Q3 2023 Acushnet Holdings Corp Earnings Call
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Good morning, everyone and welcome to the Acacia Holdings Corp, third quarter 2023 earnings Conference call.
My name is Carla and I will be your operator for today's call.
Today's call will include a Q&A session to register a question. Please press star followed by one on your telephone keypad.
If you wish to revoke your question at any point. Please press thoughtful it's like today.
I will now hand over to your host Sondra Lennon Vice President of planning analysis, and Investor relations to begin.
So dropped please go ahead.
Good morning, everyone. Thank you for joining us today for a Christian at holding Corp's third quarter 2023 earnings Conference call.
Joining me. This morning are David Maher, our President and Chief Executive Officer, and Sean Sullivan, 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 on its current expectations and are subject to uncertainty and changes in circumstances actual results may differ materially from these expectations 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 fire.
<unk> with the U S Securities and Exchange Commission.
Throughout this discussion we will make 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 references throughout this presentation to year on year sales increases and decreases are on a constant currency basis, unless otherwise stated as we feel this measurement best provides context as to the performance and trends of our business and when referring to year to date results or comparisons.
We will refer to the nine months period ended September 30th 2023, and the comparable nine month period.
With that I'll turn the call over to David.
Thanks, Sandra and good morning, everyone. We appreciate your interest in today's call.
I will start on slide four and get right into our results.
Kushner posted third quarter sales of $593 million, 6% increase over last year.
Adjusted EBITDA for the period was up 14% to $99 million.
For September net sales were up 10% to almost $2 billion, while adjusted EBITDA increased 21% to $378 million I will pause here to thank my teammates for their commitment and dedication which fuels the company's performance.
Looking at our business by segment, you see the strength and momentum of title this golf balls and golf clubs driving the company's growth.
Titleist golf balls were up 6% in the quarter and 16% year to date.
<unk>, one and probably one X models are leading this growth in our golf ball manufacturing team is doing good work to keep pace with strong consumer demand.
As we approach the holiday retail season, our golf ball availability position is healthy and we have transitioned to building inventory to support new product launches scheduled for early 2024.
And across the worldwide tours Titleist golf ball usage has more than seven times, the nearest competitor and at the men's and women's U S. Open and open championships. All four winners played a titleist golf ball.
Four different champions, winning majors on four distinctly different golf courses showcase quality total game performance and versatility that define the number one ball in golf.
Moving to title this golf clubs, our team posted another strong quarter with sales up 18% for the period and 17% year to date.
New title is T series Irons are launched in August and are off to a solid start with early demand meeting our high expectations.
<unk> was the most played iron on the PGA tour. This past season for the 19th time in the past 20 years.
Entitle Us T S. Our drivers also continue their streak is the most played driver on tour.
Rounding out our club business. We're also pleased with the momentum and sustained demand for oki wedges, and Scotty Cameron putters across the worldwide tours and in the marketplace.
In affirming their global strengths Titleist golf balls, and golf clubs have posted year to date sales gains in all regions.
Now moving to gear, you see sales were down 20% in the quarter and up 9% year to date.
This third quarter decline was expected as we comped against last year's outsized growth when much of our gear volume was delayed into Q3 as a result of supply chain disruptions, we experienced in the first half of 'twenty two.
We are pleased that our dear delivery and service have returned to healthy levels and that the timing of our business is on a normalized and demand driven cadence.
Now Fortunately sales increased 3% in the quarter and are flat year to date due mainly to the strength of our U S business growth in the quarter was led by apparel and a modest increase in footwear as we effectively differentiate our new golf shoe products in a crowded retail environment.
Affirming our comments in the last call. We expect the industry will continue to work through excess footwear inventories for the next few quarters.
And we remain confident that our team will manage through this period, while protecting for choice premium positioning and long term interests.
Now to slide six and look at our business by region.
Here you see the strength of the U S market and consumer and our quarterly and year to date results.
The U S is setting the pace with rounds of play up 4% year to date and on track to surpass their previous high Mark from 2021 we.
We see this as positive commentary on the overall health of the sport and the additive impact of the expanding golfer base.
Healthy participation and strong demand across our portfolio are driving a cushion, it's 8% third quarter and 15% year to date growth in the U S golf balls clubs and shoes were up double digits year to date, while gear and foot Choi have posted high single digit gains for the period.
Outside the U S. We estimate that rounds in EMEA, Japan, and Korea were off low single digits through September largely attributable to unfavorable weather compared to last year.
