Callaway Golf sales decline for the first quarter in wake of Japan Disaster and slow economic recovery of US
Callaway Golf has declared a steep decline in the liquidity of its share for the first quarter of the year and cited the Japan disaster as the major cause of the decline. The Carlsbad based company earned $12.8million for its 15cents shares as compared to
last year’s $20.3million for the same quarter. The company floated shares worth $286million this year as compared to $303million last year.
The March 11 earthquake in Japan destroyed Callaway’s most of the business concerns in the country while many of the tournaments on the local tours were cancelled. Not only the sales of the company dropped by 30 percent in Japan, they also recorded a decline
of 4 percent in the US. The sales deficit in the US has been a reason of concern not only for the officials at Callaway but also for many of the Wall Street Gurus who are eyeing a possible slowdown of the economic recovery of the country. The first quarter
of the year saw unpredictable weather in the US which can also be a cause of major shift in the sales figures.
Callaway has temporarily suspended the financial guidance for the rest of 2011 as it renders it impossible to predict the total loss the company might incur in the whole year. Chief Executive of the company George Fellows said that Callaway Golf has delayed
many of its promotional ventures and will return to them when the sales have picked up. Fellows reiterated the company’s stance for the betterment of the sport and said that the officials are optimistic about their sales targets for the rest of the year.
"We are encouraged by early signs of recovery in Japan and by early indications that the overall golf industry is recovering in 2011," he said. "We are seeing improved industry sales across a majority of product categories, driven by increases in average
selling prices and increased traffic at retail."
Callaway Golf was founded in 1982 by Ely Reeves Callaway Jr., a textile industry tycoon who was an avid fan of the sport. Callaway had a habit of using the Hickory Sticks as clubs and as the Hickory Sticks Inc. ran low on their finances, Callaway jumped
in to buy half of the company. He renamed the company as Callaway Hickory Stick USA and later bought the whole company in 1984.
The company suffered another setback last week, when the US District Court ruled out one of the applications filed by the company accusing Titliest's parent company, Acushnet, of patent rights violation. Callaway and Acushnet were locked in a court battle
for the last many years and while Callaway had earlier won the battle in 2007, the court dismissed the ruling later, citing inconsistencies in jury’s verdict. Callaway accused Acushnet of stealing its patented ProV1 golf ball design.
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