Q1 2020 Earnings Call
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After the speakers presentation, there will be a question and answer session.
Ask a question during the session you will need to press star one on your telephone keypad. Please be advised of today's conference is being recorded if you require any further assistance. Please press star zero. Thank you I'd now like 10 the conference over to your speaker for today, So underlining Vice President FPL <unk> and Investor Relations. Please go ahead.
Yeah.
Good morning, everyone. Thank you for joining us today for a cushion at holdings first quarter 2020 earnings Conference call.
Joining me this morning, I, David Meyer, our President and Chief Executive Officer, and Tom, but Chico, our Chief Financial Officer.
Before I turn the call over to David I would like to remind everyone that we will be making forward looking statements on the call today.
These forward looking statements are based on a cushion its current expectations and are subject to uncertainty and changes in circumstances.
Actual results may differ materially from these expectations.
In particular at this time the covert 19 pandemic is having a significant impact on the company's business and results of operations. There was significant uncertainty about the duration and scope of this pandemic and its ultimate impact.
Due to the dynamic nature of these circumstances, our plans could change and our actual results could differ materially from those contemplated by our forward looking statement.
The company undertakes no obligation to update or revise publicly any forward looking statements, whether because of new information.
Future events or other factors, except as required.
Reported results should not be considered as an indication of future performance.
For a list of factors that could cause actual results to differ please see today's press release, the slides that accompany our presentation and our filings with the U.S. Securities and Exchange Commission.
Throughout this discussion, we will be making reference to non-GAAP financial metrics, including items, such as revenues at constant currency and adjusted EBITDA.
Explanations of how and why we use these metrics and reconciliations of these items to a GAAP basis can be found in the schedules in today's press release, the slides that accompany this presentation and in our filings with the U.S. Securities and Exchange Commission.
Please also note that when referring to segment and regional year on year sales increases and decreases.
We're referring to sales in constant currency.
And please also note that when referring to year to date results or comparisons were referring to the three month period ended March 31st 2020, and the comparable three month period.
With that I'll turn the call over to David.
Thanks, Sandra good morning, everyone.
On behalf of the Acosta team, we hope that you and your families are staying shakes and positive while you make your way through these trying times.
Oh.
Our joint venture shoe factory in China was closed for five weeks, while the country was under quarantine and.
And after resuming operations in February it has been fully operational since mid March.
[noise] additional supply chain challenges, mostly specific the soft goods have been manageable.
Phase two of the Pandemics impact started in mid March when the virus began to more directly impact our operations and the golf industry as a whole across North America in Europe.
Golf retail activity declined sharply as most on course golf shops and golf retail stores.
Were required to temporarily close their doors.
Furthermore, golfers were understandably focused on health and safety and not on purchasing golf equipment. During this very challenging period.
As a result traditional golf retail activity in these two regions reduced significantly.
[noise] since mid March operations at most of our us and European production facilities and distribution centres have been suspended.
Or Massachusetts ball plants are now on their eight eighth week of shut down their longest since World War two.
A lot of assembly custom ball operations and our embroidery centres have also been suspended during this time.
We have been able to maintain much of our d. to see fulfillment, mainly with with joy in gear. As these businesses are fulfilled from three P.L. partners located in states that have remained operational.
Globally title as ball planned for in Thailand has remained open which is helps mitigate the loss of production from our U.S. ball plants.
In our glove factory in Thailand has also remained open.
From a sourcing standpoint, or apparel gear supply chains are functioning at normal levels.
[noise] in responding to these challenges are actions have been shaped by an organization wide commitment to associate health and safety.
The need to aggressively manage operating expenses during the peak of the crisis.
The importance of ensuring that are short term decisions are compatible with a cushion it's long term principles envision.
And doing what we can to support the coded 19 relief effort.
Tom will outline several of the steps we have taken to navigate a cushion it's safe passage.
As you will note they have been extensive achieving a 10% reduction in planned expenses and Q1, all of which came after February and a plan to 25% reduction in Q. too.
