Callaway Golf Posts Better-Than-Expected Financial Results; Will Acquire TravisMathew
Callaway Golf’s shares surged 8% on Friday after the company "posted better than expected financial results and said it is buying apparel brand TravisMathew," according to Mike Freeman of the SAN DIEGO UNION-TRIBUNE. Callaway will pay $125.5M for the Huntington Beach-based clothing outfit that "sells California casual polo shirts and other apparel." Sales are forecast at $55-60M this year. The sale is "expected to be completed by the end of September." Freeman noted this is Callaway’s second acquisition "outside of its core golf club business." In January, Callaway bought backpack/golf bag maker Ogio for $75.5M. Callaway on Thursday also reported Q2 sales of $305M, up 24% from the prior year. Net income was $31M, which is down from earnings of $34M for the same quarter last year. The company said that last year’s results "benefited" from a one-time, $18M gain from a sale of a portion of Callaway’s ownership interest in Top Golf, an arcade/driving range company with 33 outlets worldwide. Callaway "raised its full-year guidance, saying it now expects sales" of $980-995M. That is up from a previous forecast of $960-980M (SAN DIEGO UNION-TRIBUNE, 8/5).