Shares of Topgolf Callaway Brands experienced a significant decline of 19% after hours on Wednesday. This downturn occurred as the golf-equipment and entertainment company adjusted its full-year sales and profit outlook. What's more, it provided a weak fourth-quarter sales forecast following what it described as a "challenging" third quarter.
Revised Financial Projections
Previously, Topgolf Callaway Brands projected full-year sales within the range of $4.42 billion to $4.47 billion. However, the company has revised this outlook to a lower range of $4.235 billion to $4.26 billion. Moreover, the adjusted earnings per share for the full year were expected to be between 63 cents and 69 cents. This figure has now been adjusted downwards to a range of 39 cents to 43 cents.
Disappointing Fourth-Quarter Sales Forecast
The company has also anticipated lackluster performance in the fourth quarter, with projected sales ranging from $847 million to $872 million. These projections fall below FactSet estimates, which suggest sales of around $1 billion. This decline in sales can be attributed to various factors such as cooling trends at Topgolf, a decrease in golf-ball sales, and fewer product launches.
Despite exceeding expectations in terms of per-share profits during the third quarter, Topgolf Callaway Brands faced challenges due to the waning popularity of corporate events and a decline in sales in various equipment categories. These setbacks have prompted adjustments in the company's financial outlook, leading to a noticeable drop in share value.
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