Ace,
Who woulda thunk that all we needed was a global pandemic to save golf!
Rico aka Swamp
Rico Cassoni
Taste of Wine and Food
Tech Director/Writer
760-492-8009
www.tasteofwineandfood.com
On Aug 27, 2020, at 8:06 AM, Dwayne Junker <dwayne.junker@xxxxxxx> wrote:
The golf business is booming during the pandemic: Morning Brief
Myles Udland<https://www.yahoo.com/author/myles-udland>
·Markets Reporter
August 27, 2020, 2:56 AM PDT
Thursday, August 27, 2020
Rounds played are surging and the golf business is following suit.
During the COVID-19 pandemic, maintaining social distance from others has
become the most important, and simplest, way to slow the spread of the virus.
And few recreational activities offer a built-in social distancing protocol as
easily as the sport of golf. And as a result, the entire golf industry has been
booming during the summer of 2020.
On Wednesday, Dick’s Sporting Goods (DKS<https://finance.yahoo.com/quote/DKS>)
— which owns Golf Galaxy and also sells golf apparel, equipment, and
accessories at Dick’s locations — reported second quarter
results<https://finance.yahoo.com/news/dicks-sporting-goods-reports-record-113000976.html>
that smashed expectations.
Dick’s reported same-store sales rose 20.7% during the second quarter, even
with 15% of locations closed, on average, during the quarter. Wall Street
analysts were looking for same-store sales to rise by less than half this
amount, according to data from
Bloomberg<https://finance.yahoo.com/news/dicks-sporting-goods-reports-record-113000976.html>.
Revenue at Dick’s in the second quarter totaled $2.71 billion with earnings per
share coming at $3.21 per share. Online sales at Dick’s — which includes
curbside pick-up — rose 194% in the second quarter. Shares of Dick’s rose 15.6%
during Wednesday’s session.
And a standout during the quarter is what the company saw in its golf segment.
An area that Dick’s management expects will continue to be a point of strength
for the company through the rest of the year.
“The golf business has been great both at Dick’s and [Golf] Galaxy,” said
Dick’s CEO Ed Stack on the company’s earnings conference call on Wednesday.
“There’s a number of young people who have come into the game because they’re
not playing football or soccer or some other sport,” Stack added. “So they’re
out playing [golf]. Guys are out playing golf because they’re not at their
kids’ games. Men, women, and kids have really all jumped into this game and we
expect that to continue through the balance of the year, too.”
Stack cited the ongoing PGA TOUR
playoffs<https://www.pgatour.com/fedexcup.html>, the upcoming U.S.
Open<https://www.usopen.com/> (set to be held September 17-20), and The
Masters<https://www.masters.com/index.html> (set for November 12-15) as
positive catalysts for recreational golfers maintaining interest in the sport
after the COVID-related uptick in enthusiasm.
“So we think golf is one of those categories that’s going to be...very good,”
Stack said.
The latest
data<https://www.thengfq.com/2020/07/june-2020-national-rounds-played/> from
the National Golf Foundation showed that in June, national rounds played were
up 13.9%, indicating that up to 8 million more rounds were played in June
compared to last year. This followed a 6.2% increase in rounds played in May,
the first month that many courses were open after mandated shutdowns in the
spring.
Data from the NGF for July rounds played has not yet been released. But
anecdotal reports from this story’s author shows tee time availability at
public courses in the Tristate area remains severely constrained.
Data from the NPD Group published in late
July<https://www.npd.com/wps/portal/npd/us/news/press-releases/2020/golf-equipment-us-sales-jump-51-percent-in-june-the-npd-group-reports/>
also pointed to a strong summer for the golf business, with the firm’s data
showing that golf equipment sales rose 51% in June after a 22% increase in May.
NPD sports industry advisor Matt Powell said, “The golf industry was in a good
place before the COVID-19 crisis, largely due to a surge of retirees entering
the market, and in May we started to see this health returning. Today’s growth
is driven by new players as well as pent-up demand from the closures of
physical golf retail stores and golf courses.”
Earlier this month, results from golf manufacturers Callaway
(ELY<https://finance.yahoo.com/quote/ELY>) and Acushnet Holdings
(GOLF<https://finance.yahoo.com/quote/GOLF>) — which owns Titleist and FootJoy
— also indicated a big turnaround in the sport through the summer months.
Callaway CEO Chip Brewer said that during the second quarter the company’s
business had been “recovering faster than we initially projected.”
Sales at Callaway were still down
34%<https://finance.yahoo.com/news/callaway-golf-company-announces-second-202000750.html>
during the second quarter, but the company noted that equipment sales rose 21%
in June, the quarter’s final month. Brewer added that the company’s sales
recovery in July was better than what had been seen in June, citing both “new
participation and pent-up demand.”
At Acushnet, sales fell
35%<https://s21.q4cdn.com/797008351/files/doc_financials/2020/q2/Acushnet-Holdings-2Q2020-News-Release.pdf>
during the second quarter, but Acushnet CEO David Maher told analysts this
month that “the game and business of golf have been incredibly resilient over
the past [few] months.” The company said in its release that demand for golf
balls had been particularly strong, indicating a pickup in rounds played.
And on the company’s earnings call, Maher added that, “we continue to exercise
caution in our planning, given COVID-related uncertainties, while at the same
time, our teams are preparing to capitalize on the high levels of participation
and consumer demand we have seen over the past two to three months.”
Shares of both Callaway (up 4.1%) and Acushnet (up 0.8%) were higher on
Wednesday following results from Dick’s.
By Myles Udland<https://www.yahoo.com/author/myles-udland>, reporter and
co-anchor of The Final
Round<https://yahoo.cmail20.com/t/j-l-mudikty-yddjjhhjdh-f/>. Follow him at
@MylesUdland<https://twitter.com/MylesUdland>