[noise], while reductions in A.M.P. accounted for the majority of these savings we have also implemented a comprehensive temporary furlough program throughout the organization.
This as you would expect has been a very difficult process and I'm glad to report that in the past weeks, we have been able to call back some of our associates in areas where work has resumed.
Safely returning our associates back to work is our leadership teams highest priority.
And we are hopeful that this process will gradually accelerate over the next several weeks.
In addition, our global team from the earliest days of the pandemic has been focused on carefully managing worldwide inventory positions to ensure that our supply is in sync with the most up to date forecast expectations.
We believe they're good work over the past several weeks will increase our options as we adapt and modify future plans.
To best meet the evolving needs of dedicated golfers and our trade partners.
Having outlined what we see is the first two phases of impacts on the golf industry and a cushion it's business.
We are now in phase three which is the widespread reopening of golf courses in the gradual reopening of retail stores and the return of golf Commerce.
We are prepared for our ball manufacturing club Assembly and embroidery operations to resume in the coming weeks in compliance with all health and safety requirements.
As you know our production facilities are located in Massachusetts in California.
Which remain under stay at home orders and who's reopening schedules may lag other states.
The great majority of golf courses in the U.S. or now open for play with 49, and 50 states either reopened or having announced plans to reopen in the coming days.
See this as endorsement an affirmation of the game as a healthy and beneficial recreational activity.
While April weather was not ideal many open regions have reported that rounds would play increased during the month.
And last week, we saw a wave of golf retailers reopen as more and more states are in the process of safely ramping up their economies.
And earlier this week regulations here in Massachusetts have been ease to to allow for trade shipments to resume with limited staffing levels and strict social distancing guidelines.
Limited this represents meaningful progress from April levels.
And we are hopeful that by the end of this month, we will be able to resume some if not all U.S. golf ball manufacturing and custom ball processing and expand our club making capabilities.
Teams are done good work to reengineer the work flow to adhere to social distancing regulations and create a safe and productive work environment for our associates again, we're cautiously optimistic and prepared to operate safely you had acknowledged that there remains uncertainty around timing.
As I mentioned earlier, one of our priorities. When we entered this crisis was to use our capabilities to help in the relief effort.
For these challenging times the acoustic team has committed to making a difference in the communities in which we work and live and across the close knit golf industry.
I am pleased to share with you that are associates rose to the challenge in donating 100000 face masks to local hospitals and manufacturing face shields and other P.P.E. components for frontline health care workers.
And just over the last few weeks with the help and generosity of some of our title <unk> brand ambassadors, we auctioned off 12 once in a lifetime golf experiences in what played out to be a rewarding experience for all involved.
Lastly in recent weeks, we donated a portion of her online sales and to date. The company has contributed more than $800000 to relief efforts in the communities in which we live and work.
Into golf industry workers, who have become unemployed as a result of this crisis.
I would like to publicly thank my fellow associates and our value to ambassadors for their commitment and sense of purpose is they set out to make a positive difference.
As we now look ahead of the summer months, we expect the golf's appeal will continue to be robust given its outdoor field of play an embedded ease of social distancing.
Along the same lines, we believe the game as well positioned for the poster pandemic world and this bodes well for our business in the long term.
In the short term, while we are encouraged by the recent beginnings of recovery within the golf industry.
We expect that our second quarter will be significantly impacted with April being the most challenging followed by incremental improvements in may and June as golf retail ramps backup and we resume company operations.
Pace at which consumer spending resumes remains to be seen as does the degree to which retail activity.
We'll be impacted over the course of 2020.
We are bracing for increased promotional activity in the coming months is stores reopened in the market recovers.
And lastly, while we look forward to the return of our manufacturing operations. It also remains to be seen to what extent or output levels will be affected by new safety regulations, which will be in place for as long as covert 19 remains a threat.
We expect the answers to these questions will become clear in the coming weeks and months at which time, we plan to provide further guidance and clarity around our full year outlook.
