Is TaylorMade Still Struggling?

It's time for the annual discussion around "Is TaylorMade struggling and if so, why?" They aren't going to the PGA Show in 2019. I guess that's because they are owned by private equity and are just cutting unnecessary costs that don't bring an immediate return. According to a recent MGS article, a lot of the big OEMs don't feel that the PGA Show makes them much money, it's just a way to give back to the PGA.

So how and why is TaylorMade still struggling? They have the overwhelming majority of the biggest names in pro golf - Tiger, Rory, Day, DJ, Rahm. They make clubs that are about as good as anything else on the market. The M3/4, the 790s, and the Spider perform well and I would think are a sales success. They market their brand well. Yet from all accounts that I've seen, Callaway is killing them the last few years. Ping has what I think is the better selling driver. Callaway markets themselves more than TaylorMade and far more than Ping. Callaway has only one Tour player in Phil that is as popular as TaylorMade's big 5. Sergio is the only other one I could say is close if he continues to play well.

Is Callaway just a better marketer? Is TaylorMade just spending too much on a few Tour players that don't offset those sponsorship costs? Is TaylorMade failing to make as much money as they should off of Tiger because they aren't selling a Tiger-branded iron? Or are they not struggling, Callaway is just winning the last few years?

How can the company that makes the #1 driver in golf be struggling?

It's new management cutting the fluff and unnecessary overhead. Money saved is money earned.

How can the company that makes the #1 driver in golf be struggling?

 

It's new management cutting the fluff and unnecessary overhead. Money saved is money earned.

TaylorMade had the #1 driver in golf for years and lost what is thought to be up to $100 million a year. It can happen. I can't say for sure it is happening now, but the speculation is there.

Can you provide the data that shows "Callaway is killing them the last few years"?

Isn't TaylorMade a private company and to my knowledge we don't have up to date financials on them? So how can we know if they're struggling?

We know that Adidas sold TM to KPS Capital Partners for $425 million in May of 2017. https://golfweek.com/2017/05/10/adidas-sells-taylormade-golf-for-425-million-to-kps-capital-partners/

I think that Nike and Adidas both deciding that being in the golf equipment business isn't worth it, just speaks to the difficulty of turning a significant profit in that space. I don't think TM is struggling so much as it's simply not a big growth industry where anyone can realize any significant gains.

I just started playing TM irons so you can expect a sales increase

Can you provide the data that shows "Callaway is killing them the last few years"?

 

Isn't TaylorMade a private company and to my knowledge we don't have up to date financials on them? So how can we know if they're struggling?

 

We know that Adidas sold TM to KPS Capital Partners for $425 million in May of 2017. https://golfweek.com...pital-partners/

 

I think that Nike and Adidas both deciding that being in the golf equipment business isn't worth it, just speaks to the difficulty of turning a significant profit in that space. I don't think TM is struggling so much as it's simply not a big growth industry where anyone can realize any significant gains.

No, I don't know TaylorMade's numbers, but the rumors are there. That's why you start a thread on speculation.

It's time for the annual discussion around "Is TaylorMade struggling and if so, why?" They aren't going to the PGA Show in 2019. I guess that's because they are owned by private equity and are just cutting unnecessary costs that don't bring an immediate return. According to a recent MGS article, a lot of the big OEMs don't feel that the PGA Show makes them much money, it's just a way to give back to the PGA.

 

So how and why is TaylorMade still struggling? They have the overwhelming majority of the biggest names in pro golf - Tiger, Rory, Day, DJ, Rahm. They make clubs that are about as good as anything else on the market. The M3/4, the 790s, and the Spider perform well and I would think are a sales success. They market their brand well. Yet from all accounts that I've seen, Callaway is killing them the last few years. Ping has what I think is the better selling driver. Callaway markets themselves more than TaylorMade and far more than Ping. Callaway has only one Tour player in Phil that is as popular as TaylorMade's big 5. Sergio is the only other one I could say is close if he continues to play well.

 

Is Callaway just a better marketer? Is TaylorMade just spending too much on a few Tour players that don't offset those sponsorship costs? Is TaylorMade failing to make as much money as they should off of Tiger because they aren't selling a Tiger-branded iron? Or are they not struggling, Callaway is just winning the last few years?

Inventory control issues, failed release like the jetspeed. Changing from the 17/1700 low spin sldr to the current m lineup. They’ve had issues plus they were known for big sponsorships deals and also paying players to play their clubs. Sometimes things just don’t work out.

