Acushnet’s 2021 Financial Report – Key Takeaways

Acushnet’s 2021 net sales approached $2.2 billion. Up 33 percent over 2020 and 31 percent over 2019 Full-year net profit was nearly $179 million. Acushnet projects a relatively flat 2022.

There are some mighty interesting tidbits in Acushnet’s 2021 financial report. A couple of them are so interesting that they forced us to go back and review Callaway’s 2021 financial report.

And what did we find? More interesting stuff.

First of all, it doesn’t take Warren Buffett to look in the rearview mirror and see Acushnet’s days as golf’s biggest company getting smaller in the distance. Callaway’s acquisition of Topgolf saw to that. But, despite the widening gap, the two companies are more alike than you might think.

And, depending on how you keep score, they’re a lot closer than you might think.

As we dive into Acushnet’s financials, it’s time to remind everyone that we aren’t—nor do we pretend to be—financial whiz kids. We’re just a gang who loves the golf business and we like to read. So with that in mind, let’s jump in.

Acushnet’s 2021 Financial Report: $2.2 Billion

The report, released yesterday, says Acushnet sold nearly $2.2-billion worth of golf gear last year. That’s a 33-percent increase over the pandemic year of 2020 and a 30-percent jump over the non-pandemic 2019.

I don’t care who you are. Those are pretty good numbers.

The company’s 2022 net income was $179 million, up more than 86 percent over 2020 and more than 48 percent over 2019.

I still don’t care who you are. Those are still some pretty good numbers.

Here’s where it starts to get a little interesting. We can all agree Callaway’s $3.1 billion is a wicked big number. But Topgolf was responsible for just over $1 billion of that total. That means Callaway’s traditional golf business—clubs, balls, apparel and gear—was right around $2.1 billion, just a wee bit south of Acushnet.

Objects in the mirror may be closer than they appear.

“We delivered tremendous results in 2021, including 33 percent net sales growth,” said Acushnet CEO David Maher in a statement. “All while navigating unprecedented supply chain challenges.”

Breaking Down The Numbers

For the year, Acushnet’s golf ball sales were up 31 percent over 2020, totaling nearly $668 million.

Thank you, Pro V1.

Additionally, Titleist club sales rose 32 percent to $551 million, Titleist gear sales (bags, gloves, hats and such) were up 29 percent to nearly $193 million and FootJoy sales jumped 40 percent to $580 million.

Acushnet says the growth in club sales was due to higher selling prices across all categories along with higher sales volumes across all categories. Except one. It should be no surprise to anyone who tried to buy a Vokey wedge last summer that Acushnet’s wedge volume was down last year thanks to our friend, the global supply chain crisis.

Acushnet also says all of its Titleist gear categories jumped in volume while FootJoy saw both higher volume and higher average selling prices.

By region, U.S. sales jumped 34 percent in 2021 to $1.125 billion. European sales were up 35 percent to $296 million. Japan was up 24 percent to $118 million. Korea grew 31 percent to $322 million. What Acushnet calls the Rest of the World was up as well, nearly 40 percent at $216 million.

But like Callaway, Acushnet also posted a Q4 loss of $26 million. There are a couple of reasons. The first was a $4-million goodwill impairment write-off due to Acushnet’s acquisition of European golf and ski apparel company KJUS. More importantly, Acushnet. like Callaway, started shifting Q4 production to products that wouldn’t be sold until 2022, which meant a gross profit hit.

Additionally, the company cites increased inbound freight costs, raw material and component shortages and higher advertising, promotional and selling expenses.

Contrasts and Similarities

Again, if you remove Topgolf from the equation, Callaway and Acushnet are neck and neck with what you might call traditional golf sales. But how each company got there is a little different. Callaway, for example, is the golf club king, with nearly $1 billion in equipment sales last year. Titleist club sales were a little more than half that.

On the other hand, Titleist ball sales reached $668 million, nearly triple Callaway’s total of $235 million. If this ball war was a boxing match, the ref would have stopped the fight.

On the other hand, if you add up both companies’ gear, accessories and apparel sales, they’re pretty close to even, with FootJoy tipping the scales in Acushnet’s favor.

Looking at profits, Acushnet’s $179-million profit on nearly $2.2 billion in sales works out to around an 8.3-percent profit margin. Callaway’s margin for 2021 stood at around 10.4 percent.

You want another similarity? If you again remove Topgolf from the equation, both Callaway and Acushnet are projecting relatively flat 2022 traditional golf sales.

Yep, flat.

That one, quite frankly, caught us a little by surprise.

The 2022 Outlook

In its 2021 financial report, Callaway projects 2022 revenue to be in the $3.8-billion range with $1.5 billion of that coming from Topgolf. That means $2.3 billion will come from traditional golf sales. Since Callaway’s 2021 traditional golf sales were roughly $2.1 billion, it appears Callaway is looking at a relatively small $200-million increase for 2022.

Acushnet, for its part, is projecting 2022 sales to be just over $2.2 billion. Since 2021 finished just under $2.2 billion, it appears Acushnet is also looking at a relatively small increase for 2022.

Now, we get $200 million in sales for an entire year is a pipe dream for any OEM outside of the Big Five but, seriously, what gives?

It would be easy to conclude neither company thinks the post-COVID golf boom will continue and the equipment feeding frenzy will slow down. That may be part of it but both company reports anticipate continued growth in participation. And both say retail inventory is lean despite record sales, which means retailers are turning their inventory and moving product.

A bigger part of the picture may be something that’s plaguing almost every industry in 2022: that damned supply chain. Companies are basing sales projections less on what they believe they can actually sell and more on what they know they can actually make and deliver.

More simply, demand may in fact be outpacing pandemic-strained supply. With rounds played up 20 percent and with more than 800,000 new golfers taking up the game in the U.S. since 2019, the consumer side of the business appears healthy. It’s reasonable to assume some organic slowdown of new players but the supply chain is bottlenecking nearly every industry.

It certainly helps explain why golf’s two biggest companies, coming off record-setting years, are basically projecting flat golf equipment sales for 2022.

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