I will conclude my prepared remarks by reaffirming a cushion its commitment to the safety and wellbeing of our associates and trade partners.
In our focus on leading the company through these challenging times as we build upon are proven track record providing shareholders with a compelling long-term total return investment opportunity.
With that I will now passed the call over to Tom.
[noise], Thanks, David and good morning to everyone on the call.
I too would like to recognize the impact that covert 19 has had on our associates their families are trade partners and communities.
And the resilience and agility our team has shown throughout this trying time.
[noise] starting on Slideseven consolidated net sales were 409 million down 6% versus Q1 of last year and down 5% on a constant currency basis.
As David mentioned.
All our segments, where performing well through mid March and we're tracking at or ahead of our expectations, but this performance was offset by sharp declines over the last two weeks or the corridor.
Adjusted EBITDA was 53 million for the quarter down 11 million or 18% compared to Q. on 2019.
Moving to our segment results on slide eight title is golf balls were down 17%.
While a decline is expected in a non probably one year. We were pleased with the launches of avionics tour soft and velocity, which were well received.
Title is golf clubs were up 3% on these successful launches evoking estimate wedges in Cameron special select punters as well as solid sell through of T.S. metals and T. series Irons.
Title. This golf gear was down 2%, despite a strong showing from golf bags, which were up 10% year over year.
And finally after a good start to the year on the strength of the launches a pro S.L. tour, X. and flex X.P. golf shoes.
Spring deliveries of apparel and gloves foot joint golf, where was down 7%.
[noise] shifting to our geographic market results on slide nine.
U.S. was down eight per cent yearn year with decreases across all segments. Despite increases in rounds played in January and February.
Yeah.
The meal was up 8% year on year, primarily from the impact of shoes, which was not included in our results in Q1 of 2019.
Japan was down 9% as pro V., one was in a second model year and the retail environment continued to be challenging with elevated inventory levels.
And finally Korea was up 9% as the region recovered quickly from the <unk> 19 disruption.
Slide 10 is R. Q1 income statement and there are few items I would like to highlight.
Gross profit was 201 million down 21 million or 10 per cent versus last year and gross margin was 49.2% down 200 basis points.
The decreases in gross profit and gross margin were driven primarily by the overall decrease in sales and production volumes.
[noise] S.G.N.A. expense in Q1 was 153 million down 3 million or 2% compared to Q. on 2019.
Was significantly lower than our expectations as a result of our cost reduction actions during the quarter.
During the first quarter management approved a restructuring program to refine our business model and improve operational efficiencies.
As a result, the company recorded a restructuring charge of 12 million for benefits provided to associates included in both voluntary an involuntary workforce reduction programs.
Operating income in Q1, which includes the 12 million dollar negative impact of the restructuring charge was 21 million down 31 million from 2019.
Interest expense was 4 million compared to 5 million last year, reflecting lower average interest rates on outstanding borrowings.
Our income tax expense was down almost 5 million on lower income before taxes, but are effective tax rate was 46% compared to 25.4% last year.
The increase in the effective tax rate was driven primarily by shift in our jurisdictional profit mix away from the U.S. as well as by negative disagree items in Q1 2020.
And finally net income attributable to a Christian holdings was 9 million compared to 35 million and Q1 of 19.
On slide 11, we have provided a reconciliation of net income to adjusted EBITDA for Q1.
There are two items to highlight here.
The first is the AD back of the Q1 restructuring charge and the second is the AD back for covert 19 related expenses of 7.5 million, which is included in the line item other extraordinary unusual or non recurring items net.
These items are both consistent with the definition of adjusted here, but in our credit agreement.
For clarity the covert 19 add back include salaries and benefits paid for associates, who could not work due to government mandated shutdowns.
Benefits paid for furloughed associates, spoiled raw material costs incremental costs to support remote work and the cost of additional health and safety equipment.
[noise] moving to slide 12 at March 31, 2020, we had about 54 million of unrestricted cash on hand, or total debt outstanding was approximately 521 million.
And our leverage ratio was 1.8 x.
