GOLF 20/20 and TEConomy Partners released their latest U.S. Golf Economy Report indicating that the sport is trending positively. Direct economic impact derived from the game grew 22%, to $84.1 billion between 2011-2016. Golf facilities are generating more revenue (+15% to $34.4 billion), Topgolf has lifted the performance of alternative facilities (think: driving ranges, indoor facilities) and equipment, apparel and media sales have increased since ‘11 (up to $6 billion). Though the report paints a positive overall image of the industry, it must be noted that the number of golf facilities has declined (-737 to 15,014), new course construction is down (-59% to $210 million) and golf community development still trails ’05 levels ($7.2 billion, down from $11.6 billion).
Howie Long-Short: Golf stocks are far outperforming the S&P YTD; Callaway Golf (ELY) is +20% YTD (to $16.74), Acushnet (GOLF) is +13.75% YTD (to $23.98) and the S&P is -1.45% YTD. While it would be easy to attribute the sales growth to Tiger Woods’ return, both companies have been headed in the right direction for some time; ELY is +74% over the trailing 3 years, while GOLF is +35% since its ’16 IPO. The U.S. Golf Economy Report indicated that the industry’s strongest sales growth was coming from the equipment category, a far more logical reason for ELY & GOLF’s outperformance.
Fan Marino: Mets star Yoenis Cespedes, a career .270 hitter, is hitting below the Mendoza line (.195) in 2018; but, believes he’s identified the problem – a “golf deficiency”. Cespedes, who says he hasn’t hit the links since June, claims the sport helps him to “keep my hands inside and keep watching the ball in order to hit it well.” I’m not buying that excuse. If he hasn’t swung a club since last summer, how did he manage to hit .324 (in 20 games) in spring training? With that said, I do not believe one’s golf swing has any impact on his/her baseball swing.
Fun Fact: Today is National Golf Day. To celebrate, visit your local Topgolf location (Las Vegas excluded); they’re offering complimentary lessons.
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