Callaway has been the #1 in several categories for several years. I don’t have access to the data but that type of info is shared amongst the industry on a quarterly basis iirc. They are great at marketing and for many have a great product.

Tour wins and players don’t always correlate to being dominant in sales. If it was TM, Ping, Mizuno and Titleist would all be in front of Callaway.

WRX answer: Too many product release cycles. They compete against their own product.

Too many big name pros to pay and support on tour.

Without Adidas, no soft goods to offset hard goods losses.

TaylorMade doesn't have the release cycles like they used to do. They trimmed their Tour staff considerably. But has their financials changed?

TaylorMade doesn't have the release cycles like they used to do. They trimmed their Tour staff considerably. But has their financial changed?

Since they are owned by a private equity firm now it will be impossible to get numbers.

However, if you look at the SEC filings for Callaway and Titleist you might be able to glean some market share numbers based on what the others report.

Don't really know and don't really care. What I do know is I'm liking much of what TM is doing these days with their irons, wedges and putters. In fact this year is the first time I've ever played their clubs. Still not a fan of their woods and balls though.

Based on anecdotal evidence only I'd say TM is still struggling. I see a lot more Rogues than I do M3/M4. My golf clients tell me beyond the P790, their iron sets and wedges aren't selling. We have no insight to their financials but not going to the 2019 PGA Show indicates a cost cutting initiative that usually isn't done unless profits are down. I fully understand that given the different release cycles and ability to promote over the web the PGA Show isn't as critical as it once was to manufacturers it's still going to be seen as a negative that TM isn't there this year.

These trades shows tend to be more about who isn't there than who is when it comes to the media, so with TM not being there it can be an indicator of financial problems for them or they will be viewed as a trend setter that other manufacturers will follow in coming years which could signal the beginning of the end for the PGA Show.

Taylor Made is an interesting one, I see a lot of M1's, 2's, 3's and 4's out and about playing and a decent amount of Spider Tour putters but beyond that, there are next to no Taylor Made irons or wedges that I come across. It may just be a local thing but Callaway and PING are the big guys in our local area.

I'm sure their financials are horribly upright.

Based on anecdotal evidence only I'd say TM is still struggling. I see a lot more Rogues than I do M3/M4. My golf clients tell me beyond the P790, their iron sets and wedges aren't selling. We have no insight to their financials but not going to the 2019 PGA Show indicates a cost cutting initiative that usually isn't done unless profits are down. I fully understand that given the different release cycles and ability to promote over the web the PGA Show isn't as critical as it once was to manufacturers it's still going to be seen as a negative that TM isn't there this year.

 

These trades shows tend to be more about who isn't there than who is when it comes to the media, so with TM not being there it can be an indicator of financial problems for them or they will be viewed as a trend setter that other manufacturers will follow in coming years which could signal the beginning of the end for the PGA Show.

They aren’t going to the pga show because they feel the money they would spend there can be better used to invest in the pga and programs that will have a bigger effect than going to the show. MGS has a great article on the pga show and it addresses TaylorMade not bring there as well as info from sources on the effectiveness of the show and companies bring there or not

The natural cycle for a brand name sporting goods company involves a grass roots start, product loyalty and growth, a healthy life of growing and meeting your customers needs, getting too big, losing money, reorganizing once or twice to see if you can regain the magic, eventually the name brand gets sold and plastered all over whole club sets at K Mart. Private equity at Taylor Made is trying to figure out if it's worth running the company or selling the name.

Based on anecdotal evidence only I'd say TM is still struggling. I see a lot more Rogues than I do M3/M4. My golf clients tell me beyond the P790, their iron sets and wedges aren't selling. We have no insight to their financials but not going to the 2019 PGA Show indicates a cost cutting initiative that usually isn't done unless profits are down. I fully understand that given the different release cycles and ability to promote over the web the PGA Show isn't as critical as it once was to manufacturers it's still going to be seen as a negative that TM isn't there this year.

 

These trades shows tend to be more about who isn't there than who is when it comes to the media, so with TM not being there it can be an indicator of financial problems for them or they will be viewed as a trend setter that other manufacturers will follow in coming years which could signal the beginning of the end for the PGA Show.