On April 1st to bolster our cast position and to maximize our flexibility.
We drew down 200 million on a revolving credit facility.
Including the drawdown, we had unrestricted cash and available borrowings under our revolving credit facility of approximately 275 million.
At this time, we believe that our cash on hand, and available barrings will be sufficient to meet our liquidity requirements for at least the next 12 months.
Consolidated accounts receivable at the end of Q1, 2020 was 309 million compared to 215 million at the end of Q. for 2019, and 334 million at the end of Q1 2019.
The increase in the first quarter of 2020 is seasonally normal but was lower than we anticipated as a result of the drop offs often sales at the end of the corner.
Our day sales outstanding work consistent with the same period last year.
And we have been working closely with our partners to extend payment terms were needed.
Consolidated inventories were 365 million at the end of Q. on 2020 compared to 398 million at the end of Q. for 2019, and 346 million at the end of Q1 2019.
As with the change in accounts receivable the decreasing inventory at the end of the first quarter of 2020 is seasonally normal.
What was also lower than we expected.
Our team is doing good work closely managing our supply chain and production schedules to ensure our worldwide inventory levels remain appropriate.
Overall, we are comfortable with the quality of our accounts receivable and the amount in composition of our inventory at this time.
Cash flow from operations for the first quarter of 2020 wasn't outflow of 73 million compared to an out flow of 90 million for the first quarter of 2019, an improvement of 17 million.
The improvement was primarily driven by a smaller increase in working capital balances in the respective periods.
<unk> was 6 million in Q. on 2020, which was essentially flat compared to the first quarter of 2019.
We are closely monitoring our cat backs for the second quarter and for the balance of the year and currently expect 2020 full year cap x. to be lower than 2019.
As David discussed we have taken several precautionary steps to significantly reduce our expenses and manage our cash.
These steps include.
<unk> inventory receipts and capital expenditures.
Reducing all discretionary spending, including advertising and promotional costs selling costs and business travel.
Using our payroll costs through the restructuring actions we took in Q1.
Temporary associate furloughs.
Suction in senior management compensation.
Suspending cash retainers for our board of directors and adjusting our capital allocation actions, which I will describe shortly.
As a result of these steps we achieved a 10% reduction in plant operating expenses in Q1, and we expect to achieve a 25% reduction in q. too while at the same time minimizing the use of our cash in available credit.
Turning to capital allocation on slide 14.
Although our longterm priorities have not changed we have adjusted our capital allocation plans for the short term.
As I just mentioned, we currently expect 2020 full year cap x. to be lower than 2019.
In March we suspended our share repurchase program.
That time, we had purchased approximately 244000 shares in the open market during Q1 for a total of approximately 7 million.
[noise] on March 27th 2020, the company paid its previously announced Q1 dividend totaling approximately 12 million.
The company is committed to paying a dividend over the long term and today are board of directors declared a cue to cash dividend of 15, and a half cents per share.
Payable on June 19th to shareholders of record on June 5th.
This would represent a return of approximately $12 million to shareholders.
[noise] decisions about future dividend payments will be based on the economic and market conditions at that time.
Finally, turning to guidance.
David mentioned, while we are encouraged by the recent beginnings of recovery within the golf industry. We expect that are cute too will be significantly impacted with April being the most challenging followed by incremental improvements in may and June.
Going forward there was a great deal of uncertainty regarding the pace at which consumer spending will resume the degree to which retail activity will be impacted and our ability to return our manufacturing operations to their normal levels.
Based on this uncertainty we have elected not to provide guidance at this time.
We will continue to closely monitor this rapidly changing situation and we're provide you with our updated view on our second quarter earnings call.
In conclusion, although the Gulf industry will clearly be disrupted throughout 2020.
Will continue to be challenging environment for us to operate in we are confident we have taken the appropriate steps to protect the company's liquidity and financial position to enable us to maintain our market leadership positions into the future.
That I will now turn the call over to Sondra for Q. and I.
Thanks time, operator could we now please open up the lines for questions.
