Topgolf Callaway Brands has posted a sales drop in the first quarter, which was mainly attributed to the declines at the Topgolf business.

The company’s net revenues for the quarter ended March 31 fell 4.5 per cent to $1.092 billion.

The Topgolf business was the biggest underperformer with a 6.9 per cent sales drop and 12 per cent comparable sales decline. It also swung to an operating loss of $11.9 million from an income of $2.9 million last year.

The active lifestyle segment saw sales decrease 6.1 per cent due to the planned rightsizing of the Jack Wolfskin business.

At the golf equipment division, sales decreased by a smaller 1.4 per cent, primarily due to unfavorable foreign currency rates.

“We are pleased with our first quarter results as we met or beat our plan in all segments of our business,” commented Chip Brewer, president and CEO. 

“We are particularly pleased with the performance of our Golf Equipment business where the Elyte Driver received numerous awards and we started to benefit from the cost reduction and margin improvement initiatives we began implementing in 2024.”

Operating income was flat on a GAAP basis but increased 20 per cent on a non-GAAP basis. Adjusted EBITDA rose 4 per cent to $167.3 million, driven by increased profitability in the golf equipment and active lifestyle segments.

The company has lowered its full-year outlook for Topgolf, expecting net sales to fall 1-7 per cent and same-venue sales to decrease 6-12 per cent.

However, the retailer reaffirmed its overall revenue guidance of $4 million to $4.18 million, representing a decline of 1.3-5.6 per cent.

“Based upon what we know today, we believe our strong start to the year, improving foreign currency exchange rates, and actions we are taking to both reduce costs and mitigate the impact of the current tariff rates, will allow us to maintain our consolidated full year revenue and adjusted EBITDA guidance,” added Brewer.