In late October, Callaway’s third-quarter earnings report showed net sales up in both the quarter (14.7 percent) and remarkably for the year (29.4 percent). This after an exceptionally successful 2017 earnings year. The positive trend led the company to revise its full-year projection upwards by $15-20 million to $1.23-1.24 billion. On the high side, that would be the highest annual net sales figure since the company went public in 1992.

“For the last several years, we’ve grown our business faster than the market overall and as we have realized increased scale we have been able to deliver significant improvements in operating leverage,” said Chip Brewer, Callaway president and CEO. “Also and perhaps more importantly, we continue to find attractive opportunities to reinvest in our core business that we firmly believe will strengthen and benefit our business over the long term. Our new product pipeline is strong.”

Also strong in Brewer’s mind is the overall state of the golf equipment business. “I think that the industry is in a very solid fundamental position,” he said. “It’s a theme we’ve talked about now for two years. The fundamentals of the golf industry are significantly improving. It’s almost structurally better now and consumer sentiment, it goes up and down a little bit depending on near-term events and such, but it’s been at very good levels. So our outlook remains positive.”

Meanwhile, last week more positive news came from Acushnet, parent company of Titleist, the No. 1 company in golf balls, and FootJoy, the No. 1 company in shoes and gloves. Sales were up 6.7 percent year over year for the third quarter and year-to-date. Its projected sales for the year are $1.59-1.62 billion, which according to prior filings also would be annual revenue highs.

“We like our position through the first three quarters and are encouraged as we look to the balance of this year and into 2019,” said David Maher, Acushnet Company CEO and president.

Both companies have seen an enthusiastic response from Wall Street in recent months, too. In the last year, the share price for Acushnet (GOLF) is up nearly 40 percent. Callaway Golf (ELY) is up more than 50 percent in the last 12 months.

Both companies also are in expansion modes, with Callaway acquiring the Travis Mathew and Ogio brands in recent years, both of which are contributing positively to the company’s bottom line. Acushnet also announced a recent majority stake position that will in effect allow it to benefit on the sales of its popular Pro V1 and Pro V1x golf balls twice.

In October, it acquired an 80 percent interest in PG Professional Golf, one of the largest retailers of used golf balls through its website lostgolfballs.com. Said Maher, “The pre-owned golf ball market has been around for a long time. As Pro V1 makes up such a high percentage of this market, we believe it makes good sense for Acushnet to be a participant in this opportunity.”

These numbers from golf’s top companies seem even more impressive coming in the midst of a difficult weather year for the industry. According to Golf Datatech, rounds played for the year are down 3.3 percent. That comes in a year where the golf season for much of the country (April to September) was the 11th wettest on record, according to the National Climate Report.

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By Mike Stachura
Acushnet, the No. 1 ball company and parent company of Titleist and its Pro V1 and Pro V1x, the most played balls in professional golf, weighed in Monday night on the USGA’s annual distance report, maintaining its long-held position that current equipment rules are effective and that recent distance increases are not cause for new restrictions.

While most manufacturers stayed on the sidelines since the distance report was released Monday morning, Acushnet released its own assessment of the study and suggested the comparative one-year gains need to be viewed in a context that goes beyond the numbers listed in the ruling bodies’ presentation released Monday morning.

“As a leader in the golf equipment industry, our team is conditioned to evaluate data to best understand contributing factors and root causes,” said David Maher, Acushnet CEO and president. “It is with this intent that we analyzed the 2017 Distance Report, and our findings continue to support the fact that equipment regulations have been effective.   “A closer look into the numbers in the Report underscores the complexity of making any meaningful year-to-year comparisons. There were several contributing variables in 2017, including course selection and set-up, agronomical conditions and weather, which need to be considered when assessing the data.”

Among the observations in the Acushnet statement:

Driving distance at the 33 PGA Tour events conducted at the same venue in 2016 and 2017, “the average driving distance increased only 0.5 yards” (the overall increase in the average cited in the USGA report was 2.5 yards). The Acushnet statement notes that at the eight events held at new venues in 2017, “the average distance increased 8.0 yards.”

The Acushnet statement also highlights that of those 33 PGA Tour events, “15 tournaments had a decline in average driving distance with one event flat to prior year. This highlights the year to year variability in distance.”

The Acushnet analysis also said that driving distance at the major championships “represented one-third of the total average driving distance gained in 2017,” noting a 20.4-yard year-over-year increase at the U.S. Open, an 8.1-yard increase at the Open Championship and a 7.0-yard increase at the PGA Championship. It also pointed to a 0.4-yard decline in the driving distance average at the Masters. The Acushnet review cited weather as a factor overlooked in the USGA’s distance study.

The Acushnet study also raised a deeper clarification of the driving distance increase on the PGA Tour’s Web.com developmental tour. In 2017, the Web.com Tour became the first professional tour tracked in the ruling bodies’ Distance Report to crack the 300-yard barrier in its year-end average. The 302.9-yard average in 2017 was a 6.9-yard boost compared to 2016.

