It has been a quarter-century since Tiger Woods captured his first victory at Augusta National Golf Club -- also known as The Masters. And the popularity of golf has seemed to ebb and flow with his prominence ever since.
That's why it's worth taking a look at how he has influenced interest in the game and whether his return could be a major shot in the arm for Acushnet Holdings (GOLF 2.61%).
Image source: Getty Images.
One-man show
Woods had won eight major tournaments -- including golf's four crown jewels -- by the end of 2002. Although the golf industry was feeling the effect of the recession, there were still a record number of golfers and golf courses in the U.S.
After a two-year gap, Woods won four more majors in 2005 and 2006 combined, followed by one each in 2007 and 2008. After Tiger's tremendous early success, injury, personal problems, and unflattering disclosures combined to stymie his winning ways. He's only captured two tournaments since 2013.
Keeping the momentum going
Using Alphabet's Google Trends, the declining interest in golfing is obvious. Despite seasonality -- more people play golf when it's warm outside -- interest in the game waned until the pandemic forced people to look outdoors for entertainment.
That renewed interest has been great for Acushnet. The company is the maker of all sorts of golf supplies and owns two of the top brands in the sport -- Titleist and FootJoy.
Data source: Google Trends. Chart by Author.
Acushnet's revenue climbed 33% year over year in 2021, and its management had enough confidence to boost the quarterly dividend to $0.18. Shares now yield 1.74%. Management's guidance for 2022 calls for sales growth of 2.7% to 5%. That's respectable, following the massive growth spurred by COVID.
Although the resurgence appears priced into Acushnet based on the price-to-sales ratio, growth may account for the premium.
GOLF profit-to-sales ratio data by YCharts.
The high end of the company's projected revenue growth would be the fastest Achushnet has grown since at least 2014 -- as far back as the data goes. And profits have increased faster than sales recently. The current price-to-earnings ratio of 17.5 is only slightly above its pre-pandemic low of 15.
The scorecard
Despite falling short in his Masters comeback, Tiger's presence may inspire some of the golfers who packed their clubs away years ago to go play a round. That should persist if Tiger keeps competing in major tournaments.
Early numbers are encouraging. Disney's ESPN reported viewership up 20% from last year's opening round of the tournament and its highest since 2018. That was the year Tiger made his last comeback after taking three years off from the tournament. Golf fans and Achusnet shareholders hope to see him on the links again much sooner this time.
