Callaway Raises 2026 Sales and EBITDA Outlook After Third Quarter

The Tip Desk · November 6, 2026 · 4 min read

Third-quarter net sales were $436.9 million and Adjusted EBITDA $35.9 million, and the company lifted full-year Adjusted EBITDA guidance to $272 million–$280 million.

Callaway Golf Company (CALY) raised its full-year 2026 net sales outlook to $2.065 billion–$2.078 billion and Adjusted EBITDA outlook to $272 million–$280 million after third-quarter results that the company said exceeded expectations.

The premium golf equipment, gear and apparel company now expects revenue to grow for the full year and a significant improvement in full-year Adjusted EBITDA, after lifting both ranges in the first quarter to $2.015 billion–$2.070 billion and $211 million–$233 million, then to $2.045 billion–$2.070 billion and $246 million–$260 million in the second quarter.

Net sales from continuing operations decreased 5.6% to $436.9 million in the three months ended September 30, 2026, reversing the 2.0% year-over-year increase to $612.2 million in the second quarter. The company said the decline was better than expected after shifting irons launch timing and rationalizing lower-margin products, with TravisMathew sales up and Mini Spinner fairway woods and TRTL putters in Asia partially offsetting the drop. Foreign-exchange headwinds in Asia also weighed on sales.

GAAP gross margin rose 1,210 basis points year-over-year to 51.9% and non-GAAP gross margin rose 520 basis points to 45.0%, a larger GAAP expansion than the 620 basis-point GAAP and 460 basis-point non-GAAP year-over-year increases reported in the second quarter. The company attributed the lift to price increases, cost reductions and rationalizing lower-margin business. GAAP gross margin also benefited from about $31.8 million of non-recurring tariff refunds, which were excluded from non-GAAP results.

Adjusted EBITDA from continuing operations increased 17.3% year-over-year to $35.9 million, slowing from the 35.8% year-over-year increase to $124.9 million in the second quarter. The company said the increase was driven primarily by improved gross margins, partially offset by lower revenue and a decrease in dividend income.

Golf Equipment net sales fell 7.9% year-over-year to $281.5 million, after a 4.5% increase in the second quarter that the company said was driven by strength across clubs and balls. Apparel, Gear and Other net sales were $155.4 million, down 1.1%.

Golf Equipment segment operating income rose 16.7% to $27.2 million, with segment operating margin up 210 basis points to 9.7%. Apparel, Gear and Other operating income rose 42.3% to $19.5 million, with margin up 380 basis points to 12.5%. Total segment operating income was $46.7 million, up 26.2%, and total segment operating margin rose 270 basis points to 10.7%.

GAAP net income from continuing operations was $48.1 million, or $0.26 a share diluted, versus a $4.1 million loss, or $(0.02) a share, a year earlier. Non-GAAP net income from continuing operations was $22.9 million, or $0.12 a share, versus an $11.1 million loss, or $(0.06) a share. GAAP results included $33.5 million of IEEPA tariff refunds, including $1.7 million of related interest income.

Fourth-quarter 2026 net sales are estimated at $328 million–$341 million versus $368 million reported in the fourth quarter of 2025, and Adjusted EBITDA is estimated at a loss of $53 million to $45 million versus a $25 million loss a year earlier. The company said fourth-quarter results are still expected to be down year over year due to the launch-timing shift, rationalization of lower-margin business, fitting investments, and less dividend income after using cash to pay off more than $1.4 billion of debt in the first half of 2026.

Year-to-date through September 2026 the company repurchased $135 million of common shares, about 9 million shares, leaving $70 million of remaining repurchase authority. Inventory was $536.2 million, up $5.4 million year-over-year. The company was in a net cash position with $76 million of debt outstanding and $434 million of unrestricted cash.