Callaway Golf Company (NYSE:ELY) announced today that is increasing its 2014 earnings guidance to $0.17 – $0.19 per share compared to prior guidance of $0.15 – $0.18 per share. Callaway also announced that it is refining other aspects of its 2014 guidance but maintaining its 2014 sales guidance, which is an expected increase in net sales of approximately six percent (to approximately $890 million) compared to 2013. In addition, the company announced revisions to its guidance for 2015 as a result of the recent volatility in foreign currency exchange rates.
“We are pleased with the success we have had in 2014, including significant improvements in our operations and financial results, as well as improvements in brand momentum and market share gains,” said Callaway President Chip Brewer. “This success will position us well for 2015 from an operational perspective. However, because approximately half of our business is transacted outside of the United States, if the recent strengthening of the U.S dollar persists or strengthens further, it will have a significant unfavorable impact on our reported results for 2015. Fortunately, despite these potential currency effects, we continue to see strong overall results on a constant currency basis in most areas of our business and expect continued brand momentum and market share gains in 2015.”
Since Callaway last provided guidance this past October, the company said the U.S. dollar “strengthened significantly’’ against most foreign currencies in which it conducts business. If these rates persist or the U.S. dollar strengthens further, Callaway said the exchange rates are expected to have a “significant negative impact’’ upon its 2015 reported results. For example, Callaway said the change in rates over the last two months has negatively affected 2015 projected sales by $31 million and projected earnings by $0.26 per share.
If the current rates persist at these levels throughout 2015, the company said it would expect for 2015 a “modest decline’’ in reported sales and approximately breakeven profitability.