For the first full year since 2008, Callaway Golf made money. In a year that had been in many circles troubling for the golf industry, Callaway announced that full-year income for 2014 increased by five percent to $887 million, up from $843 million in 2013. Its gross profit of $358 million was the highest since 2010, and fully diluted earnings per share were $0.20 versus a $0.31 loss in 2013.
"When looking just at the currency neutral basis you can see that we've made nice progress," Brewer told investors on the company's fourth-quarter earnings call Thursday. "What we'll continue to need to do is basically the things that we've been doing in operational improvements and revenue growth. On a currency-neutral basis I believe this was and is trending on a very positive basis."
Among the highlights for 2014 were increased sales in woods (8 percent), irons (12 percent) and golf balls (4 percent). The company saw also sales increases in all regions of the world, including an 11 percent gain in Europe.
Still, the company is cautious about its 2015 forecast, suggesting that operating costs will increase due to spending on tour support and marketing. But the big drag will be weakening foreign currency. Callaway is forecasting a decrease in net sales based solely on unfavorable foreign currency exchange rates. Still, on a constant currency basis, Callaway is forecasting an increase in net sales to a high end of $920 million, or as much as 5 percent, including an estimated growth of 5-6 percent in core channel business.
Brewer also said Callaway increased its investment in the driving range/entertainment franchise TopGolf to $50.4 million. "We continue to be excited about the prospects of that business, and we think that's going to be a positive for the shareholders of Callaway Golf," he said.
Brewer also touted the company's newly launched XR line of clubs and Chrome Soft ball and noted golfers' acceptance of higher-priced products.
"Given the strength of our product line for 2015, and anticipated additional improvements in our operations, we expect for 2015 on a constant currency basis not only sales growth and market share gains, but also further improvements in gross margins and profitability. Golf is a momentum business and fortunately momentum is now on our side."
Callaway's stock price was up 3 percent in trading this morning.
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