Following my coverage on Topgolf Callaway Brands (NYSE: MODG ) in Aug'24, for which I recommended a sell rating due to my expectation that SVS (same venue sales) will not recover anytime in the near future, givenI take a fundamentals-based approach to value investing.I disagree with the common misconception held by many investors that low multiple stocks must be cheap. I look for companies that offer the best long-term durability at the most affordable prices. Consequently, I have a propensity to be drawn t ...

The venue will be located at 560 Bielenberg Drive in Woodbury, MNDALLAS, Nov. 21, 2024 /PRNewswire/ -- Topgolf announced today it recently broke ground on a three-level venue in Woodbury, Minnesota, set to open in late 2025. This is the second venue in Minnesota in addition to an existing venue in Minneapolis – Brooklyn Center.The Basics Topgolf breaks ground on new venue in Woodbury, Minnesota. If you've never been to a Topgolf venue before, think of it as a modern golf experience where anyone – inc ...

Over the past few days, investors have not generally been willing to tee up with the stock of Topgolf Callaway Brands (MODG -1.98%). According to data compiled by S&P Global Market Intelligence, as of late Thursday, the golfing specialist's stock was down by almost 13% week to date. News of an uninspiring quarter for the company was the driving factor in the decline.A lousy day on the linksTopgolf unveiled its third-quarter results just after market close on Tuesday. Revenue for the period was slightly over ...

Topgolf Callaway Brands Corp. (MODG) reported third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. However, the top and bottom lines declined on a year-over-year basis.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.MODG’s Q3 Earnings and RevenuesIn the quarter under review, the company reported an adjusted earnings per share (EPS) of 2 cents, beating the Zacks Consensus Estimate of loss of 18 cents per share. In the prior-year quarter, the co ...

Financial Data and Key Metrics Changes - Q3 consolidated revenues were $1.013 billion, a decrease of 3% year-over-year, primarily due to an 11% decrease in Active Lifestyle revenue [38][39] - Adjusted EBITDA for Q3 was $120 million, declining 27% compared to the previous year [38] - REIT-adjusted net debt decreased approximately $220 million, or over 20% year-over-year, with net debt leverage decreasing to 1.8 times from 2.1 times [37][46] Business Line Data and Key Metrics Changes - Topgolf revenue grew 1% to $453 million, driven by new venues, but same venue sales decreased by 11% [39][40] - Golf Equipment segment revenue was up slightly at $294 million, attributed to a shift in shipment timing [41] - Active Lifestyle segment revenue decreased 11% year-over-year, mainly due to lower sales of Jack Wolfskin [43] Market Data and Key Metrics Changes - U.S. rounds played increased year-over-year, indicating a strong market for golf participation [16] - Datatech's U.S. sell-through for clubs was down slightly by 4% in Q3 but remained flat year-to-date [16][17] - Callaway's golf ball market share reached 21.8%, up 140 basis points year-over-year, marking a new record [19] Company Strategy and Development Direction - The company is focused on separating Topgolf from the legacy business to maximize shareholder value, with a target date for a potential spin-off around mid-next year [68] - Initiatives to drive long-term traffic growth at Topgolf include launching new games and enhancing consumer experiences [12][13] - The company is committed to disciplined cost management and operational efficiencies across all business segments [35][56] Management's Comments on Operating Environment and Future Outlook - Management noted that Q3 results exceeded guidance despite a challenging macroeconomic environment, with consumer activity showing signs of recovery [10][34] - The company is lowering its full-year revenue guidance by approximately $30 million due to lower sell-through in Q3, viewing it as short-term volatility rather than a new trend [10][52] - Management expressed confidence in the long-term outlook for core markets and product categories, despite recent challenges [10][56] Other Important Information - The company plans to open seven new venues this year, with a total of 100 owned and operated venues by year-end [15][48] - Inventory levels decreased by $70 million, or 10%, to approximately $667 million at the end of Q3 2024 [49] - The company expects to generate positive free cash flow this year at both the total company and Topgolf [56] Q&A Session Summary Question: Recent traffic versus average spend at Topgolf - Management indicated that the recent trends at Topgolf showed a balanced impact between spend per visit and traffic, with a notable decline in the events business [58] Question: Improvement in Golf Equipment sell-through trends - Management confirmed that the Golf Equipment business remains healthy, with sell-through trends improving in September and October after a dip in Q3 [61] Question: Same venue sales guidance for Q4 - Management stated that the wide guidance range for Q4 is due to potential weather impacts, particularly in December [67] Question: Spin-off timeline for Topgolf - Management confirmed that they are fully engaged in the process of separating Topgolf, targeting mid-next year for a potential spin-off [68] Question: Promotional efforts at Topgolf - Management clarified that recent promotions have focused on the consumer side, with targeted efforts to improve effectiveness using a new consumer data platform [82] Question: Impact of venue openings on cash flow - Management noted that slowing venue openings could positively impact cash flow in 2025, but specific guidance for that year is not yet provided [86]

