TravisMathew continues to expand; parent company considers spin-off of TopGolf

TopGolf Callaway Brands is currently conducting a strategic review and may potentially spin off its TopGolf entertainment brand, while golf apparel brand TravisMathew grew market share and delivered as expected performance in the second quarter ended June 30.

President and CEO Chip Brewer said earlier this month during the company’s second-quarter earnings call that disappointing sales at TopGolf were the reason for lower-than-expected quarterly revenue of $1.15 billion, a 1.9 percent decline from the year-ago quarter. Quarterly net income was $62.1 million, a 47.1 percent decline from the year-ago quarter.

TravisMathew expansion on track

Brewer said TravisMathew’s expansion strategy, which Shop Eat Surf detailed last year, is going well. The brand has opened five new stores so far this year and will open five more by the end of 2024, bringing the total store count to 57.

TravisMathew’s women’s fashion, which launched in 2022, accounts for nearly 10% of sales, Brewer said, and is on track to be a “significant part” of the business.

“Additionally, the TravisMathew team has done a great job of growing the outerwear business, which in turn helps the company be a less seasonal brand,” Brewer said.

Callaway acquired TravisMathew in 2017 for $125.5 million and subsequently acquired TopGolf to become TopGolf Callaway in 2020.

TopGolf Callaway lowers forecast

The company lowered its full-year revenue forecast by about $225 million to a range of $4.2 billion to $4.6 billion.

“We continue to believe that TopGolf is a high-quality company with great future potential,” Brewer said. “It is a game-changer for golf and we believe it will deliver significant growth and financial returns over time. At the same time, we have been disappointed for some time with our stock performance as well as recent same-store sales performance.”

TopGolf Callaway’s Golf Equipment and Active Lifestyle segments performed broadly in line with expectations, including strong market share growth in both TravisMathew and Callaway Golf Equipment.

TopGolf Callaway’s Active Lifestyle category revenue decreased 3.2% to $249.6 million in the quarter, reflecting lower wholesale sales at Jack Wolfskin, which announced its exit from the U.S. market in May 2024.

Quarterly sales in TopGolf Callaway’s golf equipment category, which includes TravisMathew, fell 8.2% year over year to $413.8 million due to changes in the timing of equipment launches, Brewer said.

Brian Lynch, executive vice president and CFO of TopGolf Callaway, said on the conference call that despite market share gains and successful expansion initiatives in the golf equipment segment at Callaway and TravisMathew, macroeconomic conditions would continue to impact sales.

“This is the less pleasant part of the economic cycle that we all expected at some point,” Lynch said. “While it has some impact on revenue, we have been able to offset much of the impact on the bottom line through operational efficiencies and cost management.”

You can reach Kate Robertson at [email protected].

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