Callaway Still in Stock Market Tailspin

Originally posted on Athlon Sports | By Alex Miceli | Last updated Feb 26, 2025 4:08 PM ET

Golf is growing in leaps and bounds, but the Topgolf Callaway Brand is not benefiting from its popularity.

At least not by its stock price, which dropped from a high of $16.29 in July 2024 to a fall from equity grace to under $7.00 to $6.80 at the close on Wednesday.

On Monday, the Carlsbad, California company reported its fourth-quarter earnings. While the earnings beat the Street and internal expectations, the 2025 guide was disappointing and included several headwinds.

“Our Underperform rating on the shares of Topgolf Callaway reflects our view that while the gains in the golf equipment business during COVID are likely to prove sustainable, the recent deterioration in same-venue sales at Topgolf and the company’s levered balance sheet justify

caution at this point,” Raymond James said in its company comment on Topgolf Callaway Brands Corp.

The positive revenue came about from improved Topgolf growth and operational efficiencies, yet the same venue sales (SVS) were flat year over year.

The initial 2025 guidance includes several headwinds that will affect future earnings, including foreign exchange or currency fluctuations, bonus resets, and tariffs.

Topgolf is also a proposed drag on earnings in 2025 with a calendar shift, bonus resets, the sale of the World Golf Tour in December, and costs in anticipation of the potential spinoff or sale of Topgolf.

In September, during its third-quarter earnings call, it was disclosed that Topgolf would be spun off or sold outright in the future.

On the Monday earnings call, management provided no new information about a spinoff and indicated it continues to evaluate all its options, including a spinoff or potential sale.

“We’re not giving specific guidance, but we're very pleased with how we finished Q4 with our strong cash flow,” CFO Brian Lynch said in the earnings call. “We expect to be cash flow positive for the total company and Topgolf in 2025, and you know, in a spin situation, we would use, we, you know, we intend to have a retained state that we would use to help with delivery, so we feel perfect about where we are now and where we're headed.”

This article first appeared on Athlon Sports and was syndicated with permission.

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