third quarter 2026
Filed Nov 5, 2026Callaway Golf Company Announces Third Quarter 2026 Results; Raises Full Year 2026 Net Sales and Adjusted EBITDA Outlook
Third-quarter net sales declined 5.6%, but gross-margin expansion, 17.3% growth in Adjusted EBITDA, a return to GAAP profitability from continuing operations, debt repayment and raised full-year outlook supported a solid result.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 net salesGAAP | $436.9M | – | (5.6) % |
| Q3 2026 net sales constant currencynon-GAAP | $436.9M | – | (4.7) % |
| Nine months ended September 30, 2026 net salesGAAP | $1.74B | – | 2.6 % |
| Nine months ended September 30, 2026 net sales constant currencynon-GAAP | $1.74B | – | 2.7 % |
| Q3 2026 gross profitGAAP | $226.7M | – | – |
| Q3 2026 gross marginGAAP | 51.9 % | – | 1,210 basis points |
| Q3 2026 gross marginnon-GAAP | 45.0 % | – | 520 basis points |
| Nine months ended September 30, 2026 gross profitGAAP | $860.1M | – | – |
| Nine months ended September 30, 2026 gross marginGAAP | 49.5 % | – | – |
| Nine months ended September 30, 2026 gross marginnon-GAAP | 47.3 % | – | – |
| Q3 2026 total operating expensesGAAP | $182M | – | 1.4% |
| Nine months ended September 30, 2026 total operating expensesGAAP | $562.4M | – | – |
| Q3 2026 income from operationsGAAP | $44.7M | – | n/m |
| Q3 2026 non-GAAP income from operationsnon-GAAP | $16.2M | – | n/m |
| Nine months ended September 30, 2026 income from operationsGAAP | $297.7M | – | 63.4 % |
| Nine months ended September 30, 2026 non-GAAP income from operationsnon-GAAP | $265.7M | – | 43.7 % |
| Q3 2026 net income from continuing operationsGAAP | $48.1M | – | n/m |
| Q3 2026 non-GAAP net income from continuing operationsnon-GAAP | $22.9M | – | n/m |
| Q3 2026 net incomeGAAP | $45.7M | – | n/m |
| Nine months ended September 30, 2026 net income from continuing operationsGAAP | $198.8M | – | 89.7 % |
| Nine months ended September 30, 2026 non-GAAP net income from continuing operationsnon-GAAP | $208.5M | – | 145.6 % |
| Nine months ended September 30, 2026 net incomeGAAP | $214M | – | n/m |
| Q3 2026 diluted earnings per common share from continuing operationsGAAP | $0.26 | – | n/m |
| Q3 2026 non-GAAP diluted earnings per common share from continuing operationsnon-GAAP | $0.12 | – | n/m |
| Q3 2026 diluted net earnings per common shareGAAP | $0.25 | – | n/m |
| Nine months ended September 30, 2026 diluted earnings per common share from continuing operationsGAAP | $1.05 | – | 90.9 % |
| Nine months ended September 30, 2026 non-GAAP diluted earnings per common share from continuing operationsnon-GAAP | $1.10 | – | 144.4 % |
| Nine months ended September 30, 2026 diluted net earnings per common shareGAAP | $1.13 | – | n/m |
| Q3 2026 Adjusted EBITDAnon-GAAP | $35.9M | – | 17.3 % |
| Nine months ended September 30, 2026 Adjusted EBITDAnon-GAAP | $324.5M | – | 31.1 % |
| Nine months ended September 30, 2026 net cash provided by operating activities - continuing operationsGAAP | $272.4M | – | – |
| Nine months ended September 30, 2026 capital expendituresGAAP | −$29.5M | – | – |
| Cash and cash equivalents of continuing operations at September 30, 2026GAAP | $433.5M | – | – |
| Inventories at September 30, 2026GAAP | $536.2M | – | increased $5.4 million year-over-year |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Golf Equipment Q3 2026The Company shifted its irons launch timing and rationalized certain lower margin products; the successful launch of Mini Spinner fairway woods and TRTL putters in Asia partially offset the decline. | $281.5M | – | (7.9) % |
| Apparel, Gear and Other Q3 2026The quarterly sales decline was partially offset by an increase in TravisMathew net sales. | $155.4M | – | (1.1) % |
| Golf Equipment nine months ended September 30, 2026No segment-specific driver was provided for the nine-month period. | $1.20B | – | 3.2 % |
| Apparel, Gear and Other nine months ended September 30, 2026No segment-specific driver was provided for the nine-month period. | $538.6M | – | 1.4 % |
Full year 2026 and fourth quarter 2026 outlook
- RevenueFull year 2026 Consolidated Net Sales: $2.065 to $2.078B; Q4 2026 Consolidated Net Sales: $328 to $341
- NoteFull year 2026 Adjusted EBITDA: $272 to $280
- NoteQ4 2026 Adjusted EBITDA: $(53) to $(45)
Capital returns
- Repurchased $135 million of common shares year to date through September 2026.
- Year-to-date through September 30, 2026, the Company has repurchased approximately 9 million shares of its common stock.
- The Company has $70 million remaining repurchase authority under its current repurchase program.
- Acquisition of treasury stock was $(135.2) million for the nine months ended September 30, 2026.
What drove it
- GAAP and non-GAAP gross margins increased due to select price increases, cost reductions and rationalizing lower margin business.
- GAAP gross margin benefited from approximately $31.8 million of non-recurring benefits from tariff refunds, which were excluded from non-GAAP results.
