The Topgolf/Callaway Split Can’t Come Soon Enough And Acushnet May Have A FootJoy Problem

Every three months, we get a master class teaching us that golf’s two biggest OEMs are two very different companies. Acushnet and Topgolf Callaway do put up the numbers, though, with combined sales of $1.8 billion in just the first three months of 2025.

I don’t care who you are or what you think of the current state of affairs in the golf industry, $1.8 billion is a lot.

As always, the topline numbers almost always paint a happy picture. It’s when you dig into the details of profit, loss, trends and shareholder guidance that you get a sense of what’s going on with these companies.

What we’re finding is pretty fascinating. For Topgolf Callaway, the upcoming spinoff of Topgolf into an independent company needs to happen sooner rather than later. For Acushnet, one of its industry-standard brands might need a little soul searching sooner rather than later.

As we look into each company’s Q1 2025 financial reports, we need to offer up our regular disclaimer:

We are not, nor do we claim to be, financial experts, investment counselors or Wall Street-level business analysts. We’re simply golf industry geeks who like to read.

With that, let’s dig in and see what the numbers mean.

Topgolf Callaway: A few ups and some notable downs

Topgolf Callaway is still one company with the upcoming split expected to happen in September. For the first quarter, the combined company is posting sales of just under $1.1 billion. That’s a lot but it is down 4.5 percent from Q1 of 2024.

Despite that drop, the company reported quarterly profits of $2.1 million. That’s down nearly 68 percent from last year’s Q1 profit of $6.5 million. Nearly all of that difference in profit comes from a $4.5 million-increase in income tax. However, when certain non-cash and non-recurring items are taken out of the equation, Topgolf Callaway shows a net income of $20 million. That’s a 41-percent increase over last year.

“We are particularly pleased with the performance of our golf equipment business,” said CEO Chip Brewer in a prepared statement. “The Elyte driver received numerous awards and we started to benefit from the cost reduction and margin improvement initiatives we began implementing in 2024.”

Regardless, it remains clear that September can’t come soon enough.

For the first time in recent memory, the company’s Topgolf division is posting quarterly red ink. The unit posted a $12-million net loss for the quarter compared to a $3-million profit last year. Although quarterly sales topped $394 million, that’s down seven percent compared to Q1 last year.

The company does say it expected Topgolf revenue to be down for the quarter and predicted a 12-percent decrease in same-venue sales. However, it is revising its full-year Topgolf revenue downward anywhere from $45 million to $70 million.

Still a rosy scenario?

Despite those numbers, Topgolf Callaway still says it had a strong Q1.

“We met or beat expectations in all segments of our business,” Brewer told investors this week. “I was particularly pleased with the margin improvement in our products business.”

Golf equipment sales were mostly flat compared to Q1 of 2024 but the business unit was more profitable. Sales topped $444 million with a quarterly profit of $102 million. That’s a 24-percent increase over last year. Margins were higher, too, at 23 percent this year compared to 18 percent in Q1 last year.

Of that total, $340 million came from golf clubs and $103.7 million from golf ball sales. The Active Lifestyle business unit was also down. Its $255 million in sales is down five percent from last year. However, its $30 million in operating profits are up 24 percent.

Earlier this spring, Topgolf Callaway announced it is selling its Jack Wolfskin outdoor apparel brand to the Chinese footwear and athletic apparel company ANTA Sports.

With all of those numbers, you may be wondering how Topgolf Callaway could possibly be spinning a rosy scenario on this quarterly report. Well, as Brewer said, Q1 results were, in fact, better than expected. That’s almost always good news. Additionally, the company announced its earnings blew away expectations at 11 cents per share. It was expecting earnings to be down four cents per share.

That’s all well and good but Polen Capital, an investment management company, told its investors Wednesday it’s exiting Topgolf Callaway, stating its capital would be better deployed elsewhere. Topgolf Callaway shares have lost nearly 60 percent of their value over the past 52 weeks.

Acushnet and the FootJoy conundrum

Acushnet’s financial reports tend to read like a broken record sounds. Once again, the company is posting modest gains in sales while maintaining steady and predictable profitability.

Q1 sales topped $703 million, down just over half a percentage point compared to Q1 last year. However, when considering foreign exchange rates, Acushnet was up 1.2 percent compared to last year.

In today’s climate, up is good even if it’s just a little.

Additionally, Acushnet is posting a $99-million quarterly profit, up over 13 percent from last year. Don’t get overly excited about that increase, however. One-fifth of that profit comes from a $21-million pre-tax, non-cash gain related to ending a FootJoy joint venture (more on that later). Take that $21 million out of the equation and you’re still left with a $78 million profit on $704 million in sales.

That’s not unpleasant.

Wall Street likes modest gains and steady profitability. Acushnet stock is up roughly seven percent since the Q1 report was released. Since early April, it’s up over percent.