For the quarter ended September 2024, Topgolf Callaway Brands (MODG) reported revenue of $1.01 billion, down 2.7% over the same period last year. EPS came in at $0.02, compared to $0.20 in the year-ago quarter.The reported revenue represents a surprise of +3.22% over the Zacks Consensus Estimate of $981.29 million. With the consensus EPS estimate being -$0.18, the EPS surprise was +111.11%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compar ...

Topgolf Callaway Brands (MODG) came out with quarterly earnings of $0.02 per share, beating the Zacks Consensus Estimate of a loss of $0.18 per share. This compares to earnings of $0.20 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 111.11%. A quarter ago, it was expected that this maker of golf equipment and accessories would post earnings of $0.28 per share when it actually produced earnings of $0.42, delivering a surprise ...

| --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-----------------------------|-------|-------------------------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | Third Quarter 2024 Earnings | | | | | | | | | | | | Conference Call November 12, 2024 | | | | | | | | | | | | | | | | | | | | | | | | | IMPORTANT NOTICES Forward-looking Statements. During the presentation, any comments made about future plans, events, financial results, performance, ...

Revenue Performance - Topgolf net revenues increased by $5.5 million (1.2%) for the three months and $48.4 million (3.7%) for the nine months ended September 30, 2024, driven by new venue openings and Toptracer bay installations, partially offset by lower same venue sales[118] - Golf Equipment net revenues remained flat with a $0.1 million increase for the three months ended September 30, 2024, but decreased by $30.9 million (2.6%) for the nine months, primarily due to softer market conditions in Korea and unfavorable foreign currency impacts in Asia[119] - Active Lifestyle net revenues declined by $33.3 million (11.1%) for the three months and $90.3 million (10.3%) for the nine months ended September 30, 2024, due to soft market conditions in Europe and Asia, and a decline in wholesale sales at TravisMathew[120] - Total net revenues decreased by $27.7 million (2.7%) for the three months and $72.8 million (2.1%) for the nine months ended September 30, 2024, primarily due to declines in Active Lifestyle and Golf Equipment segments[117] - Net revenues in the United States decreased by $12.7 million (1.7%) for the three months ended September 30, 2024, primarily due to a decline in wholesale sales at TravisMathew[123] - Net revenues in Europe decreased by $12.9 million (8.6%) for the three months ended September 30, 2024, primarily due to declines in wholesale sales at Jack Wolfskin[124] - Net revenues in Asia decreased by $3.7 million (2.8%) for the three months ended September 30, 2024, primarily due to soft market conditions in Korea and unfavorable foreign currency impacts in Japan and Korea[125] - Net revenues in Rest of World increased by $1.6 million (6.9%) for the three months ended September 30, 2024, primarily due to increased Golf Equipment and Active Lifestyle sales in Canada and Australia[126] - Total net revenues decreased by $27.7 million (2.7%) for the three months ended September 30, 2024, compared to the same period in 2023[122] - Topgolf net revenues increased by $5.5 million (1.2%) for the three months and $48.4 million (3.7%) for the nine months ended September 30, 2024, driven by new venue openings but offset by declines in same venue sales[148] - Total net revenues decreased by $27.7 million (2.7%) for the three months and $72.8 million (2.1%) for the nine months ended September 30, 2024, reflecting declines across multiple segments[147] Foreign Currency Impact - Foreign currency fluctuations had a favorable impact of $2.1 million on net revenues for the three months but an unfavorable impact of $16.5 million for the nine months ended September 30, 2024[115][120] - Other income, net decreased by $4.2 million (80.8%) for the three months ended September 30, 2024, due to higher foreign currency losses[140] - Other income, net increased by $8.4 million (350.0%) for the nine months ended September 30, 2024, driven by reduced foreign currency transaction losses and dividend income[140] - The company's sensitivity analysis model estimates a potential loss of $27.9 million from foreign currency forward contracts due to a 10% unfavorable movement in foreign currencies[164] Operating Expenses and Costs - Cost of products decreased by $8.6 million (2.6%) for the three months ended September 30, 2024, primarily due to decreased sales in the Active Lifestyle operating segment[130] - Other venue expenses increased by $13.5 million (4.3%) for the three months ended September 30, 2024, primarily due to the addition of new Company-operated Topgolf venues[133] - Selling, general and administrative expenses increased by $8.1 million (3.3%) for the three months ended September 30, 2024, primarily due to higher