GOLF - Acushnet Holdings Corp. (GOLF) Q1 2024 Earnings Call Transcript

2024-05-07 13:02:02 ET

Acushnet Holdings Corp. (GOLF)

Q1 2024 Results Conference Call

May 07, 2024 08:30 AM ET

Company Participants

Sondra Lennon - VP, FP&A and IR

David Maher - President and CEO

Sean Sullivan - CFO

Conference Call Participants

Matthew Boss - JPMorgan

Megan Alexander - Morgan Stanley

Randy Konik - Jefferies

Joe Altobello - Raymond James

Casey Alexander - Compass Point

Mike Swartz - Truist Securities

Noah Zatzkin - KeyBanc Capital Markets

JP Wollam - Roth MKM

Presentation

Operator

Good morning, everyone. And welcome to the Acushnet Holdings Conference. My name is Chatch, and I'll be coordinating this call today [Operator Instructions]. I would now like to pass the conference over to your host, Sondra Lennon, Vice President of FP&A and Investor Relations. Please go ahead.

Sondra Lennon

Good morning, everyone. Thank you for joining us today for Acushnet Holdings Corp's first quarter 2024 earnings conference call. Joining me this morning are David Maher, our President and Chief Executive Officer; and Sean Sullivan, our Chief Financial Officer. Before turning the call over to David, I would like to remind everyone that we will be making forward-looking statements on the call today. These forward-looking statements are based on Acushnet's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations. For a list of factors that could cause actual results to differ, please see today's press release, the slides that accompany our presentation and our filings with the US Securities and Exchange Commission. Throughout this discussion, we will make reference to non-GAAP financial metrics, including items such as net sales on a constant currency basis and adjusted EBITDA. Explanations of how and why we use these metrics and reconciliations of these items to the most directly comparable GAAP metric can be found in the schedules in today's press release, the slides that accompany this presentation and in our filings with the US Securities and Exchange Commission. Please also note that references throughout this presentation to year-on-year sales increases and decreases are on a constant currency basis unless otherwise stated as we feel this measurement best provides context as to the performance and trends of our business. And when referring to year-to-date results or comparisons, we are referring to the three month period ended March 31, 2024 and the comparable three month period in 2023. With that, I'll turn the call over to David.

David Maher

Thanks, Sondra. And good morning, everyone. As always, we appreciate your interest in Acushnet Holdings. I am pleased to report on a strong start to the year for Acushnet led by our momentum in golf balls and Clubs, supported by continued supply chain enhancements and better than expected start-up at our new North American distribution center. As is customary, in Q1, we launched a wide range of new products across our portfolio, helping to deliver worldwide net sales of $708 million, a 4% constant currency increase over last year. This contributed to adjusted EBITDA of $154 million, a 5% gain for the quarter. Global interest in golf and rounds of play continue to be healthy. US rounds were up 21% in March and 7% for the quarter, positive trends particularly given poor weather across the southeast. Conversely, rounds were off 9% and 12% in Korea and the UK where elevated rainfall caused delayed starts to their seasons. These weather related puts and takes are common for Q1 and inline with the widely held belief that the golf season more often than not starts with the Masters in early April. Getting to our segment results, you see golf ball sales increased 9% in the quarter, which is noteworthy given the steep comp against last year's sizable Pro V1 launch and 21% growth. This gain was led by double digit growth in the US. We successfully launched new AVX, Tour Soft and TruFeel models in the quarter and also benefited from greater than expected demand fulfillment in our Pro V1 loyalty rewarded program in March. This golf ball success was supported by an especially fast start on the PGA Tour, where Titleist golf balls were used by the winners of 16 of the first 18 events of the 2024 season....

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