The Acushnet report notes that “of the 25 Web.com graduates in 2016, 24 had shorter average driving distance on the 2017 PGA Tour, with an average decrease of 6.6 yards. For the years 2015 to 2017, 74 of the 75 graduates had shorter average driving distance on the PGA Tour the following year. This can be attributed to course set-up.”

While the USGA’s Distance Report cites record-setting average driving distances across all men’s tours and states “this level of increase across so many tours in a single season is unusual and concerning and requires closer inspection,” Acushnet’s Maher said when viewed in context, the numbers in 2017 across all tours are not a cause for alarm.

“In any given year there are variables that impact distance, and any movement as in 2017 is not suddenly indicative of a harmful trend,” he said. “We continue to believe equipment innovation has benefitted golfers at all levels, and our analysis of the 2017 Distance Report affirms that the USGA and The R&A have effective regulations in place to ensure the game’s health and sustainability. We look forward to continued dialogue with the governing bodies and stakeholders as we seek to position the great game of golf for future success.”

Acushnet has consistently argued for restraint and more open dialog between the ruling bodies and manufacturers over equipment rules-making for the last two decades. Its position is even detailed through a 58-page “Tradition and Technology” document posted on its website. Among its main points is the idea that, “Technology has always been part of the game’s enduring traditions. The growth of the game has been a byproduct of the continuing and ever-present balance between tradition and technology.”

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By Mike Stachura, E. Michael Johnson
Wally Uihlein, president and CEO of Titleist and FootJoy parent Acushnet and an industry force for much of the last three decades, unexpectedly announced his retirement Monday.

Uihlein, 68, who will remain as an advisor to Acushnet chairman Gene Yoon and a member of the board of directors, made his retirement effective at the start of the year. His replacement is David Maher, who many had tabbed as Uihlein’s eventual successor when he was named COO in June 2016.

Still, Uihlein’s departure comes as a surprise if only because he has played such a commanding presence behind golf’s most iconic brand for more than 20 years. Uihlein has staunchly preserved, defended and enhanced Titleist’s unrivaled market share and tour presence in golf balls, reinvigorated the company’s club business and maintained the company’s leadership position in shoes and gloves under the FootJoy brand.

Uihlein enforced those leadership positions with an unyielding commitment to tour endorsement. More professional players worldwide by a wide margin use Titleist balls and wear FootJoy shoes and gloves than any other brand. Uihlein also was instrumental in fueling the Titleist club brand by signing high-end putter designer Scotty Cameron to develop the company’s putter line that would fundamentally elevate the price point for putters. He also gave a name to the company’s wedge line by elevating wedge craftsman Bob Vokey to a Scotty Cameron-like microbrand.

All the while, he’s navigated Acushnet through iterations as a part of a public company, the sale to a private international sporting goods brand and most recently helped the company go public in 2016.

Uihlein’s retirement marks a seminal moment for the company, as his leadership and loyalty to the brand are legendary right down to the white coats the company’s personnel wear at the PGA Merchandise Show. He also oversaw the company through consistent growth along with the sale of the company from Fortune Brands to Fila Korea Ltd. And Mirae Asset Private Equity in 2011.

It was the largest-ever purchase of a golf-equipment company at $1.225 billion. Acushnet remained a standalone operation in Fairhaven, Mass., while also expanding in Asia where golf was growing and even greater potential was possible. Uihlein helped engineer the deal that kept intact the company and brands he nurtured for 20-plus years, allowing him to remain in charge. “If I could have achieved anything when I started here, it would be to get the company in a position where it can sustain the brands, and today that is dictated by the globalization of golf,” said Uihlein at the time of the sale. “Companies that are U.S.-centric will be roadkill on tomorrow’s scorecard.”

Uihlein was at the helm for one last major move when the company went public late last year with an IPO with the common stock trading on the New York Stock Exchange under the ticker symbol “GOLF.” The initial offering price was $17 per share with just under 20 million shares of common stock to be sold by existing shareholders of Acushnet. This morning the stock opened at $17.09.

In the midst of the business, Uihlein has been eloquently outspoken in arguing against equipment restrictions. He repeatedly has made the case that there should not be separate equipment rules for professionals and amateurs, the so-called bifurcation argument. Uihlein instead made “the case for unification.”

In his essay, he wrote, “While some lament that PGA Tour players aren’t playing the same game as amateurs, this is more a commentary on the skill of the professional golfer than amateurs’ desire to play a different game. Part of the fabric of the game is the relationship between the game’s best players and all golfers who play.”

Prior to being named COO, Maher, 49, served as senior vice president for worldwide sales at Titleist for four months in 2016 and previously was vice president, Titleist U.S. sales from 2001-2016.

“We thank Wally Uihlein for his forty plus years with Acushnet and the terrific leadership he has provided during this time,” Yoon said. “Acushnet will continue to benefit from his extensive knowledge and experience in areas such as strategic planning, acquisitions, player promotion and golf equipment regulatory matters.

“I also want to congratulate David Maher on his promotion to President and CEO. During his 26 years with the company, David has demonstrated both the leadership and strategy skills that will ensure that Acushnet will continue to be one of the leading companies in the worldwide golf industry.”

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