Callaway Golf Company (NYSE: ELY) has announced its 2015 first quarter financial results. Overall, compared to what the Company originally anticipated, first quarter 2015 net sales decreased slightly but its earnings were higher. As a result, the Company is decreasing its full year revenue estimate to $840 million – $860 million (compared to its prior estimate of $855 million – $880 million). The Company, however, is increasing its full year earnings per share estimate to ($0.03) – $0.04, (compared to its prior estimate of ($0.09) – $0.01), as a result of continued manufacturing improvements and a better sales mix.
For the first quarter of 2015, the Company reported net sales of $284 million, or a decrease of 19%, compared to $352 million in the first quarter of 2014. Most of this decrease was expected. The Company had previously estimated that the decrease in first quarter 2015 net sales would be in the mid-teens (as a percent of net sales), primarily as a result of a planned strategic shift in product launch timing, but also as the result of weaker foreign currency rates and an anticipated decrease in first quarter sales in Japan due to the consumption tax increase which took effect in April 2014.
Since providing such guidance, the U.S. Dollar strengthened further and market conditions, particularly in Asia, showed less improvement than anticipated. These factors ultimately resulted in a slightly greater than anticipated decrease in net sales for the first quarter of 2015, and the Company has revised its full year sales guidance to reflect this decrease.
Also for the first quarter of 2015, the Company reported earnings per share of $0.39 compared to $0.61 per share for the same period last year. This performance is better than anticipated due in part to better than expected gross margins and other income/expense. The Company expects these results to carry through the year and therefore has increased its full year earnings guidance as discussed above.
“Although sales for the first quarter were slightly lower than we expected, overall I feel good about the business and our continued progress,” commented Chip Brewer, President and Chief Executive Officer. “Our brand momentum and market shares continue to improve and our profitability exceeded our expectations due in part to continued improvements in our manufacturing and supply chain along with tight cost management. The first quarter effect from the strategic shift in product launch timing and the consumption tax increase in Japan should smooth out as the year progresses. In addition, some regions are just beginning to open up for the new golf season and we are cautiously optimistic for improved market conditions as the year progresses.”
“We continue to realize the benefits from the many changes we have made in our business over the last few years,” continued Mr. Brewer. “As a result of these changes, we have generated increased consumer interest in our products, improved our operating efficiencies, and improved overall profitability. While there is certainly more work to be done, I believe we have set the foundation for steadily improved financial performance and long-term shareholder value.”
Callaway Golf Company manufactures and sells golf clubs and golf balls, and sells golf accessories, under the Callaway Golf® and Odyssey® brands worldwide.
Callaway Golf Company www.callawaygolf.com
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