- Adjusted EBITDA growth was driven primarily by improved gross margins, partially offset by lower revenue and a decrease in dividend income.
- Cost management initiatives following the Topgolf transaction mitigated cost-of-living increases and inflationary pressures.
- Foreign exchange headwinds in Asia negatively impacted third-quarter net sales.
Concerns
- Q3 net sales from continuing operations decreased 5.6% to $436.9 million.
- Golf Equipment Q3 net sales decreased 7.9% to $281.5 million.
- The Company expects Q4 results to be down year over year due to the strategic shift in launch timing, rationalization of lower margin business, investments in fitting, and less dividend income.
- Q4 2026 Adjusted EBITDA is guided to $(53) to $(45), versus $(25) in Q4 2025.
- Income from equity method investments was a loss of $(17.9) million in Q3 2026 and $(46.6) million for the nine months ended September 30, 2026.
What to watch
- Execution of the shifted irons launch timing and its effect on fourth-quarter sales.
- Whether gross-margin initiatives continue after the non-recurring tariff refund benefit is excluded.
- Demand for Mini Spinner fairway woods, TRTL putters in Asia and TravisMathew products.
- Delivery against full-year Consolidated Net Sales guidance of $2.065 to $2.078B and Adjusted EBITDA guidance of $272 to $280.
- Further deployment of the $70 million remaining repurchase authority and investment in new 3D printing capabilities.
Balance sheet and cash flow
- As of September 30, 2026, the Company was in a net cash position with $76 million in debt outstanding, including $26 million in financing leases, and unrestricted cash and cash equivalents of $434 million.
- Cash and cash equivalents were $433.5 million at September 30, 2026, compared with $903.2 million at December 31, 2025.
- Inventories were $536.2 million at September 30, 2026, compared with $625.3 million at December 31, 2025.
- Net cash provided by operating activities - continuing operations was $272.4 million for the nine months ended September 30, 2026, compared with $157.8 million.
- Repayments of long-term debt were $(1,428.2) million for the nine months ended September 30, 2026.
- Capital expenditures were $(29.5) million for the nine months ended September 30, 2026.
Analysis
Callaway reported a lower-revenue but substantially more profitable third quarter. Net sales from continuing operations decreased 5.6% to $436.9 million, while GAAP gross margin rose 1,210 basis points to 51.9% and non-GAAP gross margin rose 520 basis points to 45.0%. GAAP income from operations increased to $44.7 million from $4.8 million, and Adjusted EBITDA increased 17.3% to $35.9 million. The company cited select price increases, cost reductions and lower-margin-business rationalization as the core margin drivers, while GAAP margin also benefited from approximately $31.8 million of tariff refunds excluded from non-GAAP results.
The sales decline reflected the shifted timing of the irons launch, rationalization of lower-margin products and foreign-exchange headwinds in Asia. Golf Equipment revenue fell 7.9% to $281.5 million and Apparel, Gear and Other fell 1.1% to $155.4 million. Management said the decline was partly offset by higher TravisMathew sales and successful launches of Mini Spinner fairway woods and TRTL putters in Asia. Product-category results showed Apparel up 2.8%, while Golf Clubs, Golf Balls and Gear, Accessories & Other declined 8.9%, 4.5% and 7.3%, respectively.
The nine-month results show improvement despite the quarterly revenue decline. Net sales increased 2.6% to $1,736.6 million, GAAP income from operations rose 63.4% to $297.7 million and non-GAAP income from operations increased 43.7% to $265.7 million. Nine-month Adjusted EBITDA increased 31.1% to $324.5 million. Both operating segments expanded profitably, with Golf Equipment segment operating income up 21.8% and Apparel, Gear and Other segment operating income up 33.8%.
Cash deployment materially altered the balance sheet during the period. The company generated $272.4 million of operating cash flow from continuing operations in the nine months, repaid $(1,428.2) million of long-term debt and acquired $(135.2) million of treasury stock. At September 30, it reported $433.5 million of cash and cash equivalents, $76 million in debt outstanding including $26 million in financing leases, and $70 million of remaining repurchase authority. Inventory was $536.2 million, and management said it had increased $5.4 million year over year.
Management raised full-year 2026 Consolidated Net Sales guidance to $2.065 to $2.078B and Adjusted EBITDA guidance to $272 to $280. The fourth-quarter outlook nevertheless calls for lower sales of $328 to $341 and Adjusted EBITDA of $(53) to $(45), compared with $368 and $(25) in Q4 2025. The central issue for the next quarter is whether the margin and cost actions continue to offset the expected sales pressure from launch timing, product rationalization, fitting investments and lower dividend income.
Management, verbatim
We are pleased with our third quarter results, with revenue and Adjusted EBITDA exceeding expectations and continued strong progress on gross margins.
Chip Brewer, President and Chief Executive Officer of Callaway Golf Company
These results support an increase in our full-year outlook and demonstrate the benefits of our return to a focused, pure-play golf company.
Chip Brewer, President and Chief Executive Officer of Callaway Golf Company
With a strong balance sheet and a resilient golf consumer, we remain confident in our ability to strengthen our business and create long-term shareholder value.
Chip Brewer, President and Chief Executive Officer of Callaway Golf Company
Not in the filing
stated, not guessed- A previous earnings release outlook section was not provided; therefore, no comparison of actual results with prior guidance is presented.
- Q3 operating cash flow was not reported.
- Free cash flow was not reported.
- A dividend declaration or dividend payment was not reported.
- Q4 or full-year 2026 gross-margin, operating-expense and tax-rate guidance was not reported.
- Sequential comparisons for the reported quarterly metrics were not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.