GICS Sector : Consumer Cyclical
Topgolf Callaway Brands Corp.designs, manufactures, and sells golf equipment, golf and lifestyle apparel, and other accessories.It operates through three segments: Topgolf; Golf Equipment; and Apparel, Gear and Other.
Topgolf Callaway Brands reported a robust financial performance in Q3 2025, with consolidated revenues reaching $934 million, a 3% increase year-over-year. The revenue growth was driven by both the Topgolf and Golf Equipment segments. The company's adjusted EBITDA also exceeded expectations, contributing to the overall positive performance. Notably, the actual EPS came out at '-0.05', significantly better than the estimated '-0.21'. The Golf Equipment segment saw revenue growth year-over-year, and excluding the impact of tariffs, the segment experienced its third consecutive quarter of underlying gross margin expansion.
Publication Date: Nov -11
The Golf Equipment segment performed strongly, driven by excellent market conditions, with the U.S. market up 2% year-to-date. The Topgolf segment also exceeded expectations, with revenue up 4% year-over-year and a transition to positive same venue sales of 1.2% for the quarter. This was driven by continued positive momentum in traffic and the company's new value initiatives, which included variability on bay timing and new offerings in the food and beverage sector.
The company raised its full-year 2025 revenue guidance to a range of $3.90 billion to $3.94 billion, up $60 million at the midpoint. The full-year adjusted EBITDA guidance range was also raised to $490 million to $510 million, up $40 million at the midpoint. For 2026, analysts estimate revenue growth at 0.8%. The company's available liquidity increased $391 million to $1.25 billion, primarily due to $270 million of cash from operations and the sale of Jack Wolfskin.
To understand what's priced in, we can look at the company's valuation metrics. The current P/S Ratio is 0.48, and the EV/EBITDA is -2.85. The ROE is -61.44%, and the Net Debt / EBITDA is -1.02. These metrics suggest that the market is pricing in a challenging year for the company, but the recent strong performance could be a positive indicator for future growth.
The company mentioned that if existing tariff rates hold, the impact for 2026 would be a little more than double this year's impact, which was around $40 million. To mitigate this, the company is focusing on its value initiatives and introducing new offerings, such as per player pricing, online booking, and mobile ordering. The company is also planning to open 3 new venues next year, which could contribute to future growth.
Topgolf Callaway: Leonard Green's Takeover Signals A New Chapter For The Entertainment Golf Giant
Dec -03
Topgolf Callaway Brands Corp. (MODG) Discusses Sale of Majority Stake in Topgolf and Strategic Refocus on Core Golf Brands Transcript
Dec -01
Geode Capital Management LLC Cuts Stock Holdings in Topgolf Callaway Brands Corp. $MODG
Nov -29
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Nov -28
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Nov -28
Topgolf Callaway (MODG) Upgraded to Strong Buy: Here's What You Should Know
Nov -27
Topgolf Callaway Brands to Participate in Jefferies Virtual Fireside Chat
Nov -24
Topgolf Celebrates Milestone 100th U.S. Venue with Opening in New Braunfels on Dec. 5
Nov -20
Topgolf's 7% growth driven by increasing popularity of entertainment and experiential leisure activities, expansion into new markets, and strategic partnerships. Additionally, investments in technology and digital platforms enhance customer experience, while growing membership programs and corporate events contribute to revenue growth.
Topgolf Callaway Brands Corp.'s golf equipment segment growth is driven by increasing popularity of golf, expansion into new markets, strategic partnerships, and innovative product offerings. Additionally, the company's focus on digital marketing and e-commerce platforms has enhanced customer engagement, contributing to a 5% growth rate.
Topgolf's Active Lifestyle segment growth is driven by increasing demand for experiential entertainment, expansion into new markets, and strategic partnerships. The brand's unique blend of golf, food, and socializing resonates with millennials and Gen Z, fueling growth. Additionally, investments in digital platforms and loyalty programs enhance customer engagement, contributing to the segment's 4% growth.
Topgolf Callaway Brands Corp. offers a wide range of golf clubs, including drivers, fairways, hybrids, irons, wedges, and putters, designed for golfers of all skill levels.
Topgolf Callaway Brands Corp. manufactures high-quality golf balls designed for distance, accuracy, and control, suitable for golfers of all skill levels.
Topgolf Callaway Brands Corp. offers a range of apparel and accessories, including shirts, pants, hats, bags, and gloves, designed for comfort, style, and performance.
Topgolf Callaway Brands Corp. operates entertainment venues that combine golf, food, and fun, offering a unique social experience for players of all skill levels.
Topgolf Callaway Brands Corp. offers Toptracer, a ball-tracking technology that provides real-time data and analytics to help golfers improve their game.
Topgolf Callaway Brands Corp. faces moderate threat from substitutes, as customers have alternative options for entertainment and golfing experiences. However, the company's unique blend of technology, food, and beverage offerings helps to differentiate it from competitors.
Customers have limited bargaining power due to Topgolf Callaway Brands Corp.'s strong brand reputation and unique offerings. The company's focus on customer experience and loyalty programs also helps to reduce customer bargaining power.
Suppliers have limited bargaining power due to Topgolf Callaway Brands Corp.'s large scale of operations and diversified supply chain. The company's ability to negotiate prices and terms with suppliers also reduces supplier bargaining power.
The threat of new entrants is low due to the high barriers to entry in the golf and entertainment industry. Topgolf Callaway Brands Corp.'s established brand and significant investments in technology and infrastructure make it difficult for new entrants to compete.
The intensity of rivalry in the golf and entertainment industry is moderate, with several established players competing for market share. However, Topgolf Callaway Brands Corp.'s unique offerings and strong brand reputation help to differentiate it from competitors and reduce the intensity of rivalry.
| Value | |
|---|---|
| Debt Weight | 29.98% |
| Debt Cost | 3.95% |
| Equity Weight | 70.02% |
| Equity Cost | 13.13% |
| WACC | 10.37% |
| Leverage | 42.82% |
Value: 5.7
Growth: 3.0
Quality: 4.1
Yield: 8.0
Momentum: 6.0
Volatility: 7.0
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Value: 3.3
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Value: 9.1
Growth: 4.1
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Volatility: 2.3
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