 

They aren't going to the pga show because they feel the money they would spend there can be better used to invest in the pga and programs that will have a bigger effect than going to the show. MGS has a great article on the pga show and it addresses TaylorMade not bring there as well as info from sources on the effectiveness of the show and companies bring there or not

Despite the spin, it still comes down to money and TM has opted to not spend it attending the show which is a red flag.

It's no secret that many tradeshows have lost their appeal for companies. They were typically viewed as a necessity that was also a reward for employees, 3-4 days in a great location, free meals, nice hotel, lots of drinking and extracurricular activities under the guise of doing business. Today, as highlighted by the MGS article, the industry has changed to the point that attending the show isn't as critical to the business as it once was.

I could be 100% wrong but I read this as TM is hurting financially and I'm certain that others in the industry will view it the same way.

Based on anecdotal evidence only I'd say TM is still struggling. I see a lot more Rogues than I do M3/M4. My golf clients tell me beyond the P790, their iron sets and wedges aren't selling. We have no insight to their financials but not going to the 2019 PGA Show indicates a cost cutting initiative that usually isn't done unless profits are down. I fully understand that given the different release cycles and ability to promote over the web the PGA Show isn't as critical as it once was to manufacturers it's still going to be seen as a negative that TM isn't there this year.

 

These trades shows tend to be more about who isn't there than who is when it comes to the media, so with TM not being there it can be an indicator of financial problems for them or they will be viewed as a trend setter that other manufacturers will follow in coming years which could signal the beginning of the end for the PGA Show.

 

They aren't going to the pga show because they feel the money they would spend there can be better used to invest in the pga and programs that will have a bigger effect than going to the show. MGS has a great article on the pga show and it addresses TaylorMade not bring there as well as info from sources on the effectiveness of the show and companies bring there or not

 

Despite the spin, it still comes down to money and TM has opted to not spend it attending the show which is a red flag.

 

It's no secret that many tradeshows have lost their appeal for companies. They were typically viewed as a necessity that was also a reward for employees, 3-4 days in a great location, free meals, nice hotel, lots of drinking and extracurricular activities under the guise of doing business. Today, as highlighted by the MGS article, the industry has changed to the point that attending the show isn't as critical to the business as it once was.

 

I could be 100% wrong but I read this as TM is hurting financially and I'm certain that others in the industry will view it the same way.

Then not going isn’t a bad sign they are still spending money just in a different way. Imo it’s mire of a sign the pga show as it stands is in bad shape and Tm doesn’t see the value in it right now. As the mgs article pointed out other big names have missed it for years in the past.

TM probably still has some issues but not going to show isn’t as result of it

Based on anecdotal evidence only I'd say TM is still struggling. I see a lot more Rogues than I do M3/M4. My golf clients tell me beyond the P790, their iron sets and wedges aren't selling. We have no insight to their financials but not going to the 2019 PGA Show indicates a cost cutting initiative that usually isn't done unless profits are down. I fully understand that given the different release cycles and ability to promote over the web the PGA Show isn't as critical as it once was to manufacturers it's still going to be seen as a negative that TM isn't there this year.

 

These trades shows tend to be more about who isn't there than who is when it comes to the media, so with TM not being there it can be an indicator of financial problems for them or they will be viewed as a trend setter that other manufacturers will follow in coming years which could signal the beginning of the end for the PGA Show.

 

They aren't going to the pga show because they feel the money they would spend there can be better used to invest in the pga and programs that will have a bigger effect than going to the show. MGS has a great article on the pga show and it addresses TaylorMade not bring there as well as info from sources on the effectiveness of the show and companies bring there or not

 

Despite the spin, it still comes down to money and TM has opted to not spend it attending the show which is a red flag.

 

It's no secret that many tradeshows have lost their appeal for companies. They were typically viewed as a necessity that was also a reward for employees, 3-4 days in a great location, free meals, nice hotel, lots of drinking and extracurricular activities under the guise of doing business. Today, as highlighted by the MGS article, the industry has changed to the point that attending the show isn't as critical to the business as it once was.

 

I could be 100% wrong but I read this as TM is hurting financially and I'm certain that others in the industry will view it the same way.

 

Then not going isn't a bad sign they are still spending money just in a different way. Imo it's mire of a sign the pga show as it stands is in bad shape and Tm doesn't see the value in it right now. As the mgs article pointed out other big names have missed it for years in the past.

