Carlsbad – November 05, 2026 -- Callaway Golf Company (NYSE: CALY) raised its full-year 2026 net sales outlook to $2.065 billion-$2.078 billion and its Adjusted EBITDA outlook to $272 million-$280 million after third-quarter net sales and Adjusted EBITDA both beat expectations.
Gross margin gains offset a 5.6% sales decline
Net sales from continuing operations fell 5.6% to $436.9 million, which the company said was better than expected. Callaway had shifted its irons launch timing and cut lower-margin products to improve long-term profitability, and it had forecast lower second-half sales as a result. Foreign exchange headwinds in Asia also weighed on the quarter.
TravisMathew sales rose in the quarter. The company credited the launch of its Mini Spinner fairway woods and TRTL putters in Asia for the better-than-expected result.
GAAP gross margin rose about 1,210 basis points to 51.9%, and non-GAAP gross margin rose about 520 basis points to 45.0%. Callaway attributed the gains to select price increases, cost reductions and the rationalization of lower-margin business. GAAP gross margin also included roughly $31.8 million of non-recurring tariff refund benefits, which the non-GAAP figures exclude.
Adjusted EBITDA climbs 17.3% to $35.9 million
Adjusted EBITDA from continuing operations rose 17.3% to $35.9 million, driven mainly by the margin gains. Lower revenue and reduced dividend income partly offset them. GAAP operating expense increased 1.4% and non-GAAP operating expense rose 0.8%, which the company tied to cost management following the Topgolf transaction.
Net income from continuing operations was $48.1 million on a GAAP basis and $22.9 million on a non-GAAP basis.
Cash generation and buybacks continue
Year-to-date operating cash flow from continuing operations, excluding $44 million of tariff refunds, rose 45% to $228 million. Callaway has repurchased about 9 million shares, or $135 million, through September 2026. It has $70 million of authorization remaining.
As of September 30, the company held a net cash position, with $434 million in unrestricted cash and cash equivalents against $76 million in debt, including $26 million in financing leases. Inventory rose $5.4 million year over year to $536.2 million.
Fourth quarter still expected to decline
Callaway still expects fourth-quarter results to fall year over year. It cited the launch-timing shift, the rationalization of lower-margin business, investments in fitting, and reduced dividend income after it used cash to pay off more than $1.4 billion of debt in the first half of 2026. The company now expects full-year revenue to grow and full-year Adjusted EBITDA to improve significantly.
CEO Chip Brewer said the company is returning capital to shareholders while investing in long-term growth, including new 3D printing capabilities.