Shares for Topgolf Callaway Brands Corp. have dropped the most since October 2020, following the company’s first quarters earnings report on Wednesday.
The company reduced its profit forecast for this year, sending its stock into a 13% plunge, notes Bloomberg. Callaway also lowered its 2023 projection for same venue sales growth, but said it is still on track to open 11 new Topgolf venues this year.
“With the March banking crisis and what we believe is a trend towards many companies further reducing corporate spend, we viewed it as prudent to lower our balance of year corporate sales expectations versus our original budget,” said Topgolf Callaway Brands CEO and president Chip Brewer.
Revenues for Callaway’s golf equipment segment decreased $24.3 million (5.2%) year-over-year for the quarter, while Q1 revenue for its Topgolf business shot up $81.5 million, a 25.3% year-over-year increase.
Callaway bought Topgolf for $2.6 billion in March 2021, and rebranded its corporate name to emphasize the high-tech golf entertainment company.
Despite the market’s negative reaction to Callaway’s earning report, the company remains well-positioned to capitalize on the growing participation of golf in the U.S. A recent study found 41.1 million Americans played golf in 2022, nearly 10 million more than 2016’s golf participation total.