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Callaway’s 2021 Monetary Report – Key Takeaways
- 2021 full-year gross sales over $3.1 billion, practically double 2020
- Topgolf income greater than $1 billion
- Golf tools gross sales high $1.2 billion
- 2021 internet revenue is $322 million
- 2022 gross sales anticipated to succeed in $3.8 billion
Callaway’s 2021 monetary report isn’t telling us something we didn’t actually count on however it’s nonetheless startling to see the numbers in print.
$3.1 billion in gross sales.
$3.1-freaking-BILLION.
That’s practically twice what Callaway offered in 2020. And earlier than you cry, “Yeah, however COVID,” it’s additionally 82 % greater than 2019.
We’ve typically stated in our previous dives into Callaway’s monetary reviews (and Acushnet’s as nicely) that whereas the headlines inform the blissful story, the small print present steadiness. However this time, there’s not a lot nuance. The headline is the story.
$3.1-freaking-billion.
Oh, and since you wished to know, there’s additionally a $322-million revenue.
As Callaway’s Johnny Rodriguez posted on Twitter yesterday…
Cc @K_Kisner pic.twitter.com/ZrXPEE83cX
— Johnny Rodriguez (@JohnnyRodCG) February 11, 2022
Callaway’s 2021 Monetary Report: Thank You, Topgolf
If Callaway determined tomorrow to cease promoting golf golf equipment, golf balls and golf attire, it could nonetheless be a billion-dollar operation. That’s how necessary final 12 months’s Topgolf merger/acquisition is to the corporate.
The merger was made official final March 8. In 10 months underneath the Callaway umbrella, Topgolf pulled in simply over $1 billion in income. It will seem golf gamification plus wraps, wings and margaritas equal a buttload of cash.
“The mix of Topgolf and Callaway early within the 12 months was transformational,” stated Callaway CEO Chip Brewer in a press release. “We’ve been thrilled by the sturdy income progress and profitability, with each exceeding our preliminary expectations.”
Callaway says whereas Topgolf’s walk-in visitors is powerful, actual progress has come through better-than-expected social occasions and company occasion bookings. The latest surge in Omicron has slowed that however Brewer advised buyers Topgolf’s UK venues skilled an identical downturn a month forward of the U.S. and have bounced again rapidly.
You’d count on the earnings on $1 billion in Topgolf gross sales can be equally staggering however Callaway is reporting $58 million in earnings in opposition to that $1 billion in gross sales, for a margin of 5.3 %. A number of elements impacted earnings, together with a virtually $30-million curiosity improve as a result of merger, together with a write-up to convey Callaway’s current pre-merger inventory in Topgolf as much as market worth.
Callaway opened 9 Topgolf venues in 2021, together with a 72-bay complicated in Fort Meyers, Fla., in November.
Oh, Yeah. Golf Stuff
Whereas Topgolf is getting the headlines, Callaway nonetheless sells a crap-ton of golf tools. Greater than $1.2-billion price. That’s a 25-percent improve over 2020 regardless of the actual fact Callaway launched a number of new merchandise in December of 2020. That’s one of many causes Callaway’s This autumn golf tools gross sales really dropped in comparison with the earlier 12 months. The opposite cause is the corporate shifted its This autumn manufacturing to the brand new 2022 product traces introduced in early January.
Damaged down, we’re speaking about practically $1 billion in golf membership gross sales alone in 2021, a 26-percent improve over 2020 and 30 % over 2019. Ball gross sales for the 12 months have been up 20 % over 2020 to $235 million and up over 11 % from Callaway’s earlier excessive in 2019.
Not coincidentally, the Nationwide Golf Basis reviews golf participation is the very best it’s been since 2012. The sport and, presumably, Callaway welcomed 300,000 new golfers in 2021, bringing the entire of people that name themselves golfers to 25.1 million within the U.S. That marks the fourth straight 12 months of elevated participation.
All these new golfers want stuff to put on, too. Callaway’s attire gross sales jumped 40 % to $491 million whereas its Gear, Equipment and Different (baggage, gloves, tees, and many others.) gross sales elevated 26 % to $326 million.
Golf tools additionally provides essentially the most to Callaway’s backside line, making up practically two-thirds of Callaway’s internet revenue of $331 million. Callaway’s 2021 monetary report says the revenue margin on golf equipment and balls is roughly 16.6 %. Attire, Gear, Equipment and Different added $69 million to the underside line on gross sales of $817 million, at an 8.4-percent margin.
The 2022 Outlook
Like most publicly traded firms, Callaway didn’t present buyers with steering all through all of 2020 and far of 2021. With the post-COVID image getting a bit clearer, Callaway is flexing its muscle tissue and seems fairly bullish on 2022.
The corporate tasks 2022 revenues to succeed in $3.8 billion this 12 months with greater than $1.5 billion coming from a full 12 months of Topgolf. Callaway additionally predicts Topgolf will add anyplace from $210 million to $220 million to its annual adjusted EBITDA (Earnings Earlier than Curiosity, Taxes, Depreciation and Amortization). General, Callaway tasks 2022 EBITDA—a quantity that makes buyers celebration prefer it’s 1999—to succeed in upwards of $490 to $515 million. The ultimate 2021 EBIDTA was $445 million.
To succeed in that $1.5 billion-plus mark, Callaway plans to open 10 to 11 Topgolf venues this 12 months, together with the primary two services in Southern California. The brand new El Segundo facility will probably be close to SoFi Stadium. Together with all the newest Topgolf enjoyable, it would additionally embrace a 10-hole lighted golf course. New services deliberate for Seattle and Baltimore will even embrace Callaway club-fitting bays. Many of the new services are on account of open within the second half of 2022.
The Nationwide Golf Basis says the urge for food for Topgolf-type golf leisure continues to develop. Almost 25 million folks visited non-traditional golf venues in 2021. Almost half of these are solely off-course contributors.
Callaway additionally plans to put in its Toptracer expertise in 8,000 extra driving vary bays across the nation in 2022. It added practically 7,000 new bays in 2021, with 1,700 of these coming in This autumn alone.
To additional increase its rising empire, Callaway can be attempting to succeed in the standard gamer with a brand new, golf-related online game. Particulars are scant however based mostly on what Callaway is saying, it appears like World Golf Tour meets World of Warcraft.
Callaway’s 2021 Monetary Report – Ultimate Ideas
So, yeah, $3.1-freaking-billion is a freaking massive deal. With its previous acquisitions of OGIO, TravisMathew and Jack Wolfskin, Callaway made strikes to diversify its enterprise. That, mates, is one other method of claiming “equipment-proofing.” Diversification appeared prudent as the sport was experiencing dwindling participation. However the previous 5 years have reversed that development and COVID has turbocharged it.
Including Topgolf utterly transforms Callaway right into a golf-based life-style and leisure behemoth. And don’t sleep on final 12 months’s under-the-radar investment in 5 Iron Golf, a rising chain of golf simulator-based purveyors of meals and beverage. That deal features a restricted possession stake which is how Callaway acquired began with Topgolf. Moreover, 5 Iron Golf will provide the chance to demo, get fitted for and buy Callaway golf equipment.
Add that to the appreciable becoming and buy prospects at Topgolf and it’s apparent Callaway is grabbing its personal future by the lapels and never letting go. And people gross sales will little doubt be at full retail (you don’t wish to be underselling your conventional retail companions) so all that beautiful margin gained’t need to be shared with anybody.
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