Topgolf Callaway Brands Corp. (MODG)

In Q1 2025, Topgolf Callaway reported revenue of $1.09 billion, a 4.5% year-on-year decrease, but exceeded market expectations, with non-GAAP profit of $0.11 per share surpassing analyst estimates, though revenue and EBITDA guidance were less impressive. In Q2 2025, the company met or beat expectations across all segments, with consolidated revenue and Adjusted EBITDA surpassing expectations. The company announced its intent to pursue the separation of its business into two independent companies, Callaway and Topgolf, initially expected in the second half of 2025 but delayed due to the departure of Topgolf CEO Artie Starrs. Topgolf Callaway Brands was reported to be considering a sale of its Callaway business. CEO Artie Starrs sold 106,734 shares, and Director Erik J. Anderson sold 25,704 shares in August 2025. Analyst ratings varied, with a consensus "Hold" rating and price targets ranging from $9.50 to $10.00. Topgolf broke ground on its first Wisconsin location in October 2025 and opened new venues in Woodbury, MN, and Avon, Ohio. Topgolf Callaway Brands presented at the Goldman Sachs conference, outlining a strategic recalibration due to challenges in Topgolf's same-venue sales, prioritizing same-venue sales and cash flow.

Demand for Topgolf Callaway Brands' products and services exhibits seasonality, influenced by weather and major golf events. Golf equipment sales typically increase in the second quarter, with the Masters tournament marking the start of the golf season, and retailers offer closeout deals in the late fall or early winter. While Topgolf venues offer climate-controlled bays, their attendance can still be influenced by seasonal factors, and the company implements strategies to drive traffic during specific periods, such as leveraging the fall football season with themed events and packages. Topgolf has experienced declines in same-venue sales in Q1 and Q2 2025, indicating a need for ongoing initiatives to boost visitation.

Topgolf Callaway Brands Corp. is a global leisure company specializing in golf entertainment and active lifestyle products. Headquartered in Carlsbad, California, it operates through Topgolf, Golf Equipment, and Active Lifestyle segments, designing, manufacturing, and selling golf equipment, apparel, and accessories within the Consumer Cyclical sector and Leisure Products industry. The Topgolf segment includes venues with technology-enabled hitting bays, bars, dining, and event spaces, along with Toptracer ball-flight tracking and the World Golf Tour (WGT) digital game. The Golf Equipment segment focuses on golf clubs and balls under brands like Callaway Golf and Odyssey. The Active Lifestyle segment includes soft goods marketed under brands like Callaway Golf, TravisMathew, OGIO, and Jack Wolfskin.

Topgolf Callaway Brands Corp. has a significant global presence, designing, manufacturing, and selling its products in the United States, Europe, Asia, and internationally. Its products and services are available to consumers across multiple channels in over 120 countries, with the majority of revenue derived from the United States.

Topgolf Callaway Brands maintains a strong reputation in the golf equipment sector, with its Callaway Golf brand consistently recognized for innovation and technology. The "Paradym" and "AI Smoke" clubs have achieved #1 market share, and the new Chrome Tour golf balls have driven record market share. Topgolf venues are seen as a unique blend of sports, technology, and casual dining. However, the company has faced challenges due to disappointing same-venue sales performance of Topgolf, concerns about product offering resonance and declining earnings per share, and significant stock sales by the CEO and a director. Topgolf has actively worked to enhance its brand appeal by introducing initiatives like the "Topgolf Field Goal Challenge" and various game day packages, as well as value-driven programs like "Sunday Funday" and half-price golf on weekdays.

Institutional investors and hedge funds hold 84.69% of Topgolf Callaway Brands Corp. stock, while company insiders own 2.49%. Major institutional owners who have recently adjusted their positions include AlphaQuest LLC, Signaturefd LLC, GAMMA Investing LLC, CWM LLC, Public Employees Retirement System of Ohio, FNY Investment Advisers LLC, Novem Group, Teacher Retirement System of Texas, Principal Financial Group Inc., Cerity Partners LLC, Schwarz Dygos Wheeler Investment Advisors LLC, Jump Financial LLC, and Commonwealth of Pennsylvania Public School Empls Retrmt SYS.