Golf in the U.S. is growing for the first time in five years as an economic recovery strengthens enough to be measured in the clubs, cleats and plaid shorts that fuel the sport’s $25 billion consumer market.
The number of rounds played on American golf courses has climbed for four straight months through February. Club maker Callaway Golf Co. (ELY) (ELY), mower-maker Toro Co. (TTC) (TTC) and Nike Inc. (NKE) (NKE), which makes golf gear and clothes, are registering revenue growth and stock gains outpacing the Standard & Poor’s 500 Index.
The rebound is reflected on the links. Americans are feeling secure enough in their jobs to increase leisure spending, returning to a sport basking in the media spotlight with this week’s Masters Tournament and Tiger Woods’s first PGA victory in more than two years.
“It will probably be the strongest year since the recession,” Cindy Davis, president of the golf unit of Beaverton, Oregon-based Nike, said in an interview. “I’d say it’s definitely one of the indicators that maybe consumer confidence is coming back.”
In the past few years, rounds played on U.S. courses dwindled as unemployment surged to 10 percent in 2009, and golf courses closed after a building boom mirroring the housing bubble that started to burst in 2006.
The number of golfers dropped to 26.1 million in 2011 from about 30 million in the middle of last decade, said Greg Nathan, a senior vice president for the National Golf Foundation.
“We were bouncing along the bottom and expect we’ll see a modest recovery in 2012,” said Nathan. “The signs since the beginning of the year have been positive.”
‘Tiger is Back’
Sales of clubs, balls, shoes and other equipment measured from 600 pro shops and 250 off-course golf specialty stores rose 1.3 percent last year to $2.41 billion, reversing a slide since 2007, said Tom Stine, co-founder of Golf Datatech LLC, which provides statistics on golf-related sales.
Sales probably will accelerate this year, he said, though they remain below the 2007 peak of $2.91 billion.
“There’s been a lot more attention being paid to the PGA tour this year,” Stine said. “Tiger is back playing a lot.”
Textron Inc.’s (TXT) (TXT) Jacobsen unit, which sells golf mowers, sprayers and machines that rake sand bunkers, has seen purchases increase as returning players bolster golf courses’ budgets.
“We’re pretty much riding the wave of the economy right now,” said Glenn King, marketing manager for Jacobsen. “We’re seeing a lot of pent-up demand.”
“We are rebounding and like what we’re seeing in terms of the recovery,” he said.
Nike Golf’s Davis, who took over as the unit’s president at the beginning of 2009 when the industry was in free fall, finally will reap the benefit of new club and ball designs that the company invested in during the lean years.
“It’s going to be a good year for Nike Golf,” Davis said. “It will be a year where the industry will see more positives than it has in the past three years.”