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Jul 20, 2021
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I posted on Callaway last year in August when ELY was under $15 and had just acquired Top Golf, for some reason it was deleted.
The golf industry is booming, supply is now catching up in the equipment side which was suffering from COVID supply chain issues. I work in the golf industry and we are seeing what will likely be the highest rounds played ever in 2021, beating out 1997 and 2020 respectively the current #1 and #2 spot. Here is a report from the National Golf Foundation out last week:
Golf equipment sales: mid-year update.
The surge in equipment sales that began last May is showing no signs of letting up. Through June, YTD combined golf club and ball wholesale dollar sales are up 77% over last year and 35% over 2019.
All this equipment is not gathering dust on store shelves. Retailers we've talked to tell us that sell through has been very good and inventories are not getting bloated.
At the same time, equipment shipments appear to have resumed a more normal seasonal pattern, albeit at higher volume, which can be seen in the following graph comparing YTD sales for 2019, 2020 and 2021.
As we've said before, these next few summer months will be the bellwether for golf in 2021. So far the signs are very encouraging.
May 10th ELY Q1 2021 EPS was 0.62 on expectations of 0.12 a 416.67% surprise. They also beat revenue by 14.47%. The stock went from $29 on May 10th to $37 on June 1st after a spike to $34 on May 11th. Estimates right now are 0.06 for EPS. This will also be the first full quarter with Top Golf revenue on it.
My positions are +20 Aug 20 (32d) 33 C (.55 each at close today) and I will continue to add to this as we approach the August 5th earning date. I also have some long term hold shares.