Shares of Topgolf Callaway Brands Corp. on Thursday suffered their worst percentage drop in more than three years, after the golf-equipment and venue giant a day earlier cut its full-year outlook and analyst sentiment on the stock soured. But analysts say that enthusiasm for golfing, which surged after pandemic lockdowns hit in 2020, isn’t the main issue for Topgolf Callaway
Rather, they say, the difficulties lie with its sports-entertainment chain Topgolf, where higher prices for basics have weighed on demand and interest among corporate event-planners.
Stephens analyst Daniel Imbro, who was among the analysts to downgrade the shares of the company after it reported quarterly results on Wednesday, told MarketWatch that golf-equipment demand was still healthy, and that the sport was driven more far more by enthusiasts than hobbyists. “Coming out of COVID, we definitely lost some of the transitory golfers,” he said. “But we gained more dedicated players.” “As some portion of the people who picked up the game during COVID became more enthusiastic players, things that we tracked, like people keeping handicaps, number of lessons being given, we saw those metrics going higher, even as rounds played normalized last year,” he continued. Topgolf Callaway sells golf equipment under the Callaway brand and runs the sports-entertainment chain Topgolf, which Callaway merged with in 2021. Driving ranges at Topgolf have dartboard-like targets that players can aim toward and are outfitted with …