Callaway Golf Company

Q2 consolidated net sales were $612 million, up 2% year over year. Adjusted EBITDA was $125 million, up 36% year over year. Gross margin was 48.5%, up 460 basis points year over year; excluding tariff benefit, gross margin still improved 440 basis points. For the first half, revenue increased 6% and adjusted EBITDA increased 33%. For full-year 2026, management raised net sales guidance to $2.045 billion-$2.070 billion and adjusted EBITDA guidance to $246 million-$260 million; the revenue midpoint was raised by about $15 million and EBITDA midpoint by $31 million. For Q3, the company guided to net sales of $415 million-$435 million and adjusted EBITDA of $10 million-$20 million. Management also said 2026 capital expenditures should be about $40 million. It expects gross tariff expense in 2026 to be about $43 million, about $7 million better than prior guidance. As of June 30, 2026, the company had $278 million of cash and cash equivalents, $74 million of outstanding debt, and $775 million of total available liquidity.

Chip Brewer said the quarter showed strong momentum in the company’s shift back to a focused pure-play golf business. He emphasized healthy golf market conditions, strong product acceptance, and disciplined execution, while noting that the company has been actively simplifying the portfolio, lengthening some product life cycles, and making margin-improving decisions. His tone was upbeat but disciplined: he framed the second-half product cadence changes and lower-margin rationalization as deliberate choices to improve long-term profitability, free cash flow, and shareholder value.

Brian Lynch said the quarter benefited from higher net sales, gross margin expansion, and corporate cost savings, with tariffs providing only a slight incremental benefit. He highlighted that Q2 operating expenses rose only about $1 million, as a $4 million decline in corporate overhead largely offset inflation and living-cost pressures in the businesses. On liquidity, he said the company ended Q2 in a net cash position with $278 million of cash and equivalents, only $74 million of outstanding debt, and $775 million of available liquidity after paying off $1.4 billion of debt in the first half. He also said the company repurchased 5.9 million shares for about $84 million through June, with about $120 million of authorization remaining, and reiterated that repurchases are intended to meaningfully reduce share count over time.

Analysts focused on the launch calendar, second-half revenue phasing, gross margin sustainability, golf ball momentum, TravisMathew store closures, and commodity/tariff pressure. Management said the launch cadence changes are intentional and designed to extend product life cycles and improve profitability, not a sign of demand weakness, and they noted that competitors are making similar decisions. They also said the Q3/Q4 phasing primarily reflects launch timing, that golf ball growth was driven by fundamental improvement rather than one-time items, and that the TravisMathew store closures were a disciplined move to improve the store fleet. On cost pressure, management said the guidance already incorporates current commodity and oil-related pressure, but they declined to quantify the exact impact further.