Earnings

Callaway Golf Returns To $22.9 Million Adjusted Profit And Lifts Its Annual Forecast

Price increases and cost cuts improved margins, but the company still expects lower sales and a wider adjusted loss in the fourth quarter.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

— 3 min read
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Callaway Golf Returns To $22.9 Million Adjusted Profit And Lifts Its Annual Forecast

Callaway Golf, which makes golf equipment, apparel and accessories, raised its annual forecasts Thursday as third-quarter adjusted profit from continuing operations reached $22.9 million, reversing an $11.1 million loss a year earlier. Its earnings release, furnished with an SEC filing, credited price increases, cost cuts and better-than-expected product launches despite a decline in quarterly sales.

More Profit From Fewer Sales

Callaway now expects annual sales of $2.065 billion–$2.078 billion, compared with its previous $2.045 billion–$2.070 billion range. The forecast for adjusted earnings before interest, taxes, depreciation and amortization rose to $272 million–$280 million from $246 million–$260 million; the company reported $222 million for 2025.

Third-quarter revenue was $436.9 million, against $462.6 million a year earlier—a 5.6% decline as reported, or 4.7% excluding currency movements. Adjusted earnings per share from continuing operations turned positive at $0.12, compared with a $0.06 loss.

The improvement came from keeping more of each sales dollar after product costs. Adjusted gross margin reached 45.0%, up from 39.8%, as selective price increases, cost reductions and the removal of less-profitable business took effect. Quarterly adjusted earnings before interest, taxes, depreciation and amortization increased 17.3% to $35.9 million from $30.6 million.

Tariff refunds also helped the standard-accounting results. Profit from continuing operations was $48.1 million, compared with a $4.1 million loss, and included $33.5 million of refunds and related interest. Reported gross margin reached 51.9%, with approximately $31.8 million of tariff refunds contributing to that measure; those benefits were excluded from adjusted results.

CALY shares rose about 3% to $16.41 in Friday trading, putting the company's market value at about $2.8 billion.

Launch Changes Reshape Equipment Sales

Callaway had already moved its iron launches and dropped some lower-margin products, deliberately reducing expected second-half sales compared with 2025. Currency movements in Asia also hurt quarterly revenue, while Mini Spinner fairway woods and TRTL putters in Asia sold better than management expected. TravisMathew sales increased.

The equipment business generated $281.5 million of quarterly sales, versus $305.5 million a year earlier, while its operating income increased to $27.2 million from $23.3 million. Apparel, Gear and Other revenue slipped to $155.4 million from $157.1 million, but operating income rose to $19.5 million from $13.7 million.

The company's portfolio includes Callaway Golf, Odyssey, TravisMathew and OGIO. It sells clubs, balls, clothing, bags and accessories through retailers, golf course shops, distributors, its websites and company stores; its apparel and gear also reach customers beyond golf.

Chip Brewer, Callaway Golf's president and chief executive officer, said investment continues alongside shareholder payouts, including “our new 3D printing capabilities.”

Cash Recovery, A Weaker Fourth Quarter

Through September, operating cash from continuing operations totaled $228 million excluding $44 million associated with tariff refunds, a 45% increase from a year earlier. Callaway spent $135 million repurchasing approximately 9 million shares and had $70 million of repurchase authorization left.

The balance-sheet reset included paying off more than $1.4 billion of debt in the first half of 2026. At September 30, unrestricted cash was $434 million and outstanding debt was $76 million, including $26 million of financing leases.

That debt repayment left less cash earning dividend income. Management expects the lower income, launch changes, removal of lower-margin business and spending on fitting to weigh on fourth-quarter results.

Fourth-quarter sales are forecast at $328 million–$341 million, compared with $368 million a year earlier. On its adjusted earnings-before-interest, taxes, depreciation and amortization measure, Callaway expects a loss of $45 million–$53 million, versus a $25 million loss.

The higher annual forecast therefore still includes a weaker final quarter: Callaway expects full-year sales growth, but another year-over-year decline in fourth-quarter revenue.

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