Q3 2024 Acushnet Holdings Corp Earnings Call
David Maher, David Maher, Michael
Drew: Good morning everyone and welcome to today's Acushnet Company 3Q24 earnings call. My name is Drew and I'll be the moderator for today's call.
This call will have a Q&A session. If you wish to register a question, please press star followed by one on your telephone keypad. And if you wish to withdraw your question, then it is star followed by two.
Drew: It's now my pleasure to hand over to Sondra Lennon Vice President S. DNA in Investor Relations to begin. Please go ahead.
It's now my pleasure to hand over to Sondra Lennon, Vice President, FT&A and Investor Relations to begin. Please go ahead.
Sondra Lennon: Good morning, everyone. Thank you for joining us today for a Kushnet Holding Corp.'s third quarter 2024 earnings conference call.
Joining me this morning are David Maher, our President and Chief Executive Officer, and Sean Sullivan, our Chief Financial Officer.
Sondra Lennon: Before turning 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 Akushnet's current expectations and are subject to uncertainty and changes in circumstances.
Sondra Lennon: 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 filings with the U.S. Securities and Exchange Commission.
Throughout this discussion, we will make reference to non-GAAP financial metrics, including items such as net sales on a constant currency basis and adjusted EBITDA.
Sondra Lennon: explanations of how and why we use these metrics and reconciliations of these items to the most directly comparable gap metrics 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.
Sondra Lennon: Please also note that references throughout this presentation to year-on-year net 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.
With that, I'll turn the call over to David. Thanks, Sondra, and good morning, everyone. As always, we appreciate your interest in the Acushnet Company.
David Maher: I will start on slide four and get right to our results.
David Maher: Through September, year-to-date net sales were up three percent, surpassing two billion dollars, with growth coming from Titleist clubs, Titleist golf balls, and gear.
David Maher: Adjusted EBITDA of $392 million was up 4% compared to the first nine months of last year. And I will pause here to thank my teammates for their dedication which fuels this company performance.
David Maher: Looking at our business by segment, Titleist Golf Ball Net Sales were down 1% in the quarter and are up 5% year-to-date.
Sondra Lennon: This growth has been led by sustaining Pro B1 momentum, especially in the U.S. market, which is benefiting from increased rounds of play.
Sondra Lennon: As we said on our last call, we expect golf ball sales to be down modestly in the second half as we and our trade partners lower inventories in preparation for the launch of new Pro V1 models in January.
Sondra Lennon: This upcoming launch, which will mark the 25th anniversary of PROV-1, is well underway as we recently debuted new PROV-1 models across worldwide tours.
Sondra Lennon: Player feedback has been very positive and we have fully transitioned production lines to new models to support the upcoming launch.
Sondra Lennon: Titleist Golf Clubs posted a healthy 19% increase in the third quarter as the team did great work bringing new GT drivers and fairway medals to market.
Sondra Lennon: Since its debut, GT has been the number one driver on the PGA, DP World, and Korn Ferry Tours, and early consumer response is meeting our high expectations and fueling segment momentum.
Sondra Lennon: Year-to-date, Titleist golf clubs were up 9% with growth in all regions led by gains in the U.S. and Japan, and an especially strong year for our Vokey Wedge franchise.
Sondra Lennon: Gear was up 9% in the quarter and 3% year-to-date, primarily related to higher sales volumes and travel, with the inclusion of Club Glove in 2024.
Sondra Lennon: And now to Foot Joy where you see revenues were down 2% during the third quarter and off 3% year-to-date.
Sondra Lennon: Despite the decline, FJ has executed well in what has been a soft apparel and footwear market across most regions.
Sondra Lennon: The FJ team also continues to make good progress in diversifying and strengthening our footwear supply chain, and will soon complete the full transition of our footwear production lines to a state-of-the-art new facility in Vietnam.
Sondra Lennon: We continue to work with our long-standing JV production partner and are confident that over time this move will facilitate enhanced innovation and speed to market.
Sondra Lennon: And lastly, net sales of products not allocated to a reportable segment were down in the third quarter and year to date.