<unk> year to date sales as you see are off 1% and EMEA up 9% in Japan and down 2% in Korea.
Rest of World sales have increased 14%.
As noted ball and club sales are up in all regions, while footwear declines and a soft apparel market in Korea has negatively impacted both titlist and switch or apparel sales.
And now looking forward.
The attractiveness of a cushion of its core consumer the game's avid and dedicated player and the company's enduring commitment to product and service excellence continue to drive the strong financial performance and positive outlook, we shared today.
We are enthused with the momentum behind our title list for Chilean shoes brands and healthy market fundamentals and are confident in the investments we are making across our businesses to position of Cushing it for sustaining leadership in growth.
Golf participation is vibrant with worldwide rounds of play tracking ahead of their 2021 peak and golf courses and retail partners are investing in their facilities and experiences to meet evolving consumer preferences.
On the new product front, we are optimistic about early interest in our new T series Irons and are confident are accustomed fitters and supply chain will support high quality golfer experiences and our ability to meet anticipated demand levels.
Our golf ball team is on track to launch several new models in early 'twenty 'twenty four remember in even years, we launched new AVX and performance models.
We have high confidence in the health of our supply chain and ability to successfully execute these launches and also look to benefit from recently added capacity, which will support improve probably want availability going forward.
We're equally confident in the state of our new product pipelines for title of skier foot Joy in shoes, and are well positioned to meet anticipated Q4, and holiday demand and launch a wide range of new products next quarter.
In summary, we believe the company's commitment to making high performance high quality golf products focus on the game's dedicated golfer proven track record of product innovation and supply chain management and ongoing investment in our product development golfer connection and manufacturing will support the company's long term.
<unk> growth objectives.
These priorities along with the company's disciplined approach to capital allocation remains the foundation of a cushion its proven investment thesis.
Thanks for your time this morning, I will now pass the call over to Sean.
Thank you David good morning, everyone.
As David highlighted we had a great quarter and strong year to date performance third quarter net sales increased 6% over the same period in 2022, driven by higher sales entitled This golf clubs, Titleist golf balls and foot Joy golf, where adjusted.
Adjusted EBITDA was 99 million% to 14.2% increase.
For the first nine months of 2023, net sales and adjusted EBITDA increased nine 9% and 26% respectively.
Net sales growth in the quarter was driven by continued momentum of our titles brand with golf clubs and golf balls growing by 17, 9% and six 2% respectively.
What joy sales were also up in the quarter by three 4% driven mainly by apparel.
Titleist golf gear decreased by 19, 9% from the third quarter of 2022, which as David mentioned reflects a comparison to the outsized quarter, we had last year.
Net sales were up in Q3 across all regions, except for Korea, where the market continues to be impacted by soft footwear and apparel sales.
Gross profit in the quarter was $309 million up four 6% compared to 2022, primarily due to higher sales volumes entitled This golf clubs higher average selling prices entitled Us golf balls, and lower inbound freight across all reportable segments.
Title is golf year gross profit was down mainly due to lower sales volumes and Fortunately gross profit was down primarily due to unfavorable manufacturing overhead absorption and increased promotional activity in footwear.
Overall gross margin of 52% was down 80 basis points largely due to the foot Joy factors I, just mentioned, primarily offset by lower inbound freight costs across all reportable segments.
SG&A expense of $210 million in the quarter increased $8 million or three 8% from 2022, mainly due to higher advertising and promotion expenses entitled US golf clubs entitled US Golf balls higher selling expense, primarily due to employee related expenses, partially offset by lower <unk>.
Retail Commission expense in Korea, and lower <unk> related expenses.
R&D expense of $16 million was up mainly due to higher employee related expenses.
Our increase in intangible amortization was due to the acquisition of trademarks related to title this golf clubs and golf gear in the fourth quarter of 2022, and the first quarter of 2023, respectively.
Interest expense of $9 million in the quarter was up $5 million due to an increase in borrowings and interest rates with a little more than half the increase coming from higher debt balances our effective tax rate in Q3 was 16.5% down from 22, 9% last year, primarily driven by a shift in our mix of duress.
Additional earnings.
Our forecasted effective tax rate for fiscal year 'twenty three is expected to be in line with our year to date rate of approximately 19%.
Moving to our balance sheet and cash flow highlights.
