From staff and wire reports
CARLSBAD — Despite massive economic upheaval in most industries due to the COVID-19 pandemic, Carlsbad-based Callaway Golf Co. today reported record net sales and earnings for the third quarter.
“The world is embracing golf in a way that has led to a record quarter for the industry and our company,” said Chip Brewer, Callaway’s president and CEO. “Our golf business is now experiencing unprecedented demand and our soft goods business is recovering significantly more quickly than we expected; our third quarter results reflect this momentum,” he said. “Our recent investments into our e-commerce capabilities have proven particularly valuable, showing strong growth across all of our business segments this year including 108% growth in e-commerce for our apparel brands in Q3.”
The company had net sales of $476 million in the third quarter, a 12%, or $50 million, increase over the same period in 2019. The company reported third quarter net income of $52 million, a 69% increase compared to $31 million in the third quarter of 2019.
In October, Callaway announced it was buying a majority stake in Dallas-based Topgolf International Inc., which reported revenue of $1.1 billion last year from the 63 golf-themed arcade-slash-driving ranges it operates or licenses in the United States, the United Kingdom and Australia.
In announcing the $2 million aquisition, Callaway executives said they hope Topgolf will feed new customers to its existing equipment and clothing brands which will account for a little more than half of anticipated revenue of the alloyed companies. Through its sports entertainment centers, a popular mobile game and technology that traces the trajectory of golfers’ shots, Topgolf income is expected to comprise an estimated 46% of Callaway’s revenue stream.
“Although we expect some level of continued volatility due to the ongoing pandemic, Q3’s trends have thus far continued into Q4,” Brewer said. “And — perhaps more importantly — we also now appreciate even more that all of our businesses are likely to be favored in both the realities of the current world and likely consumer trends post-pandemic.
“All of our business segments, as well as the Topgolf business, support an outdoor, active and healthy way of life that is compatible with a world of social distancing,” he said. “These are key factors that will likely be important for consumers over the next several months and will also likely continue post-pandemic.”
While Callaway’s golf and apparel businesses have been recovering more quickly than was expected, a resurgence in COVID-19 cases around the globe prompted the company to refrain from offering financial guidance for the fourth quarter of 2020.
Shares were trading on the New York Stock Exchange at $18.58 on at the close of trading on Monday, up nearly $3 since the Topgolf acquisition.
— Coast News reporter Brad Rollins contributed reporting to this article.