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Callaway Golf CEO: We can't even get tee times, golf courses are so busy

·Anchor, Editor-at-Large
·2 min read
In this article:
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You can tell the pandemic has caused a renaissance in the golf industry when the CEO of Callaway Golf is getting shut out on primetime slots to hit the links. 

"I was talking to my team and even we can't get tee times at local courses right now," Callaway Golf CEO Chip Brewer said on Yahoo Finance Live

That experience shows through in Callaway's third quarter results out on Tuesday night.

Sales in Callaway's golf equipment and apparel businesses rose 8.4% and 11.9%, respectively, from the prior year. The new acquired TopGolf saw an influx of traffic as mobility picked back up and group booking trends improved. TopGolf added $324 million in sales in the quarter, and $24 million in operating profits. 

Brewer said the company will open 10 more TopGolf locations over the next 12 months. 

Brewer added there are no delays to the company's 2022 product releases due to supply chain bottlenecks hurting many manufacturers.

Here is how Callaway Golf performed compared to Wall Street estimates for the third quarter:

  • Net Sales: $856 million vs. $845 million

  • Diluted EPS: $0.14 vs. $0.10

Shares of Callaway Golf rose 2% to $29.41 in afternoon trading. The stock has gained roughly 60% over the past year, outperforming the S&P 500's 31% gain. 

The Street by and large remains bullish on Callaway Golf headed into 2022, with analysts expecting another solid year of rounds played amid the new life schedules borne by the pandemic and retiring baby boomers.

MALLORCA, SPAIN - NOVEMBER 02: Callaway golf balls is seen during a preview day prior to the Rolex Challenge Tour Grand Final supported by The R&A at T-Golf & Country Club on November 2, 2021 in Mallorca, Spain. (Photo by Octavio Passos/Getty Images)
MALLORCA, SPAIN - NOVEMBER 02: Callaway golf balls is seen during a preview day prior to the Rolex Challenge Tour Grand Final supported by The R&A at T-Golf & Country Club on November 2, 2021 in Mallorca, Spain. (Photo by Octavio Passos/Getty Images)

"3Q results show just how strong the golf industry has rebounded. With WFH a sticky trend, boomers retiring, and new entrants to the sport growing (e.g. women, kids), we see a renaissance period for golf, in which Callaway (Equipment), Topgolf (Entertainment), Travis Mathew (Apparel), Ogio (Bags/Packs), and Jack Wolfskin (Outdoor Apparel) can all benefit for years to come. With sales/EBITDA$ bias to upside we believe shares could rise substantially from here," said Jefferies analyst Randal Konik. 

Konik — a long-time Callaway bull — rates the stock a Buy with a $60 price target. 

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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