Our balance sheet and cash flow positions continue to be very strong, allowing us to continue to execute our capital allocation strategy with ongoing investments in the business and return of capital to shareholders being our highest priorities.
I'm pleased to report that on October 3rd 2023, we completed the issuance and sale of $350 million of seven and three eights percent senior unsecured notes due in 2028, which further enhances our cushioning its liquidity position.
Proceeds from the notes offering were primarily used to repay borrowings under our revolving credit facility.
Our net leverage ratio at the end of Q3 was one six times inventories decline from both last quarter and year end and we are comfortable with our inventory quality and net position given the current state of demand and the supply chain.
We expect inventories to increase at year end to support 2024 product launches.
Year to date cash flow from operations was up significantly from the prior year, mainly due to changes in working capital primarily inventory.
Capital expenditures were $42 million in the first nine months of 2023 and are still expected to reach approximately $75 million in fiscal year 2023, given our heavily loaded Q4 pipeline.
Through September we returned roughly $245 million to shareholders in 2023 with $205 million in share repurchases and $40 million in cash dividends.
Today, our board of directors declared a quarterly cash dividend of <unk> 19, and a half cents per share payable on December 15th to shareholders of record on December one.
As of September 30th we had $202 million remaining under the current share repurchase authorization between October <unk> and October 27, 2023, we purchased approximately 386000 shares of our common stock on the open market for an aggregate of $20 2 million, bringing the cumulative.
Total open market purchases since the inception of the 2023 share repurchase agreement with Magnus to $100 million. As a result, we expect to purchase approximately 1.8 million shares of our common stock from Magnus for an aggregate of 100 million on November three 2023 and satisfaction of our COO.
Amendment under the 2023 agreement after settlement of this agreement, we will have approximately $82 million remaining under the share repurchase authorization.
Turning to our full year 2023 outlook, we are maintaining our view for revenue to be between 2.35 billion and $2 4 billion up 5% to seven 2% on a constant currency basis compared to 2022.
This outlook incorporates continued momentum in the golf ball in golf club categories. However, some of our third quarter outperformance in golf clubs was due to timing, notably in Japan, where this year's iron launch was a quarter earlier than last year's fourth quarter metal lunch at.
At the midpoint, our revenue would be up six 1% on a constant currency basis.
With respect to adjusted EBITDA, we are narrowing our range to be between 365 and $375 million in terms of the fourth quarter on top of the shift of golf club revenue to Q3, I. Just mentioned I also want to point out that our outlook reflects incremental investments in the fourth quarter in particular, selling R&D and A&P.
As we look to build upon momentum heading into 2024.
In closing, we're very pleased with our performance in the first nine months of 2023 and remain focused on executing on our priorities for the balance of the year and beyond.
With that I will now turn the call over to Sondra for Q&A.
Thank you.
Operator could we now open up the lines for questions.
Anthony if you'd like to ask a question today you may do so by pressing star one.
One on your telephone keypad.
They are paying for your question. Please ensure your device is Amit <unk>.
And if he wished here I think your question. Please press star one if I can.
We will now take our first question today.
From Brian <unk> from Jefferies.
Andy Your line is now open. Please go ahead.
Yeah, Thanks, and good morning, everyone I guess, John just real quick to clarify is there any way to quantify the impact of that shift.
In Japan.
Fourth quarter into the third quarter, just to give us a little flavor. There and then I guess, David just getting an update on just market.
Thoughts by region.
The U S market continues to power ahead, even with very wet weather that's very.
Positive just wanted to get your thoughts just how you feel about the U S market relative to Europe.
Europe and Asia at this point in the cycle.
Oh, Hi, Randy I'll take I'll take that so U S. Certainly point to rounds of play obviously healthy I think we're on track to be up but we're up about 4% year to date, which set against the backdrop of a very wet spring in are in open markets, particularly the west I think the industry generally feels really good about.
What we're seeing in participation.
So U S participation up low single outside the us.
The U S down low single in terms of rounds play and that's kind of a bit of a weather impact as well I think when I looked at the third quarter rounds profile outside the U S. It was flat to up 1%. So so U S outpacing and rounds, and I would say U S outpacing and consumer spending as well, which I don't know.
Surprises any of us we.
We certainly saw a bit of a pullback from it from the consumer in Europe, This year, which we expected.
Japan, a little bit like like Europe. The one the one area that that may be a bit of an outlier is is Korea, where we called that out on our prepared remarks was the.
Space and in the Korean market, but by and large are very.
