Highlights

  • Topgolf’s net income for Q2FY24 declined by around 47.1%
  • As per the company’s updated 2024 financial outlook, it now expects consolidated net revenues of USD 4,200 to 4,260 million
  • For Q3 2024, consolidated net revenues are expected to be between USD 970 and USD 990 million

Topgolf Callaway Brands Corp. (NYSE: MODG) has a market cap of USD 1.86 billion. It is a golf and active lifestyle company.  Its segments include Topgolf, Golf Equipment, and Active Lifestyle.

In the second quarter of FY24, the company’s net sales declined by around 2% due to a reduction in sales of golf equipment. Net income for the period declined by around 47.1%. It was due to a reduced income tax benefit, lower operating income, and higher interest expenses related to new venues.

Recent Business Update

Topgolf has officially started construction on its 14th Texas location at the New Braunfels Town Center at Creekside. This two-level facility is set to open in late 2025. In addition to golf, the venue will feature mini-golf, yard games, and a video wall, creating a family-friendly environment. Topgolf plans to employ around 200 Playmakers at this site, enhancing the entertainment options in New Braunfels.

In another initiative, Topgolf Callaway Brands has launched the Topgolf Shop website, designed for beginner golfers and those transitioning from off-course play. The site offers easy access to entry-level golf clubs, balls, and accessories. With personalized gear recommendations and access to golf lessons, the Topgolf Shop aims to make the game more enjoyable for new players, featuring a range of Callaway products tailored to different skill levels, including complete club sets, balls, gloves, and tees.

Company Outlook

The company has updated its 2024 financial outlook. It now expects consolidated net revenues of USD 4,200 to USD 4,260 million, down from the previous forecast of USD 4,435 to USD 4,475 million.

Consolidated adjusted EBITDA is forecasted to be between USD 570 and USD 590 million, while Topgolf's adjusted EBITDA is anticipated to be about USD 310 million. The company estimates non-GAAP diluted earnings per share will range from USD 0.11 to USD 0.21, based on 185 million diluted shares. For Q3 2024, consolidated net revenues are expected to be between USD 970 and USD 990 million, with consolidated adjusted EBITDA projected at USD 95 to USD 105 million.

Top 10 Shareholders

The top 10 shareholders of MODG own about 60.74% of the total shares, indicating concentrated ownership. Providence Equity Partners LLC and BlackRock Institutional Trust Company, N.A. are the largest shareholders, with stakes of 11.54% and 11.45%, respectively.

Stock Performance

The stock has declined 38.30% in the last three months and 38.10% over the past six months, currently trading near its 52-week low of USD 9.05. The stock’s closing price is USD 9.81 as of October 25, 2024.

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 October 25, 2024. The reference data in this report has been partly sourced from EODHD/Others.