Shares of Callaway Golf (MODG 1.63%) jumped as much as 16.1% in trading on Wednesday after the golf and entertainment company reported first-quarter 2022 financial results. Shares closed the day up 10.4%, making them one of the few stocks moving higher in the market right now.
First-quarter revenue jumped 59.6% from a year ago to $1.04 billion, and net income calculated under generally accepted accounting principles (GAAP) was $86.7 million, or $0.44 per share. On an adjusted basis, which pulls out one-time items, earnings were $0.36 per share; analysts were expecting just $0.24 per share.
Management also increased its full-year revenue outlook to a range of $3.94 billion to $3.97 billion and expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $535 million to $555 million. For perspective, that means the company's current market cap of $3.66 billion is just 6.7 times the midpoint of this year's adjusted EBITDA guidance.
Spending has clearly picked up for consumer discretionary purchases, and that's causing the jump in revenue and earnings. Callaway's acquisition of Topgolf -- a chain of practice ranges, party sites, and restaurants -- continues to pay off and is expected to generate $1.56 billion in net revenue and $225 million to $240 million in adjusted EBITDA this year.
If the company can perform this well in a quarter when GDP is slowing, then the future looks extremely bright.