KEY TAKEAWAYS:
- TravisMathew grew during the second quarter and beat internal expectations, with CEO Chip Brewer citing early momentum from a revised men’s merchandising strategy and continued strength in women’s.
- Callaway Golf said U.S. rounds played were up about 4% year to date, calling the golf consumer resilient against soft consumer confidence, higher gas prices and rising equipment costs.
- Callaway Golf raised its full-year 2026 forecast after a second quarter that beat its own outlook, with net sales up 2% (2.8% constant currency) to $612.2 million and GAAP net income from continuing operations up 66.6% to $75.8 million.
Callaway Golf Company said TravisMathew turned in a strong second quarter, growing and finishing slightly ahead of internal expectations even as the broader golf apparel and gear business faced timing and currency headwinds, executives said on the Carlsbad, Calif.-based company’s August 4 earnings call.
“I’m really pleased with the TravisMathew results,” President and CEO Chip Brewer said. “That business grew during the quarter. We’ve had a successful launch of the women’s category that continues to do well. And year to date, (we are) really pleased with the impact of our revised men’s strategy where we’ve changed some of our focus, our product pillars, our merchandising strategy.”
Brewer described the men’s business as being in “the early innings” of that merchandising shift but said the consumer reaction so far has him optimistic, with the brand posting strong results in both direct-to-consumer and wholesale channels in the first half.
The company also confirmed plans to close four underperforming TravisMathew stores in the fourth quarter, two of which had already been announced. The closures will bring the fleet to 61 stores heading into 2027.
Brewer described the store closures as consistent with the same disciplined approach the company has applied to SKU rationalization across both the Callaway and TravisMathew brands, and said the closures shouldn’t be seen as anything different from what the company has been doing over the past year. He added that the moves are intended to strengthen the long-term structure and profitability of the business.
At the segment level, TravisMathew’s growth helped offset a softer quarter for the broader Apparel, Gear and Other segment, where net sales fell 3.6% (2.5% constant currency) to $181.9 million. The company attributed the segment decline primarily to the timing of shipments between the first and second quarters and foreign exchange headwinds in Asia.
Golf Market Called Resilient Despite Economic Headwinds
Brewer spent much of his prepared remarks on the health of the broader golf market, describing a golfer base that has stayed engaged despite a mix of economic pressures.
“One can’t help but be impressed by the resilience of the golf consumer,” Brewer said in his prepared remarks, pointing to dynamic macroeconomic and political conditions, low consumer confidence readings, higher gas prices, rising golf equipment pricing and the World Cup as headwinds the golfer base has absorbed without pulling back. He said Callaway Golf believes it grew golf equipment revenue faster than the market in every major region for the year to date.
Asked later about underlying demand, Brewer said golfers “are not sensitive to mild economic disturbances or even mild recessions,” adding that “the long-term tailwinds that we see in golf seem to be clearly intact.”
On more recent trends, Brewer noted some softening in the market around the World Cup in July that improved afterward, adding that the impact has already been factored into the company’s forecast.
Second-Quarter Results Beat Expectations
Companywide net sales increased 2% (2.8% constant currency) year over year to $612.2 million, exceeding the midpoint of the company’s own forecast by approximately $15 million. GAAP net income from continuing operations rose 66.6% to $75.8 million.
For the first half, net sales increased 5.7% (5.5% constant currency) and net income from continuing operations increased 38.4% to $150.7 million.
Golf Equipment net sales rose 4.5% (5.3% constant currency) to $430.3 million, driven by strength in both clubs and balls.
Full-Year Forecast Raised, Tariff Picture Improves
Callaway Golf raised its full-year 2026 net sales forecast to a range of $2.045 billion to $2.070 billion, an increase of $15 million at the midpoint. Lynch said the increase reflected the second quarter beat and a $5 million organic raise to the second-half outlook, partially offset by foreign exchange headwinds.
The company now expects full-year gross tariff expense of approximately $43 million, a $7 million improvement from its prior forecast, after new Section 301 tariffs of 10% to 12.5% came in below the 20% rate the company had previously assumed.
Callaway Golf also said it continues to expect up to nearly $50 million in aggregate tariff refunds, having already received all of its Phase 1 refunds and a portion of Phase 2.
