Callaway Golf CEO Chip Brewer Praises Topgolf’s Strong Financial Numbers


Calling Topgolf a “keystone for our modern golf thesis,’’ Callaway Golf President/CEO Chip Brewer, on Aug. 4 lobbied Wall Street analysts on what he termed the ability of the golf entertainment division to continue to put up quarter-after-quarter of strong results.

“If some investors initially look at the Topgolf business as either risky or unproven, I believe the string of consistent results since our merger should soon begin to change perspectives and valuations,’’ Brewer said. 

Callaway Golf on Aug. 4 reported an impressive second quarter of 2022 for Topgolf, with sales of $404 million and earnings of $44.2 million. For the six months, Topgolf’s posted $726 million in sales and earnings of $50.7 million.

Brewer’s message was similar to one Callaway Golf delivered in a recent Investors Day event.  Despite strong sales and earnings numbers since it was acquired by Callaway in March 2021, Topgolf has been a mystery of sorts to Wall Street and seen in some circles as a drag on the company’s stock because of its heavy debt-load.   Callaway stock, for example, closed at $29.52 per share on March 8, 2021 – the date it closed on the approximately $2 billion Topgolf deal. The stock price currently has a 52-week high or $34.24 (Aug. 9, 2021) and hit 52-week low of $17.78 this past May 8.

Market conditions and other issues, no doubt, played roles in the roller coaster stock price, but Topgolf seems to have received most of the blame, which has frustrated Callaway executives for at least the past few months.

During this past second quarter, Callaway opened two new Topgolf venues – in  Philadelphia and El Segundo, Calif.  The company this past July opened its newest venue format in the Seattle Metropolitan area. This new venue format, Brewer said, benefits from a larger, more open lobby area that includes golf simulators.

“This venue format, which we’ll use in select markets going forward, will add to our cross-brand synergy strategy by including a Callaway branded fitting studio in the lobby,’’ Brewer said. “We plan to open one additional venue in Q3 for a total of two in the quarter. The fourth quarter will then be our largest quarter for openings, with six now planned for that quarter.’’

In 2022, Brewer said, Topgolf is forecast to be Callaway’s largest segment by revenue. Callaway’s  guidance for all of 2022 assumes approximately $1.56 billion in revenue.

By 2025, Brewer said, Topgolf is expected to account for more than half of Callaway’s total adjusted EBITDA.

“As we look out over the next few years,,’’ Brewer said, “we are confident Topgolf will be a significant source of long-term value creation.’’


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