Topgolf Callaway Reports $4.24 Billion Revenue for Fiscal Year 2024, Plans Strategic Separation

Topgolf Callaway Brands Corp. reported a total revenue of $4.24 billion for the fiscal year ending December 31, 2024, a decrease of 1.1% from $4.28 billion in 2023. The decline was primarily attributed to a 3.6% drop in product revenues, particularly within the Active Lifestyle segment, which saw significant decreases in sales from the Jack Wolfskin and TravisMathew brands. Conversely, service revenues from the Topgolf segment increased by 2.7%, driven by the opening of new venues, although this was offset by an 8.6% decline in same venue sales. The company also recorded a substantial goodwill impairment charge of $1.45 billion, reflecting ongoing macroeconomic pressures that have negatively impacted consumer spending.

Geographically, the United States remained the largest market, generating $3.10 billion in revenue, a slight increase of 0.7% from the previous year. However, revenues in Europe and Asia fell by 5.5% and 8.3%, respectively, due to weaker demand and unfavorable currency exchange rates. The Rest of World segment saw a 5.5% increase, primarily from sales growth in Australia and Canada. The overall decline in revenues was compounded by rising costs, with total expenses increasing by 35.8% to $5.50 billion, largely due to the goodwill impairment and higher operational costs associated with new venue openings.

In terms of strategic developments, Topgolf Callaway announced plans to separate into two independent companies: Callaway, focusing on golf equipment and an active lifestyle business, and Topgolf, a technology-enabled golf entertainment company. This separation is expected to be executed through a tax-free spin-off in the second half of 2025, pending regulatory approvals and market conditions. The company believes that this strategic move will enhance focus and optimize capital allocation for both entities, allowing investors to evaluate each business on its own merits.

Operationally, Topgolf Callaway employed approximately 30,000 individuals across 27 countries as of December 31, 2024. The company operates 100 venues, with 96 in the U.S. and additional locations in the U.K. and other countries. The Topgolf segment continues to expand, with new venues contributing to revenue growth despite challenges in same venue sales. The company also reported a decrease in inventory levels, down to $757.3 million, reflecting effective inventory management and sell-through strategies.

Looking ahead, Topgolf Callaway anticipates that the separation will allow both companies to pursue distinct growth strategies more effectively. However, the company remains cautious about the economic environment, particularly regarding inflation and consumer discretionary spending, which could impact future performance. The management emphasized the importance of adapting to market conditions and consumer preferences to drive growth in both segments.