Name: Who Makes Money From The U.S. Golf Frenzy
Uploaded: 2021-06-05T16:30:06.000Z
Duration: 11 min 22 s
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With a record number of beginners teeing off in 2020, Callaway, the maker of golf balls,

clubs, bags and apparel, has been thriving.

Callaway had first quarter 2021 net revenue of  $652 million

, a 47 percent increase from the year earlier, and a new record for the company.

On May 24, 2021, the stock closed at $34.86

, more than one hundred and thirty percent higher than the year earlier.

Callaway pre-Covid was already the number one  brand in

sticks, I call it, which is putters, drivers and irons.

And you know, they were outpacing industry growth and then they were also number two in

So with Covid you saw an explosion of, let's say, new participants and those

Callaway has made moves off the fairway as well.

In March 2021, the company completed its merger with golf entertainment business, Top

golf, which blends technology with food and cocktails.

It creates an entity that doesn't really replicate anything that currently exists with

a leader in golf equipment merging with a leader in golf

In 2020, almost 37 million players teed off at a golf course or participated in

an off-course activity like a driving range.

population watched, read about or played golf.

But with movie theaters, travel and concerts expected to rebound, will golf club makers like

Callaway and its rival, Acushnet, be able to maintain their momentum?

Callaway Golf Company got its start in 1982 under the name Hickory Stick

USA. In the Southern California town of Temecula, the tiny three person company

produced a revolutionary line of putters and wedges.

The following year, Ely Callaway, an entrepreneur and businessman with a background

in wine and textiles, bought a stake in the business.

By 1989, the renamed Callaway Golf Company had sales of $10

million and a spot as the number one driver on the senior PGA Tour.

In 1991, Callaway debuted on the New York Stock Exchange and introduced its

oversize metal driver named the Big Bertha Driver.

This product launch helped change the direction of the company and the game of golf for

Big Bertha Driver represented the, you know, the advancement of golf, right?

It was the advancement of the new technology, an oversize head for the

driver, and that created, you know, a distance, further distance and power for the

By 1995, Callaway's Golf drivers were the number one drivers in play on the world's

And thanks to a booming economy, a surplus of new courses and a 21-year-old phenomenon

named Tiger Woods, the game of golf was also seeing a surge of new players.

He brought excitement and added diversity to the sport.

But I think he what he really did was added more youth.

In 1997, Woods claimed his first green jacket at the Masters.

The number of U.S. golfers had grown to 30 million by 2005.

In the two decades leading up to 2006, the number of courses nationwide

But the 2008 financial crisis and an oversupply of courses led to a sudden drop in

Many of those golf courses were built as amenities to sell

real estate, and therefore they weren't thinking about the due

diligence of can this golf course survive and thrive

In this trade area where there are already seven golf courses, they didn't

think about that because it wasn't part of their business plan.

By 2010, the number of golfers in the U.S.

That decline impacted some of the biggest names in golf.

In 2016, Nike exited the golf business and announced it would stop making clubs,

The following year, Adidas sold golf club maker, TaylorMade, to New York based equity firm

Callaway was transitioning its business too, from a golf club manufacturer, to include

lifestyle products complementary to golf.

In 2017, Callaway bought backpack and golf club bag maker, Ogio,

And in 2019 it added outdoor hiking apparel brand, Jack Wolfskin, to its roster.

As of June 3rd, 2021, Callaway had a market cap of $6.8

billion. In 2020, golf clubs made up 49 percent of net sales,

golf balls made up 12 percent, apparel made up 22 percent, and gear and

accessories, like golf bags, made up the remainder.

Callaway sells its products in over 120 countries.

With pro-games, college teams and even kids leagues impacted by the pandemic, many

sports enthusiasts in 2020 turned to golf.

It's wonderful that golf's intrinsic values—people

participating out in nature, people who are starved

for social interaction in a safe environment, that

There was a surge of people who came into the game who frankly

Some of them were former players who hadn't been playing much.

They didn't have a kid's soccer game to go to.

They didn't have, they couldn't go to a concert.

In 2020, golfers played almost 502 million rounds, thirteen percent more

That same year, three million golfers in the U.S.

hit the links for the first time, a record number of beginners, according to the National

Golf Foundation. Those trends impacted some of the biggest golf equipment companies in the

U.S., including privately held companies like Ping and TaylorMade and publicly traded

companies like Acushnet, the maker of Titleist golf balls, and of course, Callaway.

In 2020, Acushnet had net sales of $1.6 billion, a four percent

decrease from the year prior due to the pandemic and government ordered shutdowns.

But with increased demand around golf related products, the company saw first quarter 2021

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Who Makes Money From The U.S. Golf Frenzy

pandemic

opportunity

impact

revenue