GOLF — Acushnet Holdings Corp.

Acushnet Company (GOLF) Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

• Q3 2025 Net Sales: $658 million, a 5% increase on a constant currency basis year-over-year.
• Adjusted EBITDA: $119 million, up 10% from Q3 2024.
• Year-to-Date Sales: $2.08 billion, a 4% increase; Adjusted EBITDA of $401 million, up 2%.
• Gross Profit (Q3): $319 million, up $15 million, with a gross margin of 48.5%, down 50 basis points due to tariff costs.
• SG&A Expenses: $205 million, up $5 million, including $2 million in restructuring costs.
• Effective Tax Rate: 23.6% year-to-date, with Q3 at 37.3%, impacted by jurisdictional earnings mix.
• Return to Shareholders: $230 million year-to-date, including $188 million in share repurchases and $42 million in dividends.

2. Strategic Updates and Business Highlights:

• Product Performance: Strong growth in Titleist Golf Equipment (5% growth), driven by Pro V1 golf balls and successful launches of T-Series irons and Vokey wedges.
• Golf Gear Segment: 13% growth in Q3 and 8% year-to-date, with travel brands showing a 20% increase.
• FootJoy: Revenue up 3%, benefiting from successful footwear models and apparel resilience.
• Market Conditions: Positive trends in U.S. and EMEA markets, with U.S. sales up 6% and EMEA up 14% in Q3.
• Inventory Management: Positioned well with current inventory levels, reflecting strategic advancements ahead of tariff deadlines.

3. Forward Guidance and Outlook:

• Full Year 2025 Revenue Guidance: Expected between $2.52 billion and $2.54 billion, projecting low single-digit growth in the second half.
• Adjusted EBITDA Guidance: Anticipated between $405 million and $415 million.
• Tariff Costs: Full-year impact expected at $30 million, with efforts to mitigate a significant portion of this in 2026, projected at over $70 million.

4. Bad News, Challenges, or Points of Concern:

• Tariff Headwinds: Incremental costs impacting margins, with expectations of continued pressure in 2026.
• Market Softness in Asia: Declines noted in Japan (down 13% in Q3) and Korea (down 1% year-to-date), attributed to macroeconomic factors and competitive pressures in footwear and apparel.
• Gross Margin Pressure: Q3 gross margin decreased slightly due to tariff impacts, raising concerns about future profitability.

5. Notable Q&A Insights:

• Sales Composition: U.S. sales growth attributed to volume gains rather than price increases, particularly in the golf ball segment.
• Retail Inventory Levels: Channel inventories are in line with seasonal expectations, with no significant concerns noted.
• European Market Dynamics: Notable growth attributed to favorable weather and improved execution; however, the competitive landscape remains a consideration.
• Working Capital Usage: Increased working capital usage attributed to inventory management and IT investments, but overall cash flow outlook remains positive.

Overall, Acushnet reported solid financial performance in Q3 2025, driven by strong product demand and strategic initiatives, while facing challenges from tariffs and regional market softness. The company remains optimistic about its growth trajectory and operational strategies moving forward.