Acushnet Holdings Reports Strong Q3 Growth Amid Challenges

Acushnet Holdings ((GOLF)) has held its Q3 earnings call. Read on for the main highlights of the call.

Acushnet Holdings recently held its earnings call, revealing a strong performance in revenue and EBITDA growth, particularly in the Titleist Golf Equipment segment and the EMEA region. Despite these positive results, the company acknowledged challenges such as gross margin pressure due to tariff costs, market softness in Japan, and increased interest expenses.

Strong Revenue Growth

Acushnet reported worldwide net sales of $658 million in the third quarter, marking a 5% increase on a constant currency basis compared to the previous year. Year-to-date sales reached $2.08 billion, up 4% from the prior year, showcasing the company’s robust revenue growth.

Adjusted EBITDA Growth

The company’s adjusted EBITDA for Q3 was $119 million, reflecting a 10% growth compared to the same period last year. Year-to-date, adjusted EBITDA stood at $401 million, a 2% increase, indicating steady profitability improvements.

Titleist Golf Equipment Momentum

Titleist Golf Equipment continued its upward trajectory with a 5% growth both in the quarter and year-to-date. This success was driven by the Pro V1 franchise and the launch of new Titleist T-Series irons and Vokey SM10 wedges.

Impressive EMEA Growth

The EMEA region posted a remarkable 14% gain in Q3 and is up 8% year-to-date, benefiting from favorable weather comparisons, further contributing to Acushnet’s overall growth.

Gross Margin Pressure

Despite the positive revenue figures, Acushnet experienced a gross margin decline, with Q3 margins at 48.5%, down 50 basis points from the previous year, primarily due to higher tariff costs.

Tariff Costs

The company recognized approximately $10 million in incremental tariff costs during Q3, with full-year expectations of $30 million, impacting overall profitability.

Japan Market Challenges

The Japanese market faced challenges, with a 13% decline in the quarter and a 7% decrease year-to-date, mainly due to softness in footwear and apparel sales.

Increased Interest Expense

Interest expenses rose to $14.5 million in the quarter, up by $1 million due to increased borrowings, adding to the financial pressures faced by the company.

Forward-Looking Guidance

Looking ahead, Acushnet expects full-year 2025 revenue to range between $2.52 billion and $2.54 billion, with projected adjusted EBITDA between $405 million and $415 million. The company remains optimistic about continued growth in the Titleist Golf Equipment segment and the EMEA region, despite challenges in other areas.

In summary, Acushnet Holdings’ earnings call painted a picture of strong revenue and EBITDA growth, driven by successful product launches and regional performance in EMEA. However, challenges such as tariff costs, market softness in Japan, and increased interest expenses were noted. The company remains optimistic about its future growth prospects, with positive guidance for the remainder of the year.