Topgolf Callaway Brands Swings to 3Q Loss Amid Company Split

Dow Jones11-13

By Connor Hart

Topgolf Callaway Brands swung to a loss and posted lower revenue in the third quarter, though the results beat analysts' estimates, dragged down by its golf equipment and fitness apparel business.

Driving range Topgolf, which is in the process being split off from the company, posted higher sales despite operating in what Chief Executive Chip Brewer called a challenging macroeconomic backdrop.

"We continue to believe that separating Topgolf from the core business will create shareholder value and we are fully engaged in this work," he said.

The Carlsbad, Calif.-based company on Tuesday posted a net loss of $3.6 million, or 2 cents a share, compared with a profit of $29.7 million, or 16 cents a share, a year earlier.

Adjusted earnings came in at 2 cents a share. Analysts surveyed by FactSet were expecting an adjusted per-share loss of 17 cents.

Revenue fell 2.7% to $1.01 billion, but came in ahead of the $980.8 million that analysts were looking for, according to FactSet.

Topgolf sales rose 1.2% to $453.2, but these gains were offset by sales across the company's active-lifestyle apparel segment, which fell 11% to $266.2 million. Golf equipment sales were flat year-over-year at $293.5 million.

In September, Topgolf Callaway said it would split the company into two businesses, unwinding after less than four years a tie-up between the golf-club maker and driving-range operator. It previously said it expects to complete the separation in the second half of 2025.

The company backed its full-year revenue outlook of about $1.79 billion for Topgolf, though it now expects net revenue on the lower end of its previous outlook for between $4.2 billion and $4.26 billion. It lowered its full-year adjusted per-share earnings outlook to between 8 cents and 13 cents from between 11 cents and 21 cents.

For the year, analysts polled by FactSet are looking for revenue of $4.21 billion and adjusted earnings of 13 cents a share.

Shares rose 4.3% to $9.83 in after-hours trading.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

November 12, 2024 16:55 ET (21:55 GMT)

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Topgolf Callaway Brands Swings to 3Q Loss Amid Company Split

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