Topgolf Callaway Brands Corp. MODG reported third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. However, the top and bottom lines declined on a year-over-year basis.
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MODG’s Q3 Earnings and Revenues
In the quarter under review, the company reported an adjusted earnings per share (EPS) of 2 cents, beating the Zacks Consensus Estimate of loss of 18 cents per share. In the prior-year quarter, the company reported an adjusted EPS of 19 cents.
Total revenues of $1.01 million beat the consensus estimate by 0.2%. However, the top line declined 2.7% year over year.
Topgolf Callaway Brands Corp. Price, Consensus and EPS Surprise
Topgolf Callaway Brands Corp. price-consensus-eps-surprise-chart | Topgolf Callaway Brands Corp. Quote
MODG's Segmental Discussion
Topgolf: Revenues of this segment amounted to $453.2 million, up 1.2% from the reported value of $447.7 million in the year-ago quarter. The segment's operating income came in at $28.3 million compared with $38.9 million reported in the prior year quarter. The downside can be attributed to lower same-venue sales (down 11% year over year) and increased depreciation related to new venues.
Segment-adjusted EBITDA came in at $84.4 million compared with $90.9 million reported in the prior-year quarter. Operating efficiencies and cost management at Topgolf venues, along with favorable shipment timing in the legacy business added to the positives.
Golf Equipment: Revenues of this segment amounted to $293.5 million, almost flat year over year. The segment's operating income came in at $26.8 million compared with $35.2 million reported in the prior year quarter. The downside was driven by increased freight costs.
Active Lifestyle: Revenues of this segment amounted to $266.2 million, down 11.1% from the reported value of $299.5 million in the year-ago quarter. The decline can be attributed to lower European wholesale revenues at Jack Wolfskin. The segment's operating income came in at $19.4 million compared with $40 million reported in the prior-year quarter.
MODG’s Operating Highlights
During the third quarter of 2024, the company’s total costs and expenses amounted to $979.2 million compared with $966.8 million reported in the prior-year period.
Adjusted net income during the quarter came in at $4.3 million compared with $35.8 million reported in the prior-year quarter.
Adjusted EBITDA during the quarter came in at $119.8 million compared with $163.3 million reported in the prior-year quarter.
Balance Sheet
As of Sept. 30, 2024, MODG’s cash and cash equivalents amounted to $441.9 million compared with $393.5 million as of Dec. 31, 2023. The company’s long-term debt (as of Sept. 30) was $1.46 billion compared with $1.52 million at the 2023 end.
For the nine months ended Sept. 30, 2024, the company’s net cash provided by operating activities was $338.7 million compared with $227.7 million reported in the prior-year period.
MODG’s Q4 & 2024 Outlook
For the fourth quarter of 2024, the company expects revenues to be approximately $885 million. It expects adjusted EBITDA to be in the range of $74-$84 million.
In 2024, the company anticipates revenues to be approximately $4.2 billion, compared with the previous projection of $4.2-$4.26 billion. The company expects adjusted EBITDA to be in the range of $560-$570 million compared with the previous expectation of $570-$590 million. MODG projects adjusted EPS in the range of 8-13 cents, down from the prior expectation of 11-21 cents.
MODG’s Zacks Rank
Topgolf Callaway sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
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