 

TM probably still has some issues but not going to show isn't as result of it

They haven't committed the money or the amount, just stated they would, which means they reserve the right to change their mind after the show is over and all the hype about their lack of attendance dies down.

A big part of the answer is we can't really know for sure. As you indicate they're privately owned now and no longer part of a public company (Adidas) so we don't have any specific financial details anymore. There are a lot of positive signs as you point out, they're still the clear leader in driver sales and they've really made some headway in other club areas like irons (P790 specifically, but driving irons like the UDI and GAPR as well) and perhaps even wedges. Their TP5 balls have certainly improved their place in the market but I think they're still a decent distance behind Callaway at #2 and certainly Titleist in ball sales. So they're definitely improving in those areas but we also know that hard goods like equipment have relatively low margins in the industry (hence Nike exiting that segment of the market).

So they do well in lower margin categories we can reasonably assume, and they've made a little headway in the more profit-friendly ball segment but there's a caveat to that too. TM isn't fully integrated when it comes to ball production. Titleist and Callaway both notably own their own production facilities for their balls and produce them themselves (Bridgestone as well). TM (I believe) still outsources their ball production through Korean factories. I'm not positive the degree of the effect that has on their margins, but I'd imagine that they've gotta be slightly lower than the companies that manage the entire means of production themselves. When it comes to softer goods TM just doesn't have a huge presence. They don't have any part in a clothing line or shoes since being sold by Adidas and those are the real money makers (a lot of ground has to be lost there to Callaway which has both its own clothing line as well as owning Travis Mathew and Titleist/Acushnet which owns Footjoy). They probably do OK in bags but I doubt it moves the needle a ton.

So, I think saying they're "struggling" is maybe not the right verbage. I certainly think they're profitable now and making some headway but if you're comparing them to Callaway and Titleist/Acushnet then I don't think they've got nearly as strong a place in the industry just based on how they're making their money and the commanding lead the other two have in more profitable areas.

TaylorMade has skipped the PGA Show before under Adidas ownership a few years ago apparently forgotten by many. Their P790 irons have been very successful in iron sales. Callaway has sold more drivers the past two years. TM has increased in ball and putter sales. The Hi Toe wedges will be an entire line in 2019 so that will be a test to see. They have cut fringe endorsements to be able to pay their big names. The only new iron release for the near term is the P760s. Look for something new in the summer as an auxiliary release after the M5/M6 "preseason" release focus this winter.

I think there clubs are terrible haven’t liked a thing from TM in a couple of years now. YMMV

A big part of the answer is we can't really know for sure. As you indicate they're privately owned now and no longer part of a public company (Adidas) so we don't have any specific financial details anymore. There are a lot of positive signs as you point out, they're still the clear leader in driver sales and they've really made some headway in other club areas like irons (P790 specifically, but driving irons like the UDI and GAPR as well) and perhaps even wedges. Their TP5 balls have certainly improved their place in the market but I think they're still a decent distance behind Callaway at #2 and certainly Titleist in ball sales. So they're definitely improving in those areas but we also know that hard goods like equipment have relatively low margins in the industry (hence Nike exiting that segment of the market).

 

So they do well in lower margin categories we can reasonably assume, and they've made a little headway in the more profit-friendly ball segment but there's a caveat to that too. TM isn't fully integrated when it comes to ball production. Titleist and Callaway both notably own their own production facilities for their balls and produce them themselves (Bridgestone as well). TM (I believe) still outsources their ball production through Korean factories. I'm not positive the degree of the effect that has on their margins, but I'd imagine that they've gotta be slightly lower than the companies that manage the entire means of production themselves. When it comes to softer goods TM just doesn't have a huge presence. They don't have any part in a clothing line or shoes since being sold by Adidas and those are the real money makers (a lot of ground has to be lost there to Callaway which has both its own clothing line as well as owning Travis Mathew and Titleist/Acushnet which owns Footjoy). They probably do OK in bags but I doubt it moves the needle a ton.

 

So, I think saying they're "struggling" is maybe not the right verbage. I certainly think they're profitable now and making some headway but if you're comparing them to Callaway and Titleist/Acushnet then I don't think they've got nearly as strong a place in the industry just based on how they're making their money and the commanding lead the other two have in more profitable areas.

TaylorMade has a newer ball (2013/2014) production plant in South Carolina. They produce their urethane balls there. They had an older ball facility in South Carolina after they purchased Maxfli and their ball patent portfolio in the early 2000's.

