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Wednesday, August 11, 2021
The COVID golf boom continues in 2021
In August 2020, we wrote in The Morning Brief that the golf business was booming during the pandemic.
In August 2021, the industry only looks stronger.
Within the last week, we’ve seen golf’s two biggest publicly-traded companies — Titleist parent company Acushnet (GOLF) and Callaway Golf (ELY) — report quarterly results. And these reports indicated that just about every benefit that accrued to the industry during the pandemic has only improved this year.
Golf requires two things that some consumers found abundant during the pandemic — disposable income and idle time. The sport’s earned reputation is shaped by there being only a select group of people with ample access to both. But during the pandemic, millions of consumers suddenly found themselves thrown into both categories.
The latest data from the National Golf Foundation shows that rounds played through June are up 23% year-to-date, and running 19% above the 2017-2019 average.
Rounds at public courses are also outpacing growth in rounds at private clubs, with public rounds played up 26% this year against a 13% increase in private loops. Data that confirms what your humble public-playing author finds out each weekend: you can’t get a tee time anywhere these days.
“According to Golf Datatech, rounds played in June remained at an all-time high, and retail demand remains elevated,” Callaway Golf CEO Chip Brewer said on the company’s earnings conference call.
“More anecdotally,” Brewer added, “private club memberships are also experiencing exceptional demand, with [waitlists] developing at many clubs across the U.S. and the U.K. With more options for activities opened this spring and summer compared to last year, we were cautious that there could have been a potential slowdown in golf participation and/or demand. However, thus far, we’re pleased to report that we’re not seeing this from our seat in the market.” (Emphasis ours.)
Ahead of second quarter earnings season, we argued in The Morning Brief that comparisons to 2019 would be key for businesses across the economy, with investors trying to make sense of which trends that took off during the pandemic would stick — and which would fade away.
And Brewer’s framing also shows how even those in the golf business were skeptical that 2020’s rush into the sport would be sustained.
“So what we saw in the second half of 2020, rounds were up 25% versus the prior year,” Acushnet CEO David Maher said on the company’s earnings call.
“I think  is a good baseline, right? We made the comment that rounds in the first half were up 20% over 2019. And just looking forward, I would think we’d see rounds of play up in the second half of this year in the 15% to 20% range versus 2019,” he added.
As for how this boom has translated to the income statement for both companies, Callaway reported golf equipment revenues that rose 91% in the second quarter, while Acushnet said golf club sales rose 111% and golf ball revenues were up 98.1%. Adjusted EBITDA also rose sharply for both — rising $94.7 million at Acushnet in the second quarter and by $135 million at Callaway.
Another development in the golf industry to watch will be Taylormade’s potential move to public markets, following the company’s recent sale to South Korea-based Centroid Investment Partners for just under $1.9 billion.
And as the world reopens and a new generation of golfers acquaints themselves with the sport’s challenges and frustrations, the future for the game still looks bright.
And one key theme to watch is that “new participants are increasingly younger,” Maher noted. “They’re hooked on the game. They want to get better. We’ve talked about increased lessons throughout the industry in all markets, and that continues. And as a result, the game has become less intimidating and more welcoming.”
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