“The golf industry remains structurally healthy,” Acushnet CEO David Maher told investors last week. “The number of participants is growing and rounds of play are resilient despite poor weather, which impacted Asia and the U.S. in the first quarter.”

Acushnet is recording small but steady increases (there’s that broken record again) in golf ball and golf club sales. The 2025 Pro V1 launch in January led golf ball sales to $213 million in sales. That’s a four-percent increase. However, it’s an 11-percent increase over Q1 2024, the last time Acushnet launched a new Pro V1.

Golf club sales are also up slightly at $207 million. That’s a 3.5-percent increase over last year but a 15-percent increase over 2023.

FootJoy, however, is becoming a problem.

What’s up with FootJoy?

FootJoy is posting Q1 sales of $178 million, down five percent from last year.  That, too, should sound like a broken record. FootJoy has posted declining sales in seven out of the last 10 quarters and in each of the last two years. In every down quarter, Acushnet says it’s been due to declining sales volume in footwear and apparel, partially offset by higher average selling prices.

That has to be concerning. Anyone with eyes can see that the competitive landscape has changed over the past three to five years. Shoe companies such as Paynter and Skechers are impacting that market and it seems new and trendy apparel companies are popping up every week.

It’s a different world.

Acushnet is taking steps to address the situation. As mentioned, the company ended a FootJoy joint manufacturing venture in China. That move resulted in Acushnet shifting its footwear manufacturing to Vietnam, a move that was planned even before the current tariff uncertainty shook international trade.

In his remarks to investors, Maher said the Q1 drop was largely due to closeout liquidation and targeted product line rationalization across the FootJoy brand. The company believes the global footwear market has been reshuffling over the past two years and it’s looking to leverage more premium (read: higher-priced) footwear sales in 2025.

The question of tariffs

Both companies are working to mitigate the impact of current and pending tariff uncertainty. The FootJoy move to Vietnam wasn’t directly tariff-related, but it does have a tariff benefit. Acushnet says its golf ball business has a small exposure on raw materials imported from China, but it is expecting to mitigate much of that by the end of the year. Club components are sourced from Taiwan and Vietnam as well as China. The primary tariff issue will be with clubheads sourced from China.

All of that, of course, depends on what happens after the current 90-day pause (Acushnet’s quarterly report was issued before the administration announced the 90-day pause).

“We have not yet passed on increase tariff costs to consumers,” says Maher. “Price is the last lever we would pull. We’re having conversations with many of our suppliers in identifying opportunities to cost-share.”

Maher also told investors the company is actively looking to have their clubheads made somewhere other than China and may have a plan in place by the end of the year.

Topgolf Callaway didn’t discuss tariffs in nearly as much depth, instead simply stating it’s expecting a $22-million negative impact in Q2 related to hedging losses, the sales of the WGT computer game and tariffs.

Wake me up when September ends

It’s kind of hard to put an optimistic spin on Topgolf Callaway’s Q1 overall performance.

“Clearly, this is going to be an interesting year,” Brewer told investors. “But we believe we are well-positioned to create shareholder value.”

There are a few slivers for the optimists, however. Yes, sales were down $52 million and profits were down more than $4 million compared to last year. More than half of that sales drop is attributed to Topgolf while much of the rest can be chalked up to foreign currency exchange rates. The profit drop is related to a higher income tax expense.

Once Callaway and Topgolf split this September, Topgolf won’t be Callaway’s problem. Callaway’s core business sales for Q1 tallied $699 million. Golf Equipment’s operating income was up 25 percent in the quarter while the Active Lifestyle decrease was due to right-sizing the Jack Wolfskin business before announcing its sale to ANTA.

It remains clear, however, that September can’t come fast enough for Callaway.

Acushnet is steady, right?

It sure seems that way. Although Wall Street types are taking the Q1 profits with a $21-million grain of salt, a profitable quarter is a profitable quarter. Additionally, its $704 million in Q1 sales means Acushnet is back in the driver’s seat as golf’s top dog (taking Topgolf out of the equation, of course).

Topgolf Callaway is citing a soft consumer market and a crowded product launch cycle for its small drop in Q1 equipment sales. Acushnet, operating in that same soft consumer market and crowded product launch cycle, saw ball and club sales go up. Also, even though FootJoy experienced another down quarter and its 24-month performance has to be concerning, Topgolf Callaway’s Active Lifestyle business unit was having its own problems. Sales dropped five percent in the quarter. Meanwhile, the company’s high-profile 2018 acquisition is being sold off at a relative bargain price.

As to what it all means? Topgolf Callaway stock has dropped nearly 60 percent over the past 12 months. That usually turns up the boardroom heat on the CEO. Over that same time, Acushnet’s stock has risen considerably.

If you had money to invest, which one would you choose?

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