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Here's Why Investors Should Retain Acushnet Holdings Stock Now
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Acushnet Holdings Corp. (GOLF - Free Report) is likely to benefit from strong demand, new product launches and operational improvements. However, elevated expenses are a concern.
Factors Driving GOLF Stock
Acushnet continues to benefit from the overall strength of the golf industry. The resurgence in golf participation post-pandemic has created a solid foundation for sustained growth. In the United States, rounds of golf were up 2% in the first half of the year, contributing to the company’s 7% growth in the region. Healthy participation rates are a positive signal for Acushnet, as more rounds of golf generally lead to increased sales of golf balls, clubs and apparel.
The company's performance has been bolstered by its flagship product lines, particularly Titleist Golf Balls and Golf Clubs. In the first half of 2024, Titleist Golf Balls witnessed 7% sales increase, with double-digit gains in the U.S. market. This growth is impressive given the highly competitive landscape. The company’s strategy of keeping its three golf ball production facilities running at full capacity has paid off, ensuring that it meets the rising demand across all regions.
Acushnet’s pipeline of upcoming product launches adds another layer of confidence for investors. In addition to the Titleist GT Metals, the company is preparing to launch new seasonal collections for FootJoy, KJUS and Titleist Apparel in key markets like Korea, Japan and China. The highly anticipated release of the FootJoy Quantum, an athletic-inspired golf shoe for men and women, is expected to further strengthen FootJoy’s position in the golf footwear market.
One of the standout achievements of the first half was Acushnet’s operational improvements. The company has successfully expanded its urethane capacity, improving throughput efficiency at its ball plants. This not only helps meet current demand but also positions Acushnet well for future growth. Additionally, the company has made strides in inventory management, reducing inventories by 22% from the fourth quarter of 2023 and by 14% compared to the second quarter of 2023. This positions the company to capitalize on new product launches in the second half of the year, including the 2025 Pro V1.
Concerns for GOLF Stock
Image Source: Zacks Investment Research
Shares of Acushnet Holdings have declined 2.3% in the past three months against the industry’s growth of 14.5%. Soft performance in international markets and elevated expenses added to the negatives.
In Europe, poor weather conditions have led to a high single-digit decline in rounds of golf, which negatively impacted sales of FootJoy footwear and apparel. This regional slowdown has forced Acushnet to carefully manage inventory and promotional activities to mitigate the effects of lower demand. Asia has also been a mixed bag for the company. While golf ball and club sales have been strong, the region continues to face excess inventory in the apparel and footwear segments, particularly in Korea’s premium apparel market, which is still recovering from a period of rapid growth and increased competition.
Additionally, Acushnet is grappling with rising costs across various parts of its business. In the second quarter, selling, general and administrative expenses increased 2% year over year, owing to higher IT and distribution costs in the United States. Furthermore, interest expenses jumped by $3 million as a result of increased borrowings. These rising costs, combined with currency headwinds, are eroding profitability and may limit the company’s ability to generate shareholder value in the near term.
Conclusion
Despite some near-term headwinds, Acushnet Holdings continues to show resilience and long-term growth potential. The company's leadership in golf balls and clubs, strong participation trends and a pipeline of exciting product launches make it a compelling choice for long-term investors. With operational improvements and effective inventory management, Acushnet is well-positioned to navigate current challenges and capitalize on future growth opportunities. For investors looking to benefit from the ongoing strength of the golf industry and Acushnet’s strategic initiatives, retaining GOLF stock may prove to be a wise move.
GOLF’s Zacks Rank and Stocks to Consider
Acushnet Holdings currently carries a Zacks Rank #3 (Hold).
Norwegian Cruise Line has a trailing four-quarter earnings surprise of 5.7%, on average. The stock has rallied 36.3% in the past year. The Zacks Consensus Estimate for NCLH’s 2024 sales and earnings per share (EPS) calls for growth of 9.8% and 125.7%, respectively, from the year-ago levels.
DoubleDown Interactive has a trailing four-quarter earnings surprise of 26%, on average. The stock has surged 59% in the past year. The Zacks Consensus Estimate for DDI’s 2024 sales and EPS indicates an increase of 12.6% and 15.8%, respectively, from the year-ago levels.
Carnival has a trailing four-quarter earnings surprise of 320.4%, on average. The stock has increased 35.9% in the past year. The Zacks Consensus Estimate for CCL’s 2025 sales and EPS indicates an increase of 4.6% and 28.8%, respectively, from the year-ago levels.