Certainly at this time, if you'd like to ask a question. Please press star one on your telephone keypad Kimberley Greenberger with Morgan Stanley. Your line is open.
Okay, great. Thank you so much.
And I did he just ask a little bit about the first quarter you talked about the big change in revenue trajectory mid March in North America. In Europe is there are there any numbers you could put around that what was revenue growth sort of up until mid March and then.
What did you see from revenue growth in the back half of March or revenue decline has at work and then any update in terms of what you're seeing here in April any geographical differences that are emerging and if if you can look at.
At the current contour of your business.
You think that that your business is one that gets back to normal sooner because it's.
Tied more to the Gulf industry, which appears at least in North America to be largely open at this time or what are the mitigating factors that could ah limits that recovery back to normal. Thank you so much.
Good morning, Kimberley I'll take the first part of that question as it relates to Q1, and I think David will add some color about April and and what we're seeing and some of the geography is you know as it as it relates to the the revenue trajectory in Q1.
While we won't get into specific numbers, you know through the first 10 weeks or so all of our businesses were tracking either at or ahead of plan. You know the the rounds played data was really good you know things, where we're off on it on quite a good trajectory in in the last two weeks in particular as when we.
Really started to to feel the impact in in North America, and in Europe, and and and you can see where where we ended up where you know all of our businesses did end up lower than our our expectations coming into the corridor.
Good morning, Kimberly I'll I'll I'll address your your second question in in in the first piece being some of the some of the geographic differences were seeing it if.
If we had a if we had a global ladder it might look like Korea at the top as I mentioned they they.
They were disrupted in in late February early March made a quick recovery.
And and rounds of play their up up near 10% that market functioning close to as we would have expected several months ago. So so they've climb back to your normal levels as quickly as any market as we've seen in next into Japan, which I, which I said earlier.
Has been operating at at at at a fairly stable pace through Q1, we have seen in recent weeks.
A bit of a a consumer pullback is that country and acted some some some extensions to their stay at home orders. The then then you then you reach the U.S., which we described significantly disrupted in in April.
We all golf shops workload, certainly all off course retail was shut down.
Where we see things from here is is there. There's there's there's a lot of interest in the game of golf right now and that's that's obviously a terrific indicator for the long term.
But but but the fact does remain again April you had a period, where encore shops off course shops, largely largely shut down we do think those those forces will will come closer to one another that being a interest in golf are staying at a at a at a pretty high level in golf shops overtime.
I'm gradually resuming more normalized operations as we look at our business by segment certainly you see you see balls, probably on the front lines of recovery most closely tethered to participation in rounds of play and all other categories following suit at their own different different.
So we're we're we are we are seeing two different forces again, the first forest being very high interest in golf right now and that's nothing but a long term positive.
Golf shops, and golf Commerce are playing catch up right now.
Thank you so much.
Thank you Kimberley next question please.
Daniel <unk> Stevens your line is open.
Hey, this is a and you're on her Daniel I was gonna wondering how you're thinking about your inventory division or the year and the right in the price environment remaining rational and.
Or the price environment going forward. Thanks.
Oh.
Sure Andrew I'll start with with our inventory position internally and and David can perhaps talk about [noise]. So.
Sort of field inventory and the pricing environments. So [noise].
So at the end to Q1 are are inventories were about 368 million. This is down from the end of the year at which was at 398 million.
And compares to 346 million at the end of Q. on 2019.
You know a decrease in Q1 from from the end of the previous year is seasonally normal for us.
But the decrease was perhaps a little less than we expected we attribute this to the drop off in sales that occurred at the end of the quarter, which left a little more inventory on on the balance sheet than we normally would've expected.
You know our team's doing a a good job sorta managing supply chain and and our <unk>. Our our forward looking production schedules to ensure that our our inventory levels are appropriate internally.
And you know overall were really comfortable at this point with the demo and composition of our inventory.
Yeah, Andrew just maybe a little color on on what we're seeing in the in the marketplace certainly inventories are going to vary by segment and channel, but but in both cases on course off course around the world, they're going to be seasonally high in mid March as as is all channels prepare for the.
