Callaway Golf Company

Callaway Golf Company has issued full-year 2026 guidance for net sales of $2.045 billion to $2.070 billion and adjusted EBITDA of $246 million to $260 million, reflecting updated tariff assumptions. The company now incorporates only the Section 301 forced labor tariffs that began on July 25, resulting in an expected full-year gross tariff expense of approximately $43 million, a $7 million improvement from prior guidance. Second-quarter consolidated net sales reached $612 million with adjusted EBITDA of $125 million, both exceeding the midpoint of guidance by $15 million and $22 million respectively, while gross margin rose 460 basis points to 48.5%. Management highlighted a $200 million share repurchase program, with $84 million in buybacks completed through June and $120 million in remaining authorization, alongside the full repayment of $1.2 billion in term loan debt and $258 million in convertible notes. The company also noted strategic initiatives to extend product life cycles and rationalize lower-margin portions of the business, which are expected to pressure second-half results but enhance long-term profitability.

Callaway Golf reported a rise in second-quarter profit, with net income climbing to $75.2 million, or $0.40 per share, from $20.3 million, or $0.11 per share, a year ago. Quarterly net sales increased 2.0 percent to $612.2 million from $600.4 million, driven by a 4.5 percent increase in the Golf Equipment segment, partially offset by a 3.6 percent decline in the Apparel, Gear and Other segment. Adjusted earnings from continuing operations rose to $0.39 per share from $0.20 per share. The company now expects full-year net sales of $2.045 billion to $2.070 billion, compared with its previous outlook of $2.015 billion to $2.070 billion.

O'Keeffe Stevens Advisory believes Callaway Golf Company still has room to run after the sale of its TopGolf business. In its second-quarter 2026 investor letter, the firm highlighted that first-quarter net sales rose 9.2% to $687.5 million, adjusted EBITDA climbed 31.1% to $163.7 million, and non-GAAP net income from continuing operations increased 96%, with gross margin up roughly 260 basis points despite absorbing about $18 million of incremental tariff expense. Management raised its full-year outlook, and the firm noted that through April 30, Callaway repurchased 5.6 million shares at an average cost of $14.08, using $79 million of a $200 million authorization, and on May 1 settled $258 million of convertible notes in cash, remaining in a net cash position. O'Keeffe Stevens said the thesis continues to play out and that while the stock has materially appreciated, it still sees upside to numbers as management reduces debt and returns capital.

A bullish thesis on Callaway Golf Company was published on TradersPro's Substack, highlighting the company's strategic transformation into a pure-play golf business. The thesis notes that Callaway has divested its Topgolf entertainment stake and the Jack Wolfskin apparel brand, sharpening its focus on core golf equipment innovation. The company's latest Quantum driver line features AI-driven design, and management raised full-year guidance after a strong first quarter. Structural tailwinds include elevated post-pandemic participation and resilient premium consumer spending, supporting pricing power and margin stability. Callaway's stock was trading at $17.08 as of June 15th, with trailing and forward P/E ratios of 65.69 and 37.59 respectively.