Topgolf Callaway 2022 Financials – Key Takeaways
2022 whole gross sales hit practically $3.996 BILLION
5-percent improve over 2021
Topgolf topped the corporate in income
Full-year internet revenue of $158 million
The Topgolf Callaway 2022 financials inform a number of completely different tales.
And for those who’re a shareholder in Topgolf Callaway, none of them seems to be unhealthy.
Topgolf Callaway Manufacturers topped $3.995 billion in 2022. That’s a 27.5-percent improve over 2021’s record-setting 12 months, regardless of taking a virtually $150 million hit on overseas forex change.
It could be a little bit of a shock however the Topgolf division now could be the corporate’s high revenue producer. It accounts for practically 40 % of all of Callaway’s income.
There’s a lot to debate, however earlier than we do, we have to challenge our commonplace MyGolfSpy disclaimer. We’re not nor will we declare to be monetary specialists, funding counselors or Wall Road-level enterprise analyst varieties. We’re golf trade geeks who prefer to learn.
Topgolf Callaway 2022 Financials: $4 BILLION?
As Maxwell Sensible would have stated, “Missed it by that a lot.” Truly, checked out barely in another way, Topgolf Callaway would have simply hit the $4-billion mark in gross sales if the U.S. greenback wasn’t so robust abroad. A powerful greenback is nice for those who’re a vacationer. However it devalues gross sales for U.S. firms that promote a variety of stuff elsewhere on this planet. As talked about, the robust greenback put a virtually $150-million dent in Topgolf Callaway’s high line.
Regardless of that, all three Topgolf Callaway divisions (Topgolf, Golf Tools and Lively Life-style) topped $1 billion in gross sales.
“2022 was an excellent 12 months for Topgolf Callaway Manufacturers,” CEO Chip Brewer informed buyers in a ready assertion final week. “Our efficiency was pushed by a mix of Topgolf’s new venue growth and identical venue gross sales progress, very robust shopper reception of our Rogue golf golf equipment and Chrome Gentle golf balls and continued model momentum within the Lively Life-style phase.”
For the 12 months, Topgolf gross sales reached practically $1.5 billion, up 42.4 % over 2021. That improve contains 11 new Topgolf venues in addition to the actual fact the Callaway-Topgolf merger didn’t occur till early March of 2021. Golf Tools gross sales had been up 14 % globally to $1.4 billion. And Lively Existence gross sales, which embody TravisMathew, Jack Wolfskin and OGIO, plus gear and equipment, had been up greater than 27 %. The division topped the $1-billion mark for the primary time.
How large has Callaway turn out to be? Take any a kind of enterprise items out of the image and the corporate nonetheless rivals Acushnet as the largest firm in golf.
Breaking Down the Numbers
Calling Topgolf Callaway a golf firm is like calling Common Electrical a fridge firm. It’s nonetheless a powerhouse in golf gear however over the previous 5 years it has morphed right into a golf way of life assortment of manufacturers that has turn out to be a juggernaut.
As talked about, the Topgolf Callaway 2022 financials present all three enterprise items every topped $1 billion in gross sales final 12 months. And every division posted double-digit progress. The image is much more astounding when taking into consideration the damaging influence of the robust U.S. greenback. In fixed forex phrases (utilizing final 12 months’s greenback worth), Golf Tools gross sales jumped practically 20 % globally whereas Lively Life-style gross sales elevated 36 %.
Regionally, U.S. gross sales had been practically $2.8 billion (up 35 %) whereas European gross sales topped $537 million (up 22 % in fixed forex). Gross sales in Asia topped $545 million ((up 32 % in fixed forex) whereas the corporate’s Remainder of World division hit $115 million in gross sales. That’s an 18.5-percent improve in fixed forex.
Drilling down into every phase, Callaway golf membership gross sales hit practically $1.1 billion globally (up 16 % in fixed forex) whereas golf ball gross sales exceeded $309 million. That’s a 36-percent fixed forex improve and good for a 21-percent golf ball market share within the U.S.
Attire gross sales had been up greater than 35 % in fixed forex at just below $632 million. Gear, equipment and different (suppose gloves, hats, baggage and different Callaway-branded doo-dads) topped $408 million. That’s a 34-percent improve in fixed forex.
In response to Callaway, these jumps are attributable to quantity will increase in addition to value will increase.
The Topgolf Half
It’s no secret the Topgolf merger/acquisition has put Topgolf Callaway into a special stratosphere. Direct income of $1.477 billion, plus one other $72 million in ancillary promoting revenue, will do this for you.
As talked about, Topgolf now could be the largest income phase within the firm. It accounts for 39 % of Topgolf Callaway gross sales. Golf Tools is available in at 35 %.
