Acushnet Holdings Corp. Q1 FY2025 earnings call

• Acushnet delivered worldwide net sales of $703 million, a 1% increase over last year. Adjusted EBITDA was $139 million, down $15 million due to increased investment in equipment segment. - Golf equipment net sales up almost 4% with gains in every region, led by new Pro V1 and Pro V1X ball launches and GT Metals franchise growth. - Golf Gear sales up almost 4% with growth in all major markets. - FootJoy sales down 5% due to lower closeout footwear and product line rationalization. - Geographically, US up 1%, EMEA up 4%, Japan and Korea down. - Mitigating tariff impact through durable and regionally diverse supply chain. - R&D expense up to support next generation product introductions. - Non-cash pre-tax gain of $20.9 million from footwear manufacturing transition deconsolidation.

Golf Equipment: Net sales increased almost 4% in the quarter. Golf ball business grew 4%, with EMEA region up double digits due to favorable weather. Golf Club business grew 4% vs last year. Golf Gear: Sales up almost 4% in the quarter, with growth in all major markets led by EMEA and Japan. Titleist Gear posted steady gains, while Club Glove and Links & Kings business was up double digits. FootJoy: Sales down 5% in the quarter due to lower closeout footwear sales and product line rationalization. Other Products: Net sales of products not allocated to a reportable segment were down slightly, with shoes up but Titleist apparel down in Korea's super premium apparel segment.

• Macro environment uncertainty leads to pausing full-year guidance until tariff clarity. - First half sales expected up low single digits vs first half of 2024. - Tariff impact estimated at ~$75 million in 2025, expect to offset >50% by year-end. - Q2 expected ~$4 million tariff impact, first half adjusted EBITDA down low single digits.

• Tariff uncertainty impacting manufacturing costs. - Weather in Asia causing slow start to season. - Footwear space oversupply correction affecting FootJoy's top line.

Q: Megan Platt asked about guidance pause and consumer demand.

A: David Maher said Q1 is about pipeline, Q2 provides more consumer behavior insight, rounds play resilient, and first-half guide based on seen trends.

Q: Megan Platt asked about tariff mitigating actions and pricing.

A: Sean Sullivan said price is last lever, focusing on supply chain redirection, supplier conversations, and moving sourcing to lower tariff areas.

Q: Joe Altobello asked about tariff impact if China rate was lower.

A: Sean Sullivan said ~70% of $75M tariff impact is China-related, so lower China rate would significantly reduce impact.

Q: Julian asked about exchange rate impact on outlook.

A: Sean Sullivan said $12M headwind in Q1, $20M tailwind expected if current rates persist through year-end.

Q: Noah Zatzkin asked about mitigation beyond 2025 and China sourcing.

A: David Maher said moving sourcing to US, Vietnam, Taiwan, with some raw materials still sourced from China but plans to minimize US imports from China, expecting full mitigation by 2026.

Q: Carlos Gallagher asked about quarter-to-date demand trends and footwear dynamics.

A: David Maher said no meaningful demand swings seen, footwear business has new launches well received, inventory normalized, and 2025 expected to be more normalized than recent years.