GOLF Q1 Earnings Call: Tariff Pressures and Supply Chain Adaptation Dominate Discussion

Golf equipment and apparel company Acushnet (NYSE:GOLF) reported Q1 CY2025 results beating Wall Street’s revenue expectations, but sales were flat year on year at $703.4 million. Its non-GAAP profit of $1.39 per share was 2.6% above analysts’ consensus estimates.

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StockStory’s Take

Acushnet’s first quarter performance was shaped by continued momentum in its Titleist golf equipment and gear segments, with growth attributed to the launch of new Pro V1 and Pro V1X golf balls and expansion of the GT Metals franchise. CEO David Maher highlighted that gains were achieved in every region, even as the U.S. market faced a slow start due to weather and FootJoy sales declined because of lower closeout volumes and targeted product rationalization. Management noted that the company’s supply chain flexibility allowed it to navigate regional volatility, especially as EMEA and Japan posted growth, while Korea and Japan were impacted by soft apparel demand and weather-related delays.

Looking forward, Acushnet’s outlook is heavily influenced by tariff-related uncertainties and the company’s ongoing mitigation strategies. Management expects over half of the current $75 million gross tariff impact to be offset in 2025 through supply chain adjustments, vendor negotiations, and selective pricing actions if necessary. CFO Sean Sullivan stated, “We are very focused on how we redirect certain activities to markets and sourcing into the United States at the lower tariff rate,” emphasizing that pricing will be a last resort. The company also anticipates further relief in 2026 from repositioning its sourcing and supply chain, while monitoring consumer demand trends and weather conditions that typically influence golf participation and sales.

Key Insights from Management’s Remarks

Management attributed the quarter’s results to new product launches in the Titleist segment, supply chain resilience, and proactive moves to address tariff exposure.

• Titleist product launches: The successful introduction of new Pro V1 and Pro V1X golf balls, along with the expanded GT Metals line, drove equipment sales growth across all major regions. Management cited strong initial consumer response, especially in EMEA, where favorable weather boosted early season demand.
• FootJoy performance and strategy: FootJoy sales were down due to lower closeout volumes and intentional product rationalization. However, leadership emphasized a focus on higher-margin premium products and indicated that, after a prolonged period of footwear inventory correction, the market is returning to more typical seasonal patterns.
• Regional market dynamics: EMEA posted robust gains, particularly in equipment and gear, while Asia—specifically Japan and Korea—faced a slow start from weather but eventually saw improved conditions. Apparel in Korea remains under pressure due to a correction in the super premium segment, which management flagged as a significant but expected headwind.
• Tariff mitigation actions: Facing a projected $75 million gross tariff impact in 2025, Acushnet is leveraging its diversified supply chain to reroute sourcing and production for clubs, gear, and accessories. Management outlined ongoing efforts to shift clubhead sourcing away from China to Vietnam and Taiwan, and to address tariff exposure for golf balls and footwear.
• Capital allocation and inventory discipline: The company maintained strong liquidity and inventory management, reporting a stable net leverage ratio and comfortable inventory levels. Capital expenditures and shareholder returns remain guided by market conditions, while ongoing mitigation efforts are expected to result in further supply chain efficiencies.

Drivers of Future Performance

Acushnet’s outlook for the coming quarters will center on tariff mitigation, supply chain adaptation, and evolving consumer behavior in key regions.

• Tariff and supply chain adjustments: Management expects to offset more than half of the $75 million gross tariff impact in 2025 through actions such as shifting sourcing from China, renegotiating with suppliers, and optimizing logistics. If tariffs persist at current levels, full mitigation is targeted for 2026, though the company cautions that the situation remains fluid.
• Consumer demand and regional trends: The company continues to monitor golf participation and purchasing behavior, especially in the U.S. and Asia, where weather, apparel correction, and regional consumer trends could influence sales. Management characterized its core consumer as resilient but is closely tracking macroeconomic and competitive developments.
• FootJoy and apparel normalization: With the footwear market stabilizing after a period of oversupply, FootJoy is positioned for a year of top-line stability and improved profitability, supported by new product launches and ongoing product line optimization. Management plans to maintain a higher mix of premium offerings, which could help margin recovery.

Catalysts in Upcoming Quarters

In the quarters ahead, the StockStory team will be monitoring (1) the pace and effectiveness of tariff mitigation strategies, (2) stabilization and recovery in Asian apparel and footwear markets, and (3) the response to new Titleist and FootJoy product launches across regions. Progress in realigning the supply chain and any notable changes in consumer golf participation trends will also be critical to track.

Acushnet currently trades at a forward P/E ratio of 19.4×. At this valuation, is it a buy or sell post earnings? The answer lies in our full research report (it’s free).

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