Image source: Shutterstock

Highlights

  • Topgolf Callaway's Q3FY24 net sales decreased by 2.7% YoY to USD 1,012.9 million
  • Net income for the quarter fell 112.1% YoY, with a loss of USD 3.6 million due to increased expenses
  • Full-year 2024 outlook includes USD 4.20 billion in net revenues and USD 560–570 million in adjusted EBITDA

Topgolf Callaway Brands Corp. (NYSE:MODG) is an American global sports equipment manufacturing company.

In the third quarter of the financial year 2024 (Q3FY24), Topgolf’s net sales decreased by 2.7% YoY to USD 1,012.9 million. It was primarily due to an 11.1% drop in revenue from the Active Lifestyle Segment, which fell by USD 33.3 million to USD 266.2 million, driven by lower European wholesale revenue at Jack Wolfskin.

Net income saw a significant decline of 112.1% YoY, mainly due to decreased revenue and higher operating expenses.However, net operating cash inflows increased by 48.7% YoY, reaching USD 338.7 million, driven by a favorable change in net working capital. Cash and cash equivalents grew by 12.3% YoY to USD 441.9 million, supported by cash inflows from operations, though partially offset by cash outflows from investing and financing activities.

Company Outlook

For the full year 2024, Topgolf has updated its projections, expecting consolidated net revenues of approximately USD 4.20 billion. The company forecasts consolidated adjusted EBITDA to range between USD 560 million and USD 570 million. Non-GAAP diluted earnings per share are anticipated to fall between USD 0.08 and USD 0.13, based on around 185 million diluted shares outstanding. For Q4 2024, Topgolf anticipates consolidated net revenues of about USD 885 million and adjusted EBITDA between USD 74 million and USD 84 million.

Top 10 shareholders

The top 10 shareholders of Topgolf hold approximately 64.97% of the total shares, indicating a concentrated ownership structure. Providence Equity Partners LLC. and BlackRock Institutional Trust Company, N.A. are the largest stakeholders, with significant stakes of 11.52% and 11.13%, respectively, dominating the company’s shareholding distribution.

Stock Performance

The stock price of MODG has declined by around 16.51% and 33.79% over the past three months and six months, respectively. Currently, it is trading near the lower end of its 52-week price range, which spans from a high of USD 16.89 to a low of USD 7.22. As of February 5, 2025, the stock closed at USD 8.09.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is February 05, 2025. The reference data in this report has been partly sourced from EODHD/Others.