TopGolf Callaway Brands is undertaking a strategic review and could potentially spin off TopGolf, its entertainment brand, while golf apparel brand TravisMathew grew market share and performed as expected in the second quarter ending June 30.

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

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 for a total of 57.

TravisMathew’s womenswear, which it introduced in 2022, is approaching 10% of revenue, Brewer said, and is on its way to being a “significant portion” of the business.

“In addition, the TravisMathew team has done a great job growing their outerwear business, which, in turn, is helping them be a less seasonally focused 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 Outlook

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

“We remain convinced that TopGolf is a high-quality business with significant future opportunity,” Brewer said. “It’s transforming the game of golf, and we believe it will deliver substantial growth and financial returns over time. At the same time, we have been disappointed in our stock performance for some time, as well as the more recent same-venue sales performance.”

TopGolf Callaway’s golf equipment and the active lifestyle segments performed roughly consistent with expectations, including strong market share performance at both TravisMathew and Callaway golf equipment.

Revenue in TopGolf Callaway’s active lifestyle category declined by 3.2% to $249.6 million in the quarter because of lower wholesale revenue at Jack Wolfskin, which announced in May 2024 that it was exiting the U.S. market.

Quarterly revenue in TopGolf Callaway’s golf equipment category, which includes TravisMathew, declined by 8.2% year-over-year to $413.8 million because of a change in equipment launch timing, Brewer said.

Brian Lynch, TopGolf Callaway’s executive vice president and CFO, said on the call that despite market share gains and successful expansion initiatives in golf equipment at Callaway and TravisMathew, macroeconomic conditions will continue to impact revenue.

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

Kate Robertson can be reached at [email protected].

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