Topgolf Callaway Brands Corp.

Second-quarter 2026 net sales were $612 million, up 2% year over year. Adjusted EBITDA was $125 million, up 36% year over year, and gross margin expanded 460 basis points to 48.5% (440 basis points excluding tariff benefit). For the first half, revenue increased 6% and adjusted EBITDA increased 33%, with gross margin up 360 basis points. The company raised full-year 2026 net sales guidance to $2.045 billion-$2.070 billion and adjusted EBITDA guidance to $246 million-$260 million. Third-quarter guidance calls for net sales of $415 million-$435 million and adjusted EBITDA of $10 million-$20 million. Capex is expected to be about $40 million. Management said full-year gross tariff expense is expected to be approximately $43 million, and that it still expects to end the year in a net cash leverage position.

Chip Brewer said the quarter reflected a stronger, more focused pure-play golf company with healthy market conditions, strong product acceptance, and disciplined execution. He emphasized that the business is benefiting from portfolio changes, including longer product life cycles, SKU rationalization, and investments in fitting, even though those actions will pressure the back half of the year. His tone was confident and constructive, repeatedly stressing resilience in golf demand and optimism about long-term margin and cash flow improvement.

Brian Lynch focused on the financial progress: Q2 gross margin of 48.5%, adjusted EBITDA of $125 million, and a net cash position with $278 million of cash and cash equivalents against $74 million of outstanding debt at June 30, 2026. He said the company paid off $1.4 billion of debt in the first half, repurchased 5.9 million shares for about $84 million, and still had about $120 million of repurchase authority remaining. He also said full-year tariff expense is now expected to be about $43 million, compared with $34 million in 2025, and that the company expects 2026 capex of about $40 million.

Analysts pressed on the implications of a slower launch cadence, the softer-looking fourth quarter sales pattern, and whether the company was intentionally stretching product cycles to boost profitability. Management said the longer cycles are deliberate and aimed at improving lifetime product profitability, while noting similar moves by competitors could be positive for the market. Questions also focused on gross margin sustainability, tariff and commodity cost pressures, and TravisMathew store closures; management said the margin gains are real but should slow in the second half, that cost pressures are being reflected in guidance, and that the four store closures are part of a disciplined portfolio strategy rather than a major negative. When asked about July trends, management said it saw some temporary softening around World Cup but that it had already been factored into guidance.