Acushnet Eyes New Ball Facility

2008-11-06

Share this article:  Digg |  StumbleUpon |  del.icio.us |  Reddit

By Steve Pike
 
The Acushnet Company (Titleist, FootJoy, Cobra) plans to build a new golf ball manufacturing facility in Asia within the next two to three years, according to Bruce Carbonari, chairman of Acushnet parent Fortune Brands. Carbonari did not say where the plant will be built, but it's most likely to be in China. FootJoy already owns a glove factory in Thailand.
 
Fortune Brands reported Acushnet's third quarter sales were $307.9 million, a 3.6 percent drop from the same period a year ago. Fortune reported the Acushnet Company's earnings in Q3 were $24 million compared to $30 million the same period a year ago.
 
For the nine-month period, Acushnet's sales dropped 0.3 percent to $1.156 billion and its earnings dropped 16.6 percent to $143.6 million.
 
None of these numbers are particularly surprising given the slowness of the overall economy and the continued stagnation in golf rounds played in the United States, despite the head-in-the sand approach some grow the game supporters continue to take.
 
Titleist didn't have a new Pro V1 golf ball this year, which could also have impacted its sales. Sources say the company is working on a new generation of Pro V1 golf balls that could launch early next year.
 
Fortune Brands said decreased Q3 sales in the United States and in Europe were partially offset by double digit increases in sales in Korea, Japan and China. Golf ball sales were slightly lower in the third quarter compared to the same period a year while Titleist club sales were higher on the strength of AP1 and AP2 irons and Scotty Cameron putters. Cobra and FootJoy also were slightly down in the quarter compared to the same period a year ago.
 
None of these numbers are particularly surprising given the slowness of the overall economy and the continued stagnation in golf rounds played in the U.S., despite the head-in-the sand approach some grow the game supporter continue to take. The new Titleist 909 series of drivers, which begin shipping in November, should help boost club sales, and certainly a new Pro V1 will generate considerable sales.
 
The bottom line is that despite its slowdown, the Acushnet Company still knows how to make money. Perhaps not as much as in previous quarters or years, but rest-assured any of its competitors would be happy to be in its FootJoys.