Titleist (Acushnet) Going Strong

While many golf manufacturers are stuck in decline, The Acushnet Company – parent to Titleist, FootJoy, Cobra, and Pinnacle – is going strong. The company started this year with net sales of $342.6 million, an increase of $3.7 milllion from a year ago. The golf divsion reported operating income of $56.7 million, a jump of $6.7 million from last year. The numbers indicate that Acushnet is doing quite well in the slightly downturned golf economy, not only boosting its bottom line but improving its efficiency.

The company’s first quarter is exciting, particularly when the company had trouble getting new Titleist equipment (905 drivers, 904 fairway woods, new putters, new spin-milled wedges, new balls) out the door before the end of the quarter.

Titleist net sales accounted for 51% of the quarter, FootJoy 30%, and Cobra the remaining 19%. As always, Titleist-branded golf balls led the charge and remain on top of the industry. Ball sales were up 8 percent on the strength of the new and improved Pro V1, Pro V1x, NXT, NXT Tour, and Dt SoLo models. US market share is holding strong in the 60% unit share and 70% dollar share ranges. Titleist golf balls remain #1 on all major professional tours as well.

The 905 driver is being played by the big players like Ernie Els and Adam Scott (both of whom have won twice this year), and the 904 fairway metals harken back to the famous “PT” fairway woods the company used to produce and is expected to be a top seller. Titleist iron sales have rested on a comfortable plateau for several years, but expectations for the 735 (Titleist’s first “combo set”) and the 660 are reaching stunning levels. Finally, three new Scotty Cameron putters and the new Bob Vokey spin-milled wedges should sustain or boost Titleist club sales.

Titleist isn’t the only dog in the pound, though, and FootJoy’s 30% is not to go overlooked. FootJoy is the brand leader with over 60% market share and has strong offerings (Classic Tour, DryJoys, Countour, eComfort, GreenJoys) in each market segment. Despite a national decrease in the number of rounds played, glove sales also remain strong with over 50% market share.

Cobra, accounting for 19%, is Titleist’s “low-end” club line. Cobra net sales were up 10.7% from a year ago, and a new advertising campaign with David Feherty is doing well. New clubs, like the King Cobra SZ and Comp, the King Cobra Inertia Series irons, and the King Cobra Baffler, will sustain Cobra club sales throughout the year.

Of all the factors that affect sales, weather may be the most influential this year. Rounds played is down about 4% in the first quarter according to an educated guess. As I look outside on April 25, I see snow in Pennsylvania and have played all of five full rounds this year.