Acushnet Holdings Corp. Q4 FY2024 earnings call

• 2024 Performance: Fourth quarter sales $445 million, up 8%, adjusted EBITDA $12.4 million; full-year sales $2.46 billion, up 4% constant currency, adjusted EBITDA $404 million, up 7.5%.
• 2025 Plans: Strategic investments in global fitting network for golf equipment and footwear, expand B2B and D2C capabilities, invest in Titleist Performance Institute. Dividend increased 9% to $0.235 per share, share repurchase authorization increased.
• 2025 Outlook: Reported net sales projected $2.485 - $2.535 billion, constant currency growth 2.6%-4.6%; adjusted EBITDA projected $405 - $420 million. First quarter expected to have foreign currency headwind of $10 - $15 million.

Titleist Golf Equipment: Fourth quarter net sales up 7.4%, full-year net sales up 7%. Golf ball sales in 2024 grew 4%, driven by balanced growth across Pro V1 and performance models. Golf clubs overall sales up double digits in 2024. Gear segment: Fourth quarter net sales up 17.3%, full-year growth 5%, led by travel category. FootJoy: Fourth quarter net sales grew 1.9%, full-year down 2%, gains in U.S. offset by international declines. Other category: Continued growth of shoes Golf in U.S. and U.K., softness in Asia's Titleist apparel market.

• Reported net sales for 2025 projected $2.485 billion to $2.535 billion, with an estimated $35 million negative impact from foreign currency year-over-year.
• On constant currency basis, consolidated net sales expected up 2.6% to 4.6% compared to 2024.
• Full-year adjusted EBITDA expected $405 million to $420 million.
• First quarter net sales expected below prior year due to $10 million to $15 million foreign currency headwind, impacting adjusted EBITDA negatively.

• Macro-economic challenges in regions like Japan and Korea.
• Tariff and trade uncertainty, with 10% China tariff incremental equating to approximately $7 million headwind.
• Supply chain risks despite footwear manufacturing move from China to Vietnam.

Q: Joseph Altobello asked about the 300 basis points increase in gross margin, with PTO benefit accounting for half. What drove the other half?

A: Sean Sullivan said continued performance in the Golf Equipment segment with growth across product segments on the top line and a more normalized supply chain moderating freight distribution environment.

Q: Joseph Altobello asked about quantifying investments in 2025 and if they are one-time.

A: David Maher said they don't quantify how much hits in '25 but some will be outsized in '25 and normalize in out years. Sean Sullivan said 2025 brings consistent or expanding gross margin and the global ERP is multi-year while building out the fitting network globally will continue.

Q: Matthew Boss asked about the health of the golf industry and rounds played in 2025.

A: David Maher said golfers are in pretty good shape, rounds expected to be flat with inputs like golfer supply and participation rates healthy, but macro-economic pressures exist in some regions.

Q: Matthew Boss asked about gross margin and channel inventory health.

A: Sean Sullivan said channel inventory is very good, and gross margin benefits from higher ASPs, normalized supply chain, and freight environment, with owned distribution center driving efficiencies.

Q: Michael Swartz asked about unit volume and pricing in organic growth and tariff commentary.

A: David Maher said it's a combination of unit growth and pricing, particularly on equipment side. Sean Sullivan said guidance doesn't include potential tariffs, isolating the $7 million China tariff impact.

Q: John-Paul Wollam asked about Pro V1 in 2025 and FootJoy's trough.

A: David Maher said Pro V1 2025 is product, fitting, and marketing driven. For FootJoy, confidence comes from product pipeline, price actions, and normalized footwear market.

Q: Noah Zatzkin asked about competitive environment and Korea.

A: David Maher said competitive environment normal, Korea is a resilient market but with apparel market softness due to macro forces.