General, Topgolf Callaway is reporting $158 million in internet revenue for the 12 months. That’s down significantly from 2021’s revenue of $322 million. Most of that posted revenue, nevertheless, wasn’t money. The Topgolf merger represented a $252-million non-cash acquire. With out that acquire, Callaway’s earnings had been practically $138 million in 2021.
Oddly, Topgolf revenue was solely $77 million on greater than $1.5 billion in gross sales. That appears a bit out of whack but it surely is smart after factoring in oblique bills. There’s $125 million in depreciation and amortization, $280 million in venue capital expenditures and $941 million in venue financing legal responsibility bills. A greater indicator of Topgolf’s efficiency is its contribution to adjusted EBITDA (Earnings Earlier than Curiosity, Taxes, Depreciation and Amortization) which was $235 million.
Eleven Topgolf venues opened in 2022 which, mixed with progress in same-venue gross sales and a full 12 months within the company umbrella (in comparison with solely 10 in 2021), sparked a 42-percent progress in income. Topgolf Callaway absolutely expects that progress to proceed in 2023 with income projected to hit $1.9 billion.
Topgolf Callaway does anticipate Golf Tools to be flat in 2023 and Lively Life-style to develop within the low teenagers percentage-wise. General, 2023 income is projected to hit $4.4 billion with EBITDA projected to hit $620 to $640 million with half coming straight from Topgolf.
Topgolf Callaway Financials: Spicy Tidbits
It’s the percentages and ends that make monetary reviews fascinating. As an illustration, it’s inconceivable to glean from these reviews simply how a lot of a golf membership’s value is tied to advertising and participant sponsorship. The very best we will see is Price of Items Bought however that features tender items in addition to laborious items. We will additionally have a look at Promoting, Common and Administrative Bills, which incorporates Advertising. However it additionally contains just about all overhead, together with salaries and commissions for everybody from the CEO to the upkeep workforce.
For what it’s price, that expense was roughly $970 million in 2022. R&D is a separate line merchandise for Topgolf Callaway. That expense topped $76 million or roughly three % of product gross sales.
In its investor presentation, Topgolf Callaway shared some startling stats from the Nationwide Golf Basis. In 2022, for the primary time ever, off-course golf participation exceeded on-course participation. Of the estimated 41.1 million golf individuals, 15.5 million had been off-course solely whereas 13.2 million had been on-course solely. One other 12.4 million did each.
Demographically, the off-course-only individuals pattern youthful, with a median age of 31, and extra various. Forty-one % are feminine and 40 % determine as non-white. Forty % report a median annual revenue in extra of $100,000 whereas 54 % say they’re financially “comfy.”
On-course-only golfers pattern older (46), whiter (78 %) and male (72 %). They’re additionally extra prosperous: 42 % make over $100,000 and 54 % say they’re financially comfy.
Those that do each have a median age of 42. Twenty-three % are feminine and 22 % are non-white. They’re extra prosperous, with 52 % incomes greater than $100,000 and 55 % figuring out as financially comfy.
The Topgolf Impact?
Topgolf is ideal for the non-golfer to take a couple of whacks, take pleasure in a couple of drinks and have a couple of laughs. So the concept that off-course-only golf is larger than on-course-only golf most likely shouldn’t be a shock. However what might shock you is that Topgolf has turn out to be a reputable golf “feeder” system.
In response to the Nationwide Golf Basis, 10 % of present green-grass golfers credit score Topgolf for introducing them to the sport and getting them out on the course.
“For each 11 new Topgolf venues we ship yearly, we anticipate so as to add roughly three to 4 million distinctive guests,” Brewer informed buyers final week. “With our venue growth, we see a transparent path to structural progress for the trendy golf ecosystem, a pretty market by which Topgolf Callaway Manufacturers is uniquely positioned to guide.”
The corporate is planning to open 11 extra Topgolf venues this 12 months. Not too long ago opened venues embody precise membership becoming facilities which create direct-to-consumer gross sales alternatives. These gross sales will likely be at full retail pricing as it could be silly for Topgolf Callaway to undercut its retail companions. Any gross sales via these venues, nevertheless, will likely be on the highest margins doable.
Callaway clearly put Acushnet in its rearview mirror when it merged with Topgolf. Acushnet’s 2022 financials must be out by the top of February however, by all accounts, it ought to expertise one other banner 12 months. And final week’s Membership Glove deal exhibits Acushnet is in full progress via acquisition mode. It’s attention-grabbing to notice that for those who took Topgolf out of the equation, the 2 firms can be neck and neck for golf supremacy. And TaylorMade, whereas privately owned, isn’t far behind.
However you possibly can’t take Topgolf out of the equation and that places Topgolf Callaway in a singular and unchallenged place as the sport’s high canine.
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