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Introduction & Market Context
Acushnet Holdings Corp (NYSE:GOLF) presented its first-quarter 2025 financial results on May 7, 2025, revealing a mixed performance as the golf equipment manufacturer navigates currency headwinds and looming tariff challenges. The company’s stock closed at $65.01 on May 6, down 1.14% ahead of the earnings presentation, with minimal movement in premarket trading.
The quarter showed resilience in Acushnet’s core golf equipment segments while facing challenges in its apparel business and certain international markets. This follows a strong fourth quarter of 2024, where the company exceeded expectations with an 8% year-over-year sales increase.
Quarterly Performance Highlights
Acushnet reported first-quarter net sales of $703.4 million, representing a slight decrease of 0.6% year-over-year, though the company achieved a 1.2% increase on a constant currency basis. Adjusted EBITDA declined 9.6% to $138.9 million, with margins contracting from 21.7% to 19.7%.
Despite these challenges, net income attributable to Acushnet Holdings increased to $99.4 million, compared to $87.8 million in the same period last year. Gross margin showed a slight decline to 47.9% from 48.4% in Q1 2024.
As shown in the following income statement highlights:
President and CEO David Maher noted continued strength and resilience from dedicated golfers, highlighting successful product launches including the Pro V1 and Pro V1x golf balls, HyperFlex and Quantum footwear models, and the GT1 metal extension and Scotty Cameron Studio Style putters.
Segment and Regional Analysis
Acushnet’s segment performance revealed divergent trends across its product categories. The company’s golf equipment segments showed solid growth, with Golf Balls increasing 2.5% to $213.3 million and Golf Clubs rising 1.9% to $207.8 million. Overall Titleist Golf Equipment sales grew 2.2% to $421.1 million. However, FootJoy Golf Wear experienced a 6.6% decline to $178.4 million, while Golf Gear increased 2.2% to $71.0 million.
The following chart illustrates the segment performance:
Regional performance also showed significant variations. The United States and EMEA markets demonstrated growth, with sales increasing 1.4% and 2.2% respectively. However, Asian markets faced headwinds, with Japan declining 5.4% and Korea dropping 12.1%. The Rest of World category showed a modest 1.7% decrease.
The regional breakdown is presented in the following chart:
CFO Sean Sullivan noted that the company continues to expand its golf equipment and footwear fitting networks globally, despite regional challenges in certain markets.
Balance Sheet and Cash Flow
Acushnet’s balance sheet showed some concerning trends, with unrestricted cash decreasing to $39 million from $51 million at the end of 2024, while total debt increased to $944 million from $764 million. The company’s net leverage ratio rose to 2.0x from 1.8x.
Cash flows from operations were negative at $(120) million compared to $(110) million in Q1 2024. Capital expenditures increased to $11 million from $7 million, while the company maintained its commitment to shareholder returns with $15 million in dividends and $37 million in share repurchases.
The following chart details the balance sheet and capital allocation:
The company’s adjusted EBITDA reconciliation provides further insight into its financial performance:
Outlook and Tariff Challenges
Acushnet maintained its previously issued consolidated full-year outlook for 2025, despite the mixed Q1 results. The company expects first-half sales to increase by low-single digits compared to 2024, with first-half adjusted EBITDA projected to decrease by low-single digits.
A significant challenge facing Acushnet is the impact of tariffs, with the company projecting a gross full-year 2025 tariff impact of approximately $75 million based on the current rate regime extending through December 31, 2025. About 70% of this impact relates to the China 145% tariff rate. The company expects mitigation actions to offset more than 50% of this impact.
The financial outlook is detailed in the following slide:
Management highlighted its durable and regionally diverse supply chains as key to mitigating tariff risks where possible. The company anticipates approximately $4 million in tariff impact in the second quarter, with most of the impact expected in the second half of the year due to current inventory levels.
The company’s product outlook and initiatives are summarized in the following slide:
Acushnet’s Q1 2025 presentation reveals a company navigating challenging market conditions while maintaining its position in core golf equipment segments. The significant tariff headwinds projected for the remainder of 2025 will be a key factor to watch, along with the company’s ability to execute its mitigation strategies and maintain its full-year guidance targets.
Full presentation:
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