Callaway Posts Increased Sales For '10, But Profits Stumble

Callaway Golf "managed to boost sales last year despite the lingering downturn in the golf industry," but the company "stumbled when it came to profits, in part because of higher costs associated with the ongoing move of its golf club assembly operation from Southern California to Mexico," according to Mike Freeman of the SAN DIEGO UNION-TRIBUNE. Callaway yesterday reported sales of $968M in '10, up 2% from '09. The company posted a net loss of $18.8M ($0.46 a share), up from a $15.3M loss ($0.33 a share) in '09. Callaway "faced higher expenses as it relocates club assembly from Carlsbad to Monterrey, Mexico, and club distribution from San Diego County to Dallas." Callaway President & CEO George Fellows said that the golf industry is "showing some signs of recovery after two very tough years," and he "expects a small increase in sales this year in the U.S. and Britain, along with solid growth in emerging markets such as China and India." Callaway forecasts sales of $980M-1.02B in '11 (SAN DIEGO UNION-TRIBUNE, 1/26). At presstime, Callaway shares are trading at $7.23, down 5.7% from yesterday's close at $7.67 (THE DAILY).