Very happy with participation, particularly in the U S pleased with consumer spending in the U S and would note that slight trailing outside the U S. Both in terms of rounds of play and consumer spending, but where we sit today with the market where it is with consumer spending where it is I think it just speaks to the strength and.
Of of the sport and then when you when you refine that a bit into our dedicated golfer.
You see you see that group is even more resilient than the broader consumer space.
Yeah, and then Randy on your first question about the clubs again, where we're obviously very pleased with how the irons launch has gone are you know when you look at Japan in Q3. This year versus last were probably up about $5 million in the region and certainly we're comping and I think the key point here is we're comping against.
Our metals launch that happened in Q4, so it's as much about what you should expect in Q4 as what we experienced in Q3.
And then last follow up.
Sean again for you just on the gross margin can you just walk us through some of upcoming puts and takes you expect just to impact gross margin ahead. It sounds like Theres no ASP strength.
Rates are coming down I don't know.
Raw materials are as well our labor just just wanted to get thoughts on how we should be thinking about just trends around again, the puts and takes around gross Martin thanks, guys.
Yeah sure so feel very good about the gross margin outlook I think on the positive side, we have experienced the benefits in 2023 from freight as you as you called out.
The majority of that Randy we have experienced through the nine months I think as I look at Q4, probably a small tailwind on freight relative to prior year, but I think moving to a more normalized state.
We talked about the strength of the ball in the club segment. So I think that will continue to to bolster our the gross margin.
On the flip side again, we've talked about our customization or distribution, we've talked about manufacturing overheads. So in many respects.
The footwear category and what impact are production and manufacturing has as it was in the quarter a bit of a drag. So overall feel good about the gross margin outlook and those are a couple of things that are I guess on the one hand normalizing on the other hand, we'll I think we'll hopefully.
David said as we cycled through the footwear market will start to see hopefully a turnaround in terms of the manufacturing absorption.
Very helpful. Thanks, guys.
Thanks, Randy Operator next question please.
Yeah.
We will now take our next question from Megan Alexandra Thrum Morgan Stanley Megan Your line is now open. Please go ahead.
Hi, Thanks, very much maybe if I could just follow up on that last question from Randy can you maybe talk about in the third quarter, where gross margin came in relative to your expectations and then I guess more broadly.
The three Q number was relatively in line with what <unk> 19 wise. So you know as we think about next year is 2019, the right base to think about or John to your point or some of the pressures you're seeing in footwear. This year, perhaps transitory and you maybe you can recapture that next year, So 2019 as maybe.
Not the right base to think about it.
Okay.
Yeah, I'll take it I'll comment on sort of the look back to 2019.
Certainly from a product launch cadence standpoint, I think I think 23 versus <unk> 19 is a fair comp remember right 24, we get into even even year and that changes our launch profile, we launch AVX and performance models will launch a new dry.
Ever so it always even evens a better look back then and odd the odds are better look back.
But in terms of the flow of product in the cadence of product I think that's the right way to think about it the wildcard as you well know is as the business is just a lot bigger which is changing.
Our our margin profile that changes, how we spend is a little bit of shift to when we spend but by and large in terms of pointing to what's the right way to think about the business on a go forward I do like I do like the even to even comparison with the understanding that you do have to kind of park what happened in 2021 and 'twenty two aside.
Yeah, and then Megan just in terms of gross margin for the quarter. I mean, it was generally in line with expectations I think we expected a strong performance from balls and clubs and the contribution we knew we had a some offsets are in the foot Joy category. You know I think one of the things I didn't really comment on it.
And Randy's question was raw material pricing I think we've seen normalization there some moderation across the board. So we're really really have good visibility to our raw materials, primarily in our ball and clubs business. So all in all our gross margin for the quarter was in line with our expectation.
Okay. Thank you that's helpful. And then maybe you can just broadly given update on retail inventory you you mentioned footwear again, I guess, how does that look relative to last quarter and would you expect that to kind of work itself out in the fourth quarter or could that perhaps bleed into next year.
Yeah.
So I'll just I'll just caveat this by saying we are at a seasonally low point in time in the golf industry right. It's November and had a lot of the a lot of the retailers a lot of our golf courses have closed or will soon close so we're at a seasonal low.
I would characterize inventories broadly is generally healthy and within the range of normal, which we feel good about heading into the holiday and next year.
The one outlier we've called out.
