Carlsbad, California, United States: Topgolf Callaway Brands has reported better-than-expected financial results for the first quarter and finished the quarter ahead of plan.
Net revenues grew 12.2%, or 15.1% on a constant currency basis, including 11% Topgolf same venue sales growth and a 28.0% increase in Active Lifestyle revenue.
The Company achieved this result despite a US$29.4 million negative impact from changes in foreign currency rates.
The Company’s operating performance was also ahead of plan during the first quarter. Income from operations decreased 14.6%, but non-GAAP income from operations increased 2.2% on a constant currency basis.
Net income decreased US$61.7 million or US$37.7 million on a non-GAAP basis, which exceeded expectations.
This non-GAAP decrease includes an US$18.6 million increase in interest expense related to higher interest rates and increased interest related to new Topgolf venues, US$17.3 million negative foreign currency translation impact on operating income, and a US$7.2 million decrease in other income net hedge gains.
Adjusted EBITDA decreased 7.4%, or increased by 2.8% on a constant currency basis.
Topgolf Callaway Brands Corp is a tech-enabled Modern Golf and Active Fifestyle company delivering golf equipment, apparel, and entertainment, with a portfolio of global brands including Topgolf, Callaway Golf, TravisMathew, Toptracer, Odyssey, OGIO, Jack Wolfskin, and World Golf Tour.
Modern Golf is the dynamic and inclusive eco-system that includes both on-course and off-course golf.
Chip Brewer, President and Chief Executive Officer of Topgolf Callaway Brands, said: “Our first quarter results exceeded expectations, driven primarily by the impressive performance of our new and existing Topgolf venues and Paradym, our latest innovation in golf club design.
“The Modern Golf consumer remains engaged and our brands continue to be well-positioned to benefit from the sustained momentum in off-course and on-course golf.
“Investing in our unique and attractive portfolio of leading brands continues to be our priority, and we have even more conviction in the long-term growth prospects for the business, announcing today increased Topgolf venue profitability and return targets.
“We remain on track to be free cash flow positive for Topgolf and the total Company in 2023, and we are committed to meeting or exceeding our long-term financial targets.”