What happened
Shares of Callaway Golf (ELY 5.05%) 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.
So what
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.
Image source: Getty Images.
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.
NYSE: ELY
Key Data Points
Now what
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.