April through call. It August period, where golf retail tends to be to be at its peak looking at off <unk> off course inventories would be seasonally high in mid March.
And then and then they confronted store closures for the last four to six weeks. So it gives you sense for that for that channel and what it might look like.
Many encore shops in in mid belt, and snowbelt regions, we saw differ or cancel their opening orders, which would typically ship around April one you ever take a couple of weeks for weather. So as a result.
Of course channel is gonna be leaner in later.
Then the off course channel golf balls typically would be.
The best shape, given increase rounds of play in in their consumable nature and our sense from from available information is that our golf ball inventory title is golf ball inventory at the moment or down versus a year ago.
To clubs, we had we had recently large wedges and Potter so the pipeline is full.
In business tends to be primarily fitting dependent in all channels and thus inventory generally don't get get too far out a position.
There's likely a good amount of driver inventory in the market seasonally as it is it ought to be for this time of year. We're again, a little bit fortunate that R.T.S. driver is in the final final year of of a two year life cycle, so or or inventories would tend to be relatively low in in your too.
And and the final piece I'd add is that footwear is is running heavy which is which is normal for this time of year and this was one of the first categories, we saw to become promotional to Fort Joy.
Portray we seem to be in pretty good shape. In fact, we look at on course inventory, they're down 20% versus a year ago, we again back to the the idea that many many April one orders. We're we're we're we're defer to pushed out later in the year.
They could you'd cut down the Oh, you're expecting the rising by him into change going forward are expecting anyone to get promotional from here thing.
You know as as I said earlier, we are preparing for it. It. It's it's too soon to say at this point I I did note, we've seen some activity and footwear.
We've seen golf ball manufacturers ourselves included extend their spring ball promotions and that was largely a function of because then you know <unk>. We we missed we missed a month of of of of retail traffic to showcase and promote promote those promotions. So those have been extended.
<unk> at this stage with with golf retail really just coming back online and and up and running it's too soon to say, but we do we do expect to see some promotional activity throughout throughout the year.
Alright, that's really helpful.
Mhm. Thank you Andrew next question please.
Tim Ponder with Wells Fargo Securities. Your line is open.
Hi, it's a it's actually go lackey dialing in for Tim Hope, everyone say first of all so I wanted to build on on the.
The first question so talking about like the retail cadence right as you move from mid March you know through through the weeks of April can you talk about maybe what you're seeing as far as.
<unk> there is.
The paper declined easing right it is or the declined less than what you were saying in in late March and then you know maybe you could comment similarly, what percentage of your retail outlets were you know close add the mid March and what are currently open as of now.
Yeah. It's so fair fair to look at the March to mid March to April period, as as being the most challenging and I'll I'll correlate that with.
The fact that the the the vast majority of retail outlets were close certainly in in in the U.S. in Europe.
Again, as we said earlier Korea, Japan on on a different different <unk>.
But but certainly that period, we've seen we've seen a lot of closures both on course golf shops, and off course golf retailers and as we said over the last couple of weeks, we've seen that loosen up so week by week over the last two three weeks, we're seeing more golf courses open we're seeing more golf shops open and we're seeing more.
Golf retailers open so as we've said we're in the beginning of the recovery part process. It changes it changes literally by the day.
The number of course is a number of states that have that have a allowed for golf to reopen now stands at 49. It was a far smaller number days ago, even weeks ago. So we're just seeing a whole lot of of changing ramp up as.
There's more and more states and more and more regions are are thinking about ways to safely.
Reactivate their economies, but but in terms of of of golf Commerce.
Again golf courses, we see at roughly 90% operational golf retail shops are lagging.
And and they're following state regulations. So in in many states Oh golf shops, all golf golf retail outlets are open and in some states they have not yet open so.
Again, it's it's it's a gradual development process that that is really playing out real time over the last couple of weeks and over the next couple of weeks and I expect by the end of May we should see most golf shops back up and running.
