GOLF Q2 Deep Dive: Tariff Headwinds Cloud Solid Equipment Demand

Golf equipment and apparel company Acushnet (NYSE:GOLF) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 5.4% year on year to $720.5 million. Its non-GAAP profit of $1.40 per share was 0.9% above analysts’ consensus estimates.

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StockStory’s Take

Acushnet’s second quarter results were met with a significant negative market reaction, despite the company delivering revenue and adjusted profit above Wall Street expectations. Management cited ongoing strength in the Titleist Golf Equipment and Gear segments as key drivers, with CEO David Maher highlighting robust demand for new Pro V1 golf balls and initial traction for the T-Series irons. Still, external pressures—most notably rising tariffs and macro uncertainty—were focal points, with Maher acknowledging, “We are confident in our ability to manage all that is in our control,” but operating with clear caution.

Looking ahead, Acushnet’s outlook is shaped by continued demand for premium golf equipment and apparel, but also by the company’s efforts to mitigate the impact of escalating tariffs and an uncertain consumer environment. Management expects low single-digit sales growth in the second half but emphasized that volatility in tariff rates and consumer spending could influence results. CFO Sean Sullivan stated, “We continue to closely monitor developments in the dynamic tariff landscape and broader macroeconomic environment,” underscoring a strategy focused on flexible supply chain management and selective pricing actions.

Key Insights from Management’s Remarks

Management attributed the quarter’s solid sales to new product launches and broad-based regional growth, while also highlighting proactive responses to tariff challenges and evolving consumer trends.

• Titleist equipment momentum: The launch of new Pro V1 golf balls and GT Metals fueled mid-single-digit growth in the Golf Equipment segment, supporting strong performance across all regions, especially the U.S. and EMEA.
• Product pipeline execution: Introduction of the T-Series irons in July met internal expectations, with early sell-through data indicating healthy market adoption and setting a positive tone for future launches.
• FootJoy repositioning: FootJoy experienced a slight sales decline but benefited from a shift toward premium performance footwear, such as the Premier and HyperFlex lines, leading to improved profitability and reduced reliance on discounted products.
• Tariff mitigation strategies: In response to $5 million in tariff-related costs this quarter, management is optimizing the company’s supply chain, implementing vendor sharing programs, and pursuing selective price increases, particularly in gear, footwear, and apparel.
• Regional normalization: While U.S. and EMEA regions remained resilient, management acknowledged ongoing correction in Asian apparel markets—especially Korea and Japan—where increased competition has led to a rationalization process, though equipment sales trends remain stable.

Drivers of Future Performance

For the remainder of the year, Acushnet’s outlook hinges on sustained demand for premium golf equipment, careful supply chain management, and the company’s ability to offset tariff-related margin pressures.

• Tariff headwinds and mitigation: Management expects tariffs to impact operating costs by roughly $30 million in the second half, with efforts underway to mitigate over half of that through supply chain shifts and selective price increases, particularly in non-equipment segments.
• Consumer resilience and demand: The company’s dedicated golfer base has proven relatively insulated from economic swings, but management continues to monitor for signs of pricing fatigue, especially as tariff-driven price increases work through the marketplace.
• Asia market stabilization: Apparel and gear demand in Japan and Korea has been soft due to post-pandemic corrections and heightened competition, but management anticipates stabilization, with equipment sales in those markets remaining steady and some new entrants expected to exit.

Catalysts in Upcoming Quarters

Going forward, our analyst team will be monitoring (1) the pace and success of new product launches, especially the T-Series irons, (2) the effectiveness of tariff mitigation strategies and their impact on gross margins, and (3) stabilization and recovery in the Asian apparel and gear markets. Additionally, we will track inventory trends as a sign of underlying consumer health and management’s ability to adapt to a shifting tariff environment.

Acushnet currently trades at $74.88, down from $79.71 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).

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