HEARD ON THE TEE

PAST SINS CONTINUE TO BE FELT:

Fri, 30 Jul 2010 15:34:00 -0700

It’s difficult to fully grasp the retail market dynamics for equipment sales, which in turn influences manufacturer sales. In the early going of 2010, the signs at the off course level haven’t offered a lot to be inspired about. According to Marty Hanaka, CEO at Golfsmith, his business, like a lot of others, is fighting a tough trend. “If you went year-to-date (the latest research accounts up to May) Golf Datatech, which is a third-party, we believe that if you look at every category, added them up, they are down over 3% in dollars and down in units as well,” he said, referring to the overall state of equipment sales. “The big losers through May was woods. They were down 8% year-to-date through May and we know in June they dropped 9%. That is the big loser,” he continued. “And that is, as we say in the business, as go woods so does your business, because it is so big and it’s a purchase that people make every couple of years. The recovery hasn't happened in the industry the way we had all hoped.” Hanaka also stated that wood sales were off in April by 11% in dollars, according to Datatech research.
The reason for the weaker sales to date in 2010, can be traced back to activity from last year. “Last year if you bought a driver from any one of the big brands, TaylorMade, Callaway, Nike, you would get a free hybrid, free fairway. That was a big value and that held us together and the vendors fully supported it in the backend, so we all made full margins on it,” explained the CEO. “From their viewpoint it wasn't affordable.” Therefore last year’s promotions, especially in the woods category are still being felt indirectly in 2010.
Meanwhile, the world hasn’t improved from a year ago when the deals being made were trying to overcome the headwinds provided by a lackluster economy. California, an area where 15 of Golfsmith’s 77 stores are located has a little more on its plate to overcome in 2010. “You’ve got an unemployment rate there that is over 12%, 12.2% I think in Orange County. You’ve got markets where there it is 14% unemployment,” said Hanaka in explaining the challenges the Golden State is experiencing that is also being felt at retail. “You’ve got this whole foreclosure and bankruptcy thing going on. So consumer confidence is probably one of the weakest areas,” he continued. “The third thing, I think is that California has rounds played that are down substantially. This is a big market. It’s a year round market.”

GREAT EXPECTATIONS:

