Callaway Golf (ELY) Tops Q1 EPS by 48c, Sales Easily Beat

Callaway Golf (NYSE: ELY) reported Q1 EPS of $0.62, $0.48 better than the analyst estimate of $0.14. Revenue for the quarter came in at $652 million versus the consensus estimate of $561.55 million.

"We are very pleased with our first quarter financial results, with revenues increasing 47% and Adjusted EBITDA increasing 113% in the first quarter of 2021 compared to the same period in 2020," commented Chip Brewer, President and Chief Executive Officer of the Company. "Our golf equipment business is continuing to experience unprecedented demand while our soft goods business and Topgolf business are recovering from the pandemic faster than anticipated. We believe our three operating segments are well positioned for both the current environment and our expectations over the next several years."

"Although the COVID-19 pandemic continues, especially in international markets, we are pleased with the current state and trends of our business," continued Mr. Brewer. "The Topgolf merger is off to a strong start; each of our businesses is performing ahead of plan; and our available liquidity, comprised of cash-on-hand and availability under our credit facilities, is at an all-time high of $713 million at March 31, 2021 compared to $260 million for the same date in 2020. As a result, we now project that full year 2021 revenue and Adjusted EBITDA levels will exceed 2019 levels for the legacy Callaway business and will meet or exceed the full twelve-month 2019 levels for the Topgolf business."

GUIDANCE:

Given the continued uncertainty related to both the COVID-19 pandemic globally as well as unsettled market conditions, the Company is not providing specific net revenue and earnings guidance ranges for 2021 at this time. The Company did, however, provide certain guidance on estimated 2021 performance. The Company previously guided that it was assuming that neither the Company's legacy Callaway business nor the newly added Topgolf business would achieve 2021 revenue or Adjusted EBITDA equivalent to 2019 levels. The Company has now revised those projections as its operating segments are recovering faster and performing better than expected. As a result, the Company now expects that revenue and Adjusted EBITDA for full year 2021 for the legacy Callaway business will exceed 2019 levels and for the Topgolf business will meet or exceed the full twelve-month 2019 levels. For reference, in 2019, the Callaway legacy business reported revenue of $1.70 billion and Adjusted EBITDA of $211 million and the Topgolf business reported revenue of $1.06 billion and Adjusted EBITDA of $59 million. Callaway's reported full year financial results will only include 10 months of Topgolf results in 2021 and therefore will not include January and February results which were in the aggregate $143 million in revenue and $2.3 million in Adjusted EBITDA.

For earnings history and earnings-related data on Callaway Golf (ELY) click here.

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