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One of the golf industry’s leading golf equipment manufacturers, Callaway Golf recently reported its first quarter operating results and they look similar to corporate spreadsheets around the world.
The company’s first quarter revenues ($272 million) dropped 26 percent from first quarter sales in 2008 ($366 million). Sales for metal woods were off by 31 percent ($36.6 million), iron sales plunged 32 percent ($31.3 million), putters sank 20 percent ($6.8 million) and golf ball sales rolled downward by 19 percent ($11 million). However, despite the decreases in sales volume, Callaway still squeezed out a profit of $6.8 million. In 2008, the company’s reported profit was $39.7 million.
“The widespread global economic downturn accelerated from the fourth quarter of '08 into the first quarter of '09, resulting in reductions in retail traffic of greater magnitude than originally anticipated,” stated Callaway CEO George Fellows. “This was compounded by heightened retailer reluctance to carry traditional, beginning-of-season inventories. We are clearly disappointed in the manner in which the year has started. However, we firmly believe that the golf industry will recover as the economy recovers.”
Fellows explained that the short-term outlook remains unclear, but he believes there is evidence that indicates the failing economy has bottomed out and the golf industry will recover with the rest of the economy.
“I really believe that the golf industry has gone through or is going through a fairly short-term hiccup because of the economy,” he said. “The fact is that people are out there buying product, they’re out there playing golf.”
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