Other OEMs have skipped the PGA Equipment show in the past. Most notable was Titleist. They skipped it from 2003-2008. Ping has skipped the show in the past. As have Bridgestone, Mizuno and Nike (well before they stopped making equipment). TM skipped the show from 2008-2010.

Don't really know and don't really care. What I do know is I'm liking much of what TM is doing these days with their irons, wedges and putters. In fact this year is the first time I've ever played their clubs. Still not a fan of their woods and balls though.

Same here, I haven’t gamed a TM irons in decades until this year when the P790’s kicked my MP18 MMC’s out of the bag.

It’s because of how private equity works. You buy companies with their own credit. That $425 million was borrowed and has to be paid back *by taylormade itself*. Read “barbarians at the gate”, a great book about the PE purchase of Nabisco.

Basically PE firms look for companies that can borrow enough money to be purchased for

The amount they themselves make. So if TM makes $200 a year, and the debt service on the amount required to buy TM is $200/year, buying TM is essentially free. In order to free up cash to pay the debt used to acquire TM, they cut things like PGA shows.

It has nothing to do with sales or anything else. It’s the nature of PE. Once the debt is gone (or re-fi’d, or you’ve sold) the new owner or you repeal the cuts and try to grow.

TM has to now pay a $425 million nut it’s never had to pay before.

Not easy.

I heard the TM R&D department requested a machine that cost $20 million for making the new M5 and M6 faces and this is why they pulled out of the PGA merchandise show this year.

Can you provide the data that shows "Callaway is killing them the last few years"?

 

Isn't TaylorMade a private company and to my knowledge we don't have up to date financials on them? So how can we know if they're struggling?

 

We know that Adidas sold TM to KPS Capital Partners for $425 million in May of 2017. https://golfweek.com...pital-partners/

 

I think that Nike and Adidas both deciding that being in the golf equipment business isn't worth it, just speaks to the difficulty of turning a significant profit in that space. I don't think TM is struggling so much as it's simply not a big growth industry where anyone can realize any significant gains.

 

No, I don't know TaylorMade's numbers, but the rumors are there. That's why you start a thread on speculation.

"Yet from all accounts that I've seen, Callaway is killing them the last few years"

I was asking if you could cite those "accounts" that you've "seen". But if you just mean rumours you heard then nevermind.

I think there clubs are terrible haven't liked a thing from TM in a couple of years now. YMMV

I concur. I don't get all the love. They do absolutely nothing for me, both visually and in usage. But hey, different strokes for different folks. Some people don't like Wilson's stuff, and I totally love their stuff.

Can you provide the data that shows "Callaway is killing them the last few years"?

 

Isn't TaylorMade a private company and to my knowledge we don't have up to date financials on them? So how can we know if they're struggling?

 

We know that Adidas sold TM to KPS Capital Partners for $425 million in May of 2017. https://golfweek.com...pital-partners/

 

I think that Nike and Adidas both deciding that being in the golf equipment business isn't worth it, just speaks to the difficulty of turning a significant profit in that space. I don't think TM is struggling so much as it's simply not a big growth industry where anyone can realize any significant gains.

 

No, I don't know TaylorMade's numbers, but the rumors are there. That's why you start a thread on speculation.

 

"Yet from all accounts that I've seen, Callaway is killing them the last few years"

 

I was asking if you could cite those "accounts" that you've "seen". But if you just mean rumours you heard then nevermind.

The MGS article said that

Can you provide the data that shows "Callaway is killing them the last few years"?

 

Isn't TaylorMade a private company and to my knowledge we don't have up to date financials on them? So how can we know if they're struggling?

 

We know that Adidas sold TM to KPS Capital Partners for $425 million in May of 2017. https://golfweek.com...pital-partners/

 

I think that Nike and Adidas both deciding that being in the golf equipment business isn't worth it, just speaks to the difficulty of turning a significant profit in that space. I don't think TM is struggling so much as it's simply not a big growth industry where anyone can realize any significant gains.

 

No, I don't know TaylorMade's numbers, but the rumors are there. That's why you start a thread on speculation.

 

"Yet from all accounts that I've seen, Callaway is killing them the last few years"

 

I was asking if you could cite those "accounts" that you've "seen". But if you just mean rumours you heard then nevermind.

Follow them on social media you will see who’s leading what when the numbers come out. Companies like to brag when they hit #1 in a category especially Callaway.