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Here's Why Investors Should Retain Acushnet Holdings Stock Now
Acushnet Holdings Corp. (GOLF - Free Report) is likely to benefit from strong demand, new product launches and operational improvements. However, elevated expenses are a concern.
Factors Driving GOLF Stock
Acushnet continues to benefit from the overall strength of the golf industry. The resurgence in golf participation post-pandemic has created a solid foundation for sustained growth. In the United States, rounds of golf were up 2% in the first half of the year, contributing to the company’s 7% growth in the region. Healthy participation rates are a positive signal for Acushnet, as more rounds of golf generally lead to increased sales of golf balls, clubs and apparel.
The company's performance has been bolstered by its flagship product lines, particularly Titleist Golf Balls and Golf Clubs. In the first half of 2024, Titleist Golf Balls witnessed 7% sales increase, with double-digit gains in the U.S. market. This growth is impressive given the highly competitive landscape. The company’s strategy of keeping its three golf ball production facilities running at full capacity has paid off, ensuring that it meets the rising demand across all regions.
Acushnet’s pipeline of upcoming product launches adds another layer of confidence for investors. In addition to the Titleist GT Metals, the company is preparing to launch new seasonal collections for FootJoy, KJUS and Titleist Apparel in key markets like Korea, Japan and China. The highly anticipated release of the FootJoy Quantum, an athletic-inspired golf shoe for men and women, is expected to further strengthen FootJoy’s position in the golf footwear market.
One of the standout achievements of the first half was Acushnet’s operational improvements. The company has successfully expanded its urethane capacity, improving throughput efficiency at its ball plants. This not only helps meet current demand but also positions Acushnet well for future growth. Additionally, the company has made strides in inventory management, reducing inventories by 22% from the fourth quarter of 2023 and by 14% compared to the second quarter of 2023. This positions the company to capitalize on new product launches in the second half of the year, including the 2025 Pro V1.
Concerns for GOLF Stock
Image Source: Zacks Investment Research
Shares of Acushnet Holdings have declined 2.3% in the past three months against the industry’s growth of 14.5%. Soft performance in international markets and elevated expenses added to the negatives.
In Europe, poor weather conditions have led to a high single-digit decline in rounds of golf, which negatively impacted sales of FootJoy footwear and apparel. This regional slowdown has forced Acushnet to carefully manage inventory and promotional activities to mitigate the effects of lower demand. Asia has also been a mixed bag for the company. While golf ball and club sales have been strong, the region continues to face excess inventory in the apparel and footwear segments, particularly in Korea’s premium apparel market, which is still recovering from a period of rapid growth and increased competition.
Additionally, Acushnet is grappling with rising costs across various parts of its business. In the second quarter, selling, general and administrative expenses increased 2% year over year, owing to higher IT and distribution costs in the United States. Furthermore, interest expenses jumped by $3 million as a result of increased borrowings. These rising costs, combined with currency headwinds, are eroding profitability and may limit the company’s ability to generate shareholder value in the near term.
Conclusion
Despite some near-term headwinds, Acushnet Holdings continues to show resilience and long-term growth potential. The company's leadership in golf balls and clubs, strong participation trends and a pipeline of exciting product launches make it a compelling choice for long-term investors. With operational improvements and effective inventory management, Acushnet is well-positioned to navigate current challenges and capitalize on future growth opportunities. For investors looking to benefit from the ongoing strength of the golf industry and Acushnet’s strategic initiatives, retaining GOLF stock may prove to be a wise move.
GOLF’s Zacks Rank and Stocks to Consider
Acushnet Holdings currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) , DoubleDown Interactive Co., Ltd. (DDI - Free Report) and Carnival Corporation & plc (CCL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Norwegian Cruise Line has a trailing four-quarter earnings surprise of 5.7%, on average. The stock has rallied 36.3% in the past year. The Zacks Consensus Estimate for NCLH’s 2024 sales and earnings per share (EPS) calls for growth of 9.8% and 125.7%, respectively, from the year-ago levels.
DoubleDown Interactive has a trailing four-quarter earnings surprise of 26%, on average. The stock has surged 59% in the past year. The Zacks Consensus Estimate for DDI’s 2024 sales and EPS indicates an increase of 12.6% and 15.8%, respectively, from the year-ago levels.
Carnival has a trailing four-quarter earnings surprise of 320.4%, on average. The stock has increased 35.9% in the past year. The Zacks Consensus Estimate for CCL’s 2025 sales and EPS indicates an increase of 4.6% and 28.8%, respectively, from the year-ago levels.