Has been has been footwear and the way, we think about that I would say, it's probably 10% to 15% heavier than than where than where it should be and again keep in mind I'm speaking about broader channels not just not just our footwear business, but global inventories across channels. So if I, if I look at it as being 10% to 15%.
Heavier than than what it maybe should be it might've been 15% to 20% heavier three four months ago. So I think it's working it's working its way through the inventory cycle.
The other part of that is I would point to it's going to be on the lower end in the U S and the higher end outside the U S. And then within the U S and support to note that a lot of that inventory tends to be concentrated in the off course channel you don't see a lot of excess inventory on course so.
It is concentrated but but in terms of how do we work through it. We do think we're a couple of cycles to go to to get to a more normalized state, but but but the reality is we made a nice we made a nice step forward over the last three or four months.
Got it thank you very much.
Thanks, Megan operator next question please.
Our next question comes from Matthew Boss from Jpmorgan. Your line is now open you go ahead.
Thanks, and congrats on a nice quarter.
So David maybe higher level could you elaborate on the underlying enthusiasm for the game of golf that you cited.
Maybe how you see the brand positioned across categories to capture market share opportunity and do you think this and do you think multiyear this could potentially change if we think about pre pandemic.
It was basically a low to mid single digit revenue growth rate.
Just any changes as you think multiyear.
Yeah, So I'll start with sort of our view of the sport over.
Over the last several years right rounds rounds globally are tracking.
In the U S up about 19%, 20% ahead of where they were pre pandemic, there's been a big step up right we have more golfers.
People are prioritizing the sport differently in their lives people are working differently.
And I think I think the game is benefiting from its it's.
It's realizing the benefits of its exercise components its outdoor components that socialization components all of that goes along with it. So the sport, obviously very very healthy.
In the U S and in and around and around the world.
I've made the point a few times that I think we're five years running where the golfer base has grown fastest growing segments juniors women.
So so a lot of positives in in the sport and I'll bring that commentary too.
Pushed it in our business as you know we're focused on the dedicated player.
We tend to be a bit more focused in our product approach and our messaging approach as.
As we say routinely there, they're pretty resilient, they're pretty passionate.
In good times, they they they play and think about equipment and we're seeing that in our results not only this year, but over the last several years.
And then we also point to that audience and recessionary times and look at their resilience.
In recessionary times, so really the core of the <unk> story is this is this core dedicated dedicated player.
There are some other factors that are playing out as well and that is the professional game right vibrant alive and well we're seeing a return of corporate spend on golf that went very quiet during the pandemic years, but we're seeing corporate spend whether it's through outings, whether it's through.
Promotion of events pick up again that that's a that's a healthy positive.
And.
And then more broadly the game the sports facilities, whether it's golf courses, whether it's golf specialty retailers have had a pretty good run. These last few years and they're taking.
Their successes and reinvesting in the future. So what we're seeing here in the last couple of years as the game is doing a nice job reinvesting in itself and understanding that hey, there has to be evolution. There has to be some adaptation in order to continue this momentum that we're experiencing so I'm.
All in all we feel really good about where the sport is today and the fundamentals are very strong again I made the point earlier that that I would put a.
On a strict extra rounds of play this year going to be up about 4%.
That's with some real tough weather around the U S, which says people are avid people are committed.
And utilizing the capacity that exists within golf courses at a higher level than they typically have so.
But a lot of positive and certainly we are aware of all the macro concerns.
In the marketplace in the world and we factor those into our calculus in our forward thinking as well but.
Net net the sport.
Is it a really good stuff and really good spot.
Great and then Sean could you elaborate on the investments that you cited in <unk> across segments and just how best to think about operating expense dollar growth relative to sales growth as we think about the opportunity for operating expense leverage multiyear.
Yeah.
Yeah, you know as I as I called out you know, we're really trying to invest in the business build on the momentum for 'twenty four.
Build momentum and we have now for 24 and beyond.
I cited the selling I decided R&D and and other A&P. So you know obviously the club and ball franchises in the title. This brand is a big part of that so you're going to see our.
Spectation is a meaningful investment in Opex in Q4 relative to <unk>.
Sales growth. So again, we've talked about that in our last call probably had more ambition around I T and some other areas that we had called out we certainly are still working on a number of enterprise wide technology initiatives that are.
<unk> are going well, but probably the pace of investment and spend is slightly lagging where our expectation where Ah was Ah I.
I guess the three.
