Callaway Expects Tariff Costs to Reach $75 Million by End of 2026

Callaway is projecting increased tariff costs this year that would raise the golf equipment manufacturer’s combined tariff expenses in 2025 and 2026 to $75 million.

“Incremental tariff expense of approximately $40 million in 2026 on top of approximately $35 million last year is driving higher than historical price points in several categories,” Callaway president, CEO and director Oliver “Chip” Brewer said Thursday on the company’s fourth-quarter earnings call, which included full-year results for 2025.

President Donald Trump in April announced the U.S. would start imposing a 10%, across-the-board tariff on all imports, and higher rates for nations the administration considers bad actors on trade. Callaway primarily uses countries in Asia for production and Mexico for assembly.

Callaway reported $2.08 billion in sales in 2025, which was down 0.8% compared to 2024, due to a decrease in soft goods sales, while golf equipment sales were flat. The company’s golf equipment segment was hit hardest by tariffs, costing $25 million, while soft goods bore the remainder of roughly $10 million.

Some “restructuring efforts” as a result of tariffs continue for Callaway, Brewer said, including “redesigning product where appropriate” and raising prices. Callaway is projecting $1.98 billion to $2.05 billion in net sales in 2026.

Taking a Swing

Callaway last month completed the sale of a 60% stake in Topgolf to private-equity firm Leonard Green & Partners in a deal valued at $1.1 billion. 

The company has so far received $800 million in cash from the transaction and immediately repaid $1 billion in debt, Brewer said. Callaway remains a minority investor in Topgolf, but will no longer report financial details of that business.

Callaway counts golf stars Jon Rahm, Xander Schauffele, and Akshay Bhatia among its most popular professional endorsers. Last month, the company was sued by rival equipment manufacturer TaylorMade over allegedly false claims about golf balls, but Callaway executives did not address that situation on Thursday’s earnings call.