employee benefits and payroll-related costs[135] - Research and development expenses decreased by $0.6 million (2.7%) for the three months ended September 30, 2024, primarily due to reduced employee costs[136] - Venue pre-opening costs decreased by $3.0 million (43.5%) for the three months ended September 30, 2024, due to fewer planned venue openings in 2024[137] - Net interest expense increased by $5.4 million (10.3%) for the three months and $19.9 million (13.0%) for the nine months ended September 30, 2024, primarily due to new Topgolf venue financing[140] - A 10% increase in interest rates would result in an incremental expense of $4.6 million over the 12-month period ended September 30, 2024[166] Operating Income - Topgolf operating income decreased by $10.6 million (27.2%) for the three months but increased by $1.6 million (1.9%) for the nine months ended September 30, 2024, due to improved operational efficiencies and cost management[148] - Golf Equipment operating income decreased by $8.4 million (23.9%) for the three months and $26.9 million (12.6%) for the nine months ended September 30, 2024, due to higher freight costs and unfavorable foreign currency impacts[150] - Active Lifestyle operating income decreased by $20.6 million (51.5%) for the three months and $38.0 million (39.3%) for the nine months ended September 30, 2024, due to revenue declines and operating expense deleverage[151] - Total operating income decreased by $40.1 million (54.3%) for the three months and $66.7 million (24.7%) for the nine months ended September 30, 2024, primarily due to lower segment operating income[147] Net Income and Earnings - GAAP net loss for the three months ended September 30, 2024, was $3.6 million, compared to net income of $29.7 million in 2023, with diluted loss per share of $(0.02)[143] - Non-GAAP net income for the three months ended September 30, 2024, was $4.3 million, compared to $35.8 million in 2023, with diluted earnings per share of $0.02[143] - GAAP net income for the nine months ended September 30, 2024, decreased to $65.0 million from $172.1 million in 2023, with diluted earnings per share of $0.35[145] - Non-GAAP net income for the nine months ended September 30, 2024, was $101.8 million, compared to $141.8 million in 2023, with diluted earnings per share of $0.54[145] Cash and Financial Position - Cash and cash equivalents increased by $48.7 million to $447.5 million at September 30, 2024, driven by lease financings and used for operations, capital expenditures, and acquisitions[152] - Inventory decreased by $128.0 million to $666.4 million at September 30, 2024, reflecting seasonality and inventory reduction initiatives[154] - Cash and cash equivalents increased by $129.0 million to $863.0 million as of September 30, 2024, compared to September 30, 2023[155] - 38% of the company's cash is held in regions outside the United States as of September 30, 2024[155] - Total significant cash obligations as of September 30, 2024 amount to $10,740.7 million, including long-term debt of $1,500.3 million and interest payments of $594.5 million[158] - Estimated capital expenditures for the year ending December 31, 2024 are $190.0 million, with $130.0 million allocated to the Topgolf business[161] Strategic Initiatives - The company announced a strategic plan to separate into two independent companies: Callaway and Topgolf, with the spin-off expected to be completed in the second half of 2025[107] Key Performance Indicators - Same venue sales, a key performance indicator, declined due to slower walk-in traffic and a softer corporate events business[118] - The company uses non-GAAP measures, including constant currency adjustments and same venue sales, to evaluate business performance and provide additional insights to investors[108] Segment Performance - The Active Lifestyle segment includes brands like Callaway Golf, TravisMathew, Jack Wolfskin, and OGIO, with sales impacted by seasonal trends and market conditions[113] - The company operates 98 Company-operated venues, including 92 Topgolf venues and 2 BigShots venues in the U.S., and 4 venues in the U.K. as of September 30, 2024[110] Tax Impact - Income tax benefit for the three months ended September 30, 2024, was $19.4 million, compared to $3.0 million in the same period of 2023, with an effective tax rate of 84.3%[141] - Income tax benefit for the nine months ended September 30, 2024, was $24.1 million, compared to $53.0 million in 2023, with an effective tax rate of (58.9%)[141]

Exhibit 99.1 TOPGOL TOPGOLF CALLAWAY BRANDS ANNOUNCES THIRD QUARTER 2024 RESULTS HIGHLIGHTS • Q3 Consolidated Revenues and Adjusted EBITDA were ahead of expectations. • The Callaway brand maintained its #1 position in U.S. market share in total golf clubs and achieved record U.S. market share in golf ball. • The Company further strengthened its available liquidity position to $863 million, increasing $129 million year-over-year. • The Company reaffirmed its expectation for full year positive Adjusted Free C ...