Callaway Golf Company Management Roadshow Takeaways & Model Implications; Raising PT To $18

Research evidence excerpt

Callaway Golf Company Management Roadshow Takeaways & Model Implications; Raising PT To $18

y) is switching to a 2-yr launch cadence following supply chain

headwinds by our work which could create an air pocket of competitive launch product

in ’27 opening up a potential market share opportunity for Callaway.

• Apparel: On TravisMathew (which represents the majority of the Apparel segment) -

mgmt cited roughly flat market share for the brand over the past year, though recent

merchandising and marketing changes have “resonated” with growth in Women’s, and

Men’s now inflecting, translating to a “steady growth” baseline of +LSD% revenue

growth annually (and prudently below the ~5% CAGR since FY22, by our math).

Near-term & representing incremental FY26 revenue growth upside in our view – 1Q

saw underlying +8% revenue growth by our math (excluding strategic actions and the

timing shift out of 2Q into 1Q), with no structural constraints to delivering similar

underlying high-single-digit revenue growth over the balance of the year (= upside for

+3-4% FY26 reported revenue growth on our math > mgmt’s -2.2% to +0.5% revenue

growth guidance). To that point, management described a “prudent” approach taken to

FY26’s revenue growth forecasts to account for potential pricing pushback (albeit none seen

to date on CALY’s +mid-single-digit pricing growth across core equipment) and

“macro” headwinds in the current environment.

#3: Mid-to-High-40s Gross Margin Opportunity Multi-Year: Relative to FY25’s 42.1%

gross margin rate, management outlined an opportunity to improve gross margins to the mid-

to-high 40’s multi-year (relative to ~46% on average across FY17-19), with our work

pointing to FY26 gross margins of 44.2% on our model (> Street 43.6%). Specifically near-