Jack Wolfskin Exits U.S. Market After Major Push in Region; Parent Company Announces Strategic Review of TopGolf
Parent company TopGolf announced several changes this month, including a possible TopGolf spin-off and the rightsizing of the Jack Wolfskin Brand.
By Kate Robertson
Jack Wolfskin wound its U.S. business down in the spring of 2024. Photo by Dennis for stock.adobe.com.
TopGolf Callaway Brands is undertaking a strategic review and could potentially spin off TopGolf, its golf entertainment chain, and has rightsized its Jack Wolfskin brand to focus on Europe and China after winding down its U.S. business.
President and CEO Chip Brewer said on the company’s second quarter earnings call last week that disappointing sales at TopGolf were behind the lower-than-expected company quarterly revenue of $1.15 billion. That’s a 1.9% decline compared to the same quarter last year. Quarterly net income was $62.1 million, a 47.1% decline from the same quarter last year.
The company has now lowered its full-year revenue guidance by approximately $225 million to a range of $4.2 billion to $4.6 billion.
“We remain convinced that TopGolf is a high-quality business with significant future opportunity,” Brewer said. “It’s transforming the game of golf, and we believe it will deliver substantial growth and financial returns over time. At the same time, we have been disappointed in our stock performance for some time, as well as the more recent sales performance.”
Quarterly revenue in TopGolf Callaway’s golf equipment category declined by 8.2% year-over-year to $413.8 million because of a change in equipment launch timing.
Revenue in TopGolf Callaway’s active lifestyle category declined by 3.2% to $249.6 million in the quarter because of lower wholesale revenue at Jack Wolfskin, which announced in May that it was exiting the U.S. market. The active lifestyle category also includes soft goods under the Callaway, TravisMathew, Jack Wolfskin, and OGIO brand names.
Jack Wolfskin Brand Exits the U.S.
Brewer congratulated the Jack Wolfskin team for achieving its second quarter sales targets, rightsizing the business, and shifting its strategic focus back to its core markets in Central Europe and China.
“We expect revenues in this segment to decline year over year as we form a new base on which to resume growth,” Brewer said.
Jack Wolfskin reported lower wholesale revenue in Europe in the first quarter of 2024, which contributed to a 15.2% decline in the active lifestyle category to $271.5 million.
TopGolf Callaway acquired Jack Wolfskin for $476 million in a deal that closed in 2019. In 2020, its first U.S.online store opened. Brand representatives shared their wholesale strategy with The Daily last year.
Veteran industry analyst Matt Powell said Jack Wolfskin is just one of many other brands that need to be “completely reimagined.” Too many of the brand’s products are geared toward cold weather, he said. Plus, the Jack Wolfskin business in the U.S. wasn’t very substantial.
“It makes sense to pull back in the U.S. and use the original countries to fix the brand,” Powell said. “Once that is accomplished the brand can be reintroduced to the U.S.”
Founded in Frankfurt, Germany in 1981, Jack Wolfskin now employs approximately 1,400 people and has 226 stores in Europe and 269 stores in Asia.
“Despite macro headwinds including the cumulative impact of negative FX trends, persistently high inflation, and recent softer-than-expected traffic to our TopGolf venues, I am incredibly proud of our team’s ability to drive market share gains in our products business as well as the continued strengthening of the digital capabilities and fundamental venue profitability at TopGolf,” Brewer said in a statement.
Original story published by The Daily Outdoor Retailer.