.
  • International political instability and terrorist activities may decrease demand for the Company’s products and disrupt its business.
  • The Company’s business could be harmed by the occurrence of natural disasters or other emergencies, including the COVID-19 pandemic or other pandemic diseases.
  • The Company’s business and operating results are subject to seasonal fluctuations, which could result in fluctuations in its operating results and stock price.
  • Changes in equipment standards under applicable Rules of Golf could adversely affect the Company’s business.
  • The Company’s sales and business could be materially and adversely affected if professional athletes, celebrities and other endorsers do not endorse or use the Company’s products.
  • Any significant changes in U.S. trade or other policies that restrict imports or increase import tariffs could have a material adverse effect on the Company’s results of operations.
  • The Company has significant international operations and is exposed to risks associated with doing business globally
  • The Company has significant international sales and purchases, and unfavorable changes in foreign currency exchange rates could have a significant negative impact on the Company’s results of operations.
  • Any difficulties from strategic acquisitions that the Company pursues or consummates, including its recent acquisition of Topgolf, could adversely affect its business, financial condition and results of operations.
  • If the Company inaccurately forecasts demand for its products, it may manufacture either insufficient or excess quantities, which, in either case, could adversely affect its financial performance.
  • The Company’s expanding international operations could be harmed if it fails to successfully transition its business processes on a global scale.
  • The Company may not be able to obtain and maintain licenses and permits necessary to operate its Topgolf business and its venues in compliance with applicable laws, regulations and other requirements, which could adversely affect its business, results of operations and financial condition.
  • The Company depends on single source or a limited number of suppliers for some of the components of its products, and the loss of any of these suppliers could harm its business.
  • A significant disruption in the operations of the Company’s golf club assembly and golf ball manufacturing and assembly facilities could have a material adverse effect on the Company’s sales, profitability and results of operations.
  • A disruption in the service or a significant increase in the cost of the Company’s primary delivery and shipping services for its products and component parts or a significant disruption at shipping ports could have a material adverse effect on the Company’s business.
  • Instances of food-borne illness and outbreaks of disease could negatively impact Topgolf’s business.
  • Guest complaints, litigation on behalf of guests or Associates or other proceedings may adversely affect Topgolf’s business, results of operations and financial condition.
  • The costs and availability of finished products, product components and raw materials could affect the Company’s operating results.
  • The Topgolf venues business is susceptible to the availability and cost of food commodities and other supplies, some of which are available from a limited number of suppliers, which subjects Topgolf to possible risks of shortages, interruptions and price fluctuations.
  • The Company may be subject to product warranty claims that require the replacement or repair of products sold. Such warranty claims could adversely affect the Company’s results of operations and relationships with its customers.
  • The Company’s growth initiatives require significant capital investments and there can be no assurance that the Company will realize a positive return on these investments.
  • Some of Topgolf’s products and services contain open source software, which may pose particular risks to its proprietary software, technologies, products, and services in a manner that could harm its business.
  • Failure to adequately enforce the Company’s intellectual property rights could adversely affect its reputation and sales.
  • The Company may become subject to intellectual property claims or lawsuits that could cause it to incur significant costs or pay significant damages or that could prohibit it from selling its products.
  • The Company’s brands may be damaged by the actions of its franchisees and licensees.
  • Sales of the Company’s products by unauthorized retailers or distributors could adversely affect the Company’s authorized distribution channels and harm the Company’s reputation.
  • The Company relies on research and development, technical innovation and high‑quality products to successfully compete.
  • The Company relies on complex information systems for management of its manufacturing, distribution, sales and other functions. If the Company’s information systems fail to perform these functions adequately or if the Company experiences an interruption in their operation, including a breach in cyber security, its business and results of operations could suffer.
  • Cyber-attacks, unauthorized access to, or accidental disclosure of, consumer personally-identifiable information including payment card information, that the Company or the Company's vendors collects through its websites or stores on its servers may result in significant expense and negatively impact the Company's reputation and business.
  • The Company’s Topgolf business is subject to risks associated with leasing property subject to long-term, non-cancelable leases.
  • The Company, including Topgolf and its franchisees and licensees, are subject to many federal, state, local and foreign laws, as well as other statutory and regulatory requirements, with which compliance is both costly and complex. Failure by the Company or Topgolf and its franchisees or licensees to comply with, or changes in these laws or requirements, could have an adverse impact on its business.
  • Regulations related to “conflict minerals” require the Company to incur additional expenses and could limit the supply and increase the cost of certain metals used in manufacturing the Company’s products.
  • The Company could be adversely affected by any violations of economic sanctions laws and regulations, the FCPA, the U.K. Bribery Act, and other foreign anti-bribery laws.
  • The Company is subject to environmental, health and safety laws and regulations, which could subject the Company to liabilities, increase its costs or restrict its operations in the future.
  • Changes in, or any failure to comply with, data privacy laws, regulations, and standards may adversely affect the Company’s business.
  • Changes in tax laws and unanticipated tax liabilities could adversely affect the Company's effective income tax rate and profitability.
  • The Company’s ability to utilize all or a portion of its U.S. deferred tax assets may be subject to limitations.
  • The Company’s obligations and certain financial covenants contained under its existing credit facilities expose it to risks that could materially and adversely affect its liquidity, business, operating results, financial condition and limit the Company’s flexibility in operating its business, including the ability to make any dividend or other payments on its capital stock.
  • The Company may need to raise additional funds from time to time through public or private debt or equity financings in order to execute its growth strategy.
  • Increases in interest rates could increase the cost of servicing the Company’s indebtedness and have an adverse effect on the Company’s results of operations and cash flows.
  • Goodwill and intangible assets represent a significant portion of the Company’s total assets, and any impairment of these assets could negatively impact the Company's results of operations and shareholders’ equity.
  • The Company’s insurance policies may not provide adequate levels of coverage against all claims and the Company may incur losses that are not covered by its insurance.
  • If the Company’s estimates or judgments relating to its critical accounting policies prove to be incorrect, its financial condition and results of operations could be adversely affected.
  • Certain of the Company’s stockholders, if they choose to act together, have the ability to significantly control or influence all matters submitted to stockholders for approval
Management Discussion
  • The Company’s net revenues in the second quarter of 2022 increased $202.1 million (or 22.1%) to $1,115.7 million compared to $913.6 million in the second quarter of 2021. This increase reflects increases in all three operating segments and major geographic regions, as well as the unfavorable impact of changes in foreign currency of $38.6 million. Net revenues by operating segment and major geographic region are presented below (dollars in millions):
  • •The 24.5% increase in net revenues in the United States was primarily driven by growth in the Topgolf business resulting from the opening of new venues, strong walk-in traffic and an increase in event bookings, combined with strong demand for TravisMathew apparel and golf equipment products.
  • •The 16.5% increase in Europe was primarily driven by strong sales of Jack Wolfskin apparel, partially offset by the unfavorable impact of changes in foreign currency.

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