At the end of Q2, so I figured I'd call that out as well because that is a slight positive. So we certainly will expect the investment in Q4, I think we've got some ambitious plans.
And we think that again, we like where we are from a an EBITDA margin perspective, our opex Opex investment.
I do think that we are investing significantly in our customization and distribution capabilities that we certainly can talk more about on future calls, but we really think we're setting ourselves up for a good.
Operating leverage in the business.
As we've called out a number of times. This business has grown significantly over the last three or four years and I think between customization distribution technology, we really have an opportunity to build real scalable platform and create operating leverage in the business are in the mid to long term.
That's great color best of luck.
Thanks, Matt.
Our next call. Please.
Our next question is from Jay Abella.
From Raymond James Your line is open. Please go ahead.
Good morning. This is Martin on for Joe Congratulations on a great quarter I just wanted to touch really quickly on the revenue guide there's only two months left and I believe last year, you get narrowed the guide to about $25 million and we just view the $50 million gap, that's a little bit.
Why would you mind touching based on some of the uncertainties for the remainder of the year.
Yeah.
Yeah happy to Martin So again, we're we're obviously two months left in the year. It is a seasonally low point as David talked about I think that given the macroeconomic environment are you know, we're just taking a conservative approach.
Q4 on the sales side.
October results are certainly coming in line with our expectations.
Across the board I think you know.
The footwear category and foot Joy, we're keeping an eye out we've talked about it a number of times now, but as we think about it.
It just seemed like the prudent approach to holding holding firm on the sales side, we certainly tightened the adjusted EBITDA range, given the Q3 performance and our outlook for the year. So we thought it prudent to tighten that one and we have certainly more confidence but the wide.
Leaving the range, where it was at sales seem to be appropriate at this point.
Hey, Martin just just because I think I'd add to that the only thing I'd add to that is as clubs strike. We did Sean mentioned in his remarks, there was a timing shift within clubs.
Which which we shipped we shipped irons in Q3 this year last year remember, we launched metals in Japan in Q4 that won't repeat so that's the only unusual callout on a year on year comp that is worth noting.
Great. Appreciate it it's a good question about buyer in Taiwan is it that gives you an opportunity for us to gain incremental share.
Well, we're certainly considering possibilities.
A lot of questions left unanswered I'm I'd tell you Martin I'm going to I'm going to pass on that one where we don't have a relationship with launch Tech and I I think others are best positioned to speak on that one so at this point to too early to say and but but certainly we're modeling possibilities and scenarios.
Got it thank you and once again congratulations.
Thanks, Martin Operator next question please.
I'd just like to remind you.
Today, Please press star when they buy one and your telephone keypad.
Our next question is from J P will earn from Ross and T. J P. Your line is now open. Please go ahead.
Great. Thanks.
Thanks for taking my questions here.
First off could you maybe just touch.
After taking price in the <unk>. One this year have you seen any kind of impact from that price change.
Any response from consumers or retailers about.
That change in pricing and any impact to share as you think about going forward and then just maybe also on that note.
Kind of about revenue next year exiting the peak season. This year are there any conversations with retailers or pro shops that kind of how are you thinking.
There is changes in the way consumers are buying or just any any major trends to point out as you think about how to position for next year from a revenue perspective. Thank you.
Yeah, Okay, J P. So as to pricing.
Nine months in two well, we're 10 months into the new <unk> one pricing. It. It is it has settled in obviously, we're having a very good year, both in terms of of of sell in and sell through from a share standpoint.
Never want to be Cavalier about price increases, but we think the market understands and accepts.
The price change and we think most importantly, we've we've done a good job showing value.
Associated with that price change so again, they never want to take a.
Price increases lately, but I think we did a good job positioning new models in the marketplace and again are our sales data and certainly sell through data would suggest.
The consumer is accepted and understands the reasoning and the value associated with that.
And in terms of retailers and major trend shifts.
Nothing nothing to call out other than again I'll make the point.
That even years, particularly on golf balls, even years flow differently than odd years, right, we launched and pipeline <unk>. One this year, we won't do that next year in 'twenty four but we will launch in pipeline.
AVX and our performance models. So just a different cadence that that's the big story I will say it it looks as though certainly as our retailers have stepped up their there their revenues and I've made this point before almost half our businesses in the U S is on course, so it is.
Got a little bit of a different profile than than maybe the market in total.
But I think our retail partners and Green grass partners have done a really good job keeping pace with stepped up demand.