Okay. That's helpful. And then just one follow up on the balls business, because there's obviously a lot of moving parts there right. So.
I was hoping you could try and you know quantify the you know, 17% decline and maybe kind of horror sit down into different buckets right. Obviously, you got a difficult comparison right you've got a declining consumer demand and rounds played and then you've got the manufacturing disruption right. So if.
Maybe you could kind of divide up that that you one decline in in you know kind of ours, what part of it you know would fall into each of those bucket that'll be helpful. Thanks.
Yeah. So so Q1 in an even year for golf balls non pro V., one launch here tent tends to tends to trail a bit prior year odd year, probably one launch so that's that step one step two is our launches of as Thomson.
At 80, X., and and and torso often velocity and in the first couple of months first 10 week.
We're running at or ahead of our expectations. The the biggest impact was was the drop off at the end of at the end of.
Of the quarter far less of an impact the supply chain. So in fact virtually no impact from from the supply chain with the exception of some custom ball shipments that we couldn't get out at the end of the month, but the primary impact on what you saw in golf balls was the was the slow down at the end of into the quarter and a lot of that.
Again as I mentioned earlier in some of the channel inventory comments, we saw a lot of a lot of golf shops, who would typically take in their spring order on April one call us on March 15, and either push that back or or cancel it.
Okay. Thanks.
Thank you down next to question. Please.
Certainly again, if you'd like to ask a question. Please press star one on your telephone keypad.
Stevens Apone with J.P. Morgan Your line is open.
It's off on the part question about 20 positioning specifically in the the off course channel based on your conversations and retail partners. How long do you think it went k. from the off course channel to get in a cleaner position you know could to channel b. relatively clean.
<unk> corridor.
Yeah, so as as we as we look at inventories I think fair to say they they did a good job with curbside pickup they did a good job with every commerce businesses.
And they obviously scaled back purchases or where they were where they were in mid March.
Would say is is is likely to be slightly better. Now then again it was four to six weeks ago. So they're looking at inventory positions today versus a year ago that are probably.
Flat to down slightly and that begs then the question what do we think is going to happen in the next in the next you know in the next three months.
Again back to my earlier framing I think fair to say consumable his comeback first and fastest and and and others other categories and segments follow.
The pace really at which to be determined and again and I know you'd love to hear some some more clarity on what we think is going to happen in the next few months, but but we are living at a time where.
<unk>. This is this is a week or or two weeks that making in terms of what we've seen.
Retail do in terms of getting back on line, but but we are we are hopeful that the one the one indicator in the one the one norstar star and all this is the game and the high interest in the game, which which leads us to believe participation should be robust consumable should be robust and others.
Will follow the pace at which we're just going to have to have to buy some time to better understand.
And just to follow up on that so if you think about how the totally 19 pandemic is impacting the business isn't it is it causing you to rethink your lawn schedule for the balance the year like would you consider delaying the fall launch in your new driver do next year, just giving your commentary about the driver category, maybe having some access.
Fuck out there.
Yeah Fair Fair question, you know as you'd expect we we have planned fall launches in virtually all categories.
Our goal at the moment is is to be ready to go.
Or ready to differ depending on market dynamics inventories overall health consumer spending fitting readiness et cetera et cetera.
Tour validation plays a role in that in that calculus as well.
Our intentions already get a good read on the consumer and the market readiness over the course of the next four to six weeks and then make our decisions in in circumstances will certainly very by product category in the so we'll our actions at the moment fair to say some of our plant some of our launches will go off his plan others maybe.
Pushed into next year in some might be pushed into into a liter. A later window in the in the second half.
<unk>.
Thank you. Thank you there are no further questions at this time or now like to turn the call back over to the presenters.
[noise], Jack Thank you and and and thanks, everybody for your time today, we we do believe the game of golf and a cushion or well positioned for the long term.
While we face and on the near term challenges that we are confronting I wish you all good health and safety until we speak again.
This includes today's conference call. We thank you for your participation you may now disconnect.