NANTUCKET TAKES: Leadership in Balls and Supply Chain Driving Durable Growth

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NANTUCKET TAKES: Leadership in Balls and Supply Chain Driving Durable Growth

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years, supported by growth in women, juniors, and aging demographics. While rounds of play are

influenced by weather, mgmt highlighted that rounds have trended upward since the 2021 peak

with only one year of decline. Industry supply remains tight following years of course closures pre-

COVID, with many markets now capacity constrained, supporting a favorable demand backdrop.

Supply Chain Control and Vertical Integration Provide Stability. Acushnet maintains a highly

controlled and diversified supply chain, including ball plants in Massachusetts and Thailand, a

footwear JV in Vietnam, and glove assembly across multiple global markets. Mgmt emphasized

a "make what we sell" philosophy, which supports quality control and consistency. This vertical

integration, combined with scale and infrastructure investment, provides a meaningful advantage

versus competitors.

Margin Profile Supported by Pricing and Scale. Mgmt noted that recent pricing actions have

supported margins and views ~50% gross margin as reasonable longer term. Investment in

manufacturing capacity and infrastructure, including ~$95M in capex this year, should further

support operating leverage as demand remains strong. While some share has been left on the Randal J. Konik * | Equity Analyst

table due to capacity constraints, mgmt highlighted flexibility within its production mix and expects (212) 708-2719 | rkonik@jefferies.com

improved availability over time. Carlos Gallagher * | Equity Associate

+1 (786) 535-2025 | cgallagher1@jefferies.com

Resilient End Market with Limited Cyclicality. The ball business remains relatively resilient, as avid

golfers continue to play and require replacement product.