As March rolls in, many layers of market volatility are seeping into the stock market. An escalating war in Europe, rising global oil prices and surging inflation are among the key macro concerns.
On Tuesday, Acushnet Holdings Corp. released its Full Year and Fourth Quarter 2021 Fiscal results into a stirred-up marketplace where those macro pressures may overshadow a solid year end for the blue chip golf stock.
Acushnet (NYSE: GOLF), the brand umbrella for Titleist, Footjoy and Scotty Cameron, announced full year net sales of $2,147.9 million, up 33.2% from last year and up 27.7% from 2019 — pre pandemic. David Maher, Acushnet’s president and CEO, expressed a confident note, saying “Acushnet wrapped up a terrific year, exceeding fourth quarter expectations as our team once again delivered in a challenging supply-side environment.”
Keys to successful sales results were high-segment performance and enhanced golfer participation. Maher said “we are encouraged by the game's momentum with U.S. rounds up 5% in 2021 and up 20% or almost 90 million rounds versus 2019. This increase over the past two years was aided by play from some 800,000 new golfers with juniors and women the fastest-growing segments as reported by the National Golf Foundation.”
Acushnet’s financial breakdown is available here. Titleist golf balls led the way, reporting year-end sales for the product category at $667.6 million, up almost 32% from 2020 year end. Close behind in profitability was FootJoy golf wear. The soft goods brand reported a 17.9% quarterly increase in net sales and a 39.8% yearly increase from 2020. On top of that, the category represented $580.6 million in net sales at the end of 2021.
Despite the high performance of heavy-hitting segments like golf balls and golf wear, Acushnet noted that the sales volume increase was somewhat offset by lower glove and club sales. In the United States, Acushnet saw a decrease of $11.1 million in sales for Titleist golf clubs. This dip in sales could be associated to a myriad of reasons — supply challenges, an increase in average club selling prices, upcoming product releases or a combination of the three. The financial report also outlined possible factors of decreased club sales, saying “sales volumes of our new T-Series irons launched in the fourth quarter of 2021 were offset by lower sales volumes of our TSi drivers and TSi fairways launched in the fourth quarter of 2020.”
Things look less extraordinary for Acushnet’s international business. Although there was only positive change in international sales in 2020, 2021 net sales were reportedly down 3.1% overseas, primarily driven by a decrease in Titleist golf club sales in Japan.
Maher expressed confidence for 2022, saying “golf industry fundamentals are strong, our trade partners are healthy and channel inventories are generally lean. Looking forward, we are enthused by strong golfer participation and remain committed to continuous improvement and innovation in all areas of our business, with exciting new product launches planned in every category."
To the new launches planned, Maher spoke of the AVX, Velocity and TruFeel golf balls, Vokey Design SM9 wedges and FootJoy's new Fuel footwear. Also, Titleist gear and Kjus apparel offerings with key performance and design enhancements are reasons for optimism.
