Callaway Golf’s turnaround remains on track

Callaway Golf beat Wall Street’s estimates for sales and profit for its fourth quarter, despite headwinds from a strong dollar.

The Carlsbad golf equipment maker reported sales of $153 million, up 14 percent from the same quarter last year. It lost $30 million, or 33 cents per share, in the winter quarter, which is typically slow for golf.

The loss was smaller than the 36 cents per share that analysts had forecast on sales of $149 million.

Chief Executive Chip Brewer told analysts in a conference call that the company continues to gain ground against competitors, particularly in the U.S. Callaway ended the quarter with an overall golf equipment market share of 21 percent — its highest level since 2003.

“We ended the year as the No. 1 selling brand …. in fairway woods, putters, irons and total clubs, and the No. 2 brand in drivers and golf balls,” Brewer sa.

For its full year, Callaway’s sales came in at $844 million, down 5 percent from the prior year, mostly because of unfavorable foreign exchange rates.

The company gets about half its revenue from overseas sales — led by Japan and Europe. So exchanges rates clipped revenue reported in U.S. dollars.

But Brewer said Callaway remains the leading American golf brand in Japan with a 15 percent market share, and is the overall top golf brand in Europe with just under 21 percent market share.

Net income for the year was $14.6 million, or 17 cents a share. That’s down from $16 million, or 20 cents per share, for 2014.

Looking ahead, Callaway’s first quarter expects sales of round $275 million and earnings per share between 33 cents to 39 cents.

The company also said it has reached a joint venture in Japan with clothing maker TSI Groove & Sports Co. It will sell Callaway-brand apparel in that country. Previously, Callaway had licensed its brand name.

And Brewer said Callaway — with $50 million in cash and no long term debt — will begin looking at acquisitions this year.

“We are moving through the turnaround stage,” he said. “We continue to be encouraged by what we see in the golf industry. Participation in the game has stabilized.”

Total rounds played in the U.S. rose 2 percent last year, according to industry research firm Golf Datatech.

Callaway released results Thursday after markets closed. Its shares ended the day at $8.34 on the New York Stock Exchange. In early after hours trading, shares rose 11 cents to $8.45.