And I really can't call out a an area, where they're gonna change or think differently about how they how they purchase and stock product.
The only the only exception might be in its specific to how we're running our business and used to see if you see our success in golf clubs.
We keep we keep activating our custom fitting network and that works really well for us so that might invite.
On a more measured or lesser inventory position at retail from a golf club standpoint, but that's only because we're pushing we keep pushing the envelope and investing behind our custom fitting custom fitting efforts.
Great. Thank you and then maybe just one follow up.
In terms of the share repurchases just wondering if theres any kind of.
Cadence that you're thinking about in terms of that remaining.
80 ish million and.
I don't want to jump the gun, but just curious if there is any.
Ongoing talks about kind of re upping that plan and maybe when we might hear about that thank you.
Yeah no. Good question. So obviously, we'll settle tomorrow that will leave us with $80 million are I think our historical pattern is as good of a predictor of our approach to capital allocation again, we're investing heavily in the business as you know on the form of R&D.
And capital expenditures as we called out today are we've got a nice dividend and a robust share repurchase program I guess, the best way to answer that is I would expect that probably at some point in the first half of 'twenty for you'd see that $80 million are needing to be revisited.
Great. Thank you and best of luck moving forward.
Thank you. Thanks J P. Operator next question please.
Our next question comes from Daniel <unk> from Stephens, Inc. Your line is now open. Please go ahead.
Hey, guys. This is reed on for Danielle I just had one.
Quick question for you.
As we see smaller players move into the space, specifically more than like balls in apparel does that change any of your thinking around the competitive landscape anyway.
I would run the business differently.
And anything on your go to market strategy. Also is you you just sort of your new senior notes would you think about maybe acquiring one of these businesses one of these up and coming in smaller guys that are.
Starting to disrupt the market. Thank.
Thank you.
Yeah, Reed I'll, just I'll preface it by saying, we certainly take all competition very very seriously.
As you know we've been at this a long time and.
This is not new we continually have seen a flow of new competitors I will I will speak a little differently about balls than apparel.
I don't see the competitive landscape in balls being that.
That dynamic or influenced by smaller players today, but again, we always watch carefully so I'm not sure that.
That narrative is.
Is is as outsized as maybe you see in apparel, where where you do see it's just got a low cost of entry low barrier entry, it's not difficult to get in the apparel business.
What's difficult is as sustaining an apparel business over the long term and that's most that's most important to us so.
Specific to our portfolio. We we've said this before our apparel portfolio. We've got we've got foot joy as a.
<unk> global premium player with strength across markets, we've got titlist apparel in Korea in the Asian markets, which which approaches the super premium and we've got schuss in western markets as well. So we like we like the construct and the composition and size of our apparel.
So.
And likely not inclined to to add to it at this point.
So we're certainly paying attention we watch all competitors take them seriously.
But as you've seen.
And I think our results speak to it our primary focus and investment has been internally and that's and that's serving us very well.
Alright, Thank you guys.
Thank you Reed operator next question please.
We will now take our next question from Casey Alexander from Compass Point Casey. Your line is now open. Please go ahead.
Yes, good morning.
Thank you for taking my question I'd like to approach that from a little bit of a different aspect. The recent fire at the Taiwanese golf ball plant appears to have taken a substantial portion of capacity.
Out of the system, particularly for value golf balls right when you're about to reintroduce your new lines of value golf balls.
There are possible shortage out there that you guys could take advantage of in terms of capturing some incremental market share and building affinity with new customers, who maybe were using other brands, but but due to the fact that some of that capacity is out of the system does that provide you guys an opportunity to take share there.
Yeah.
Yeah Casey.
I'm inclined not to not to go down that road, but I would point you to in the company is public. So you can get a sense for what they've produced.
A lot of their production our understanding is has been at the practice ball and value into the segment. So a lot of their production is where we don't compete.
Some of it is certainly so again, where we don't have a relationship with launch Tech and I know, there's a lot happening around.
The fire and the explosion in window opens so again I'm, just I'm inclined to let others comment on that particularly the effected party launch tech.
Alright, thank you.
Thanks, Casey Casey, Thanks, and thanks, everybody as always we appreciate your interest.
Wish you the best for the holiday season, and look forward to getting together again on our next call to update our fourth quarter and give you a good look into to our 24 plants. Thanks again.
This concludes today's call. Thank you for your participation you may now disconnect your lines.
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