Wed, 28 Jul 2010 15:32:03 -0700

Callaway Golf was looking for a rebound to its business in 2010. It said as much at the start of the year, when CEO George Fellows stated, “As anticipated, the recovery for worldwide economy and particularly the golf industry is underway with some momentum evident in both – for both. While elements of the recovery are still somewhat mixed, the general trends are sufficiently positive for us to maintain our cautious optimism for the year.” Those words of reinforcement came after the company reported its 2010 first quarter operating results. “Reception of our 2010 new lineup continues to be quite positive. And just to remind everyone, we were the recipients of 15 medals, 10 of which were gold in Golf Digest's review of the 2010 new products; those were more than any other manufacturer. The trade was equally positive about our lineup pre-booking at the expected levels, which we believe is quite a vote of confidence in an uncertain environment,” he added.
That was then and this is now. Callaway pre-announced in early June its expected second quarter financial performance. The company, by no surprise, delivered in the range it shared back on June 14th. For the record, Callaway reported second quarter sales of $304 million, an increase of 1% compared to a year ago. It earned a profit of $8.8 million for the reporting period, up $2.4 million from a year ago.
A brief look at the breakdown in sales for the business shows that Callaway’s metal woods business continues on a downward spiral. Sales for the quarter were $63.3 million, down nearly $12.7 million or 17% from a year ago. Iron sales were $71.48 million, off $733,000 from last year. Callaway’s putter sales were $33.5 million, up $7 million from last year or 27%. Ball sales were $58 million for the reporting period, down 242,000 from a year ago. The accessories category, an area the company has generated significant sales under the Fellows administration, came in at $77.3 million, up almost $8 million or 11% from 2009.
"Global economic conditions and the golf industry have recovered more slowly than our original expectations coming into 2010," commented George Fellows, President and CEO. "Consumer spending remains constrained by high unemployment, modest income growth, lower housing wealth and tight credit. These constraints, together with unfavorable weather conditions in many key markets for a significant portion of 2010, have resulted in an overall decline in sales in the golf industry for the year,” stated Fellows in a company press release. Essentially saying that these factors are beyond anyone’s control.
"While the golf industry will recover, given recent increased uncertainty regarding retailer and consumer spending in the back half of the year, it does not appear that the industry will fully recover during 2010," continued Fellows. "We are therefore focused on the controllable portions of our business, including tight management of discretionary spending, investment in emerging markets and other key growth initiatives to drive long-term shareholder value, and improvements in our operations such as the restructuring of our global operations announced yesterday. These actions, together with the strength of our brands, will allow us to maximize results in the current environment and prepare us to take advantage of a better market once global conditions improve."
The company announcement, late yesterday, that it is relocating its club assembly away from its headquarters in southern California to Mexico and its distribution center to Dallas, TX is clearly a cost measure intended to bolster a bottom line that is under pressure. The reorg of manufacturing and distribution centers is also affected in Toronto, Canada, by the decision.
"While we expect that our overall financial results will be better than last year, the unusual uncertainty caused by the current macroeconomic and market conditions make it impossible to forecast retailer and consumer demand for golf products with any reliability," commented Brad Holiday, Chief Financial Officer of the Company. "We do expect that our full year gross margins will be improved compared to last year and that our full year operating expenses will be approximately flat compared to last year, even after taking into account the restoration of employee compensation and benefits that were temporarily suspended in 2009. Because of the lack of visibility into sales, however, we are not providing specific financial guidance for the balance of the year."
For more on this be sure to read the August 2nd issue of the Web Street Golf Report. If you don’t already subscribe to it, you can make arrangements by clicking on the BUY NOW button at http://www.golfbiz.net.

YOU HAVE OUR WORD:

Wed, 28 Jul 2010 15:28:41 -0700

Golfsmith (GOLF: NASDAQ) is making a guarantee to golfers of all shapes, sizes and skill level. It believes it can find an extra 15 yards off the tee for anyone who is willing to take it up on its offer.
Golfsmith’s “15 More Yards Guarantee” comes on the heels of its “Custom Fit Play Better Guarantee” launched earlier this year where the company guarantees golfers will play better, no questions asked, if they get custom fit, or they can bring their clubs back for full in-store credit towards other clubs or anything in the store. The Custom Fit Play Better Guarantee has been so well received by customers that Golfsmith has now expanded it to drivers. “Golfsmith’s custom fit sales are up significantly since we launched our Custom Fit Play Better Guarantee,” said Marty Hanaka, Golfsmith President and CEO. “Our core purpose is to inspire people to play better and our customers are responding very well to these new programs.”
Golfsmith’s “15 More Yards Guarantee” launched this month and is available for fittings in all Golfsmith stores and online at golfsmith.com. “Based on our years of experience custom fitting, we believe that a majority of golfers play clubs that don't fit their swing characteristics, hurting their performance,” said Sean Toulon, EVP of Product Creation, TaylorMade Golf Company. “Thanks to advanced fitting technologies we know that golfers can increase their distance and accuracy simply by playing equipment that is properly fit.”

FOR PETE’S SAKE:

Mon, 26 Jul 2010 15:23:30 -0700

South African, Louis Oosthuizen by virtue of his Open Championship victory has made a big name for himself. While his game impressed everyone at St. Andrews, many are still getting to know more about the man some call Shrek.
While the memories of the Open Championship revolve around its victor, someone else had quite a remarkable performance. Pete Cowen’s name may not be as well known as Louis Oosthuizen, but the two are linked together. Cowen, a PGA Master Professional is becoming a hot commodity. The 1st, 2nd and 3rd placed players at Open Championship had one thing in common and it wasn’t their clubs, nor their sponsors, but rather their coach. You guessed it, Pete Cowen. He works with Oosthuizen, Lee Westwood and Henrik Stenson and 2010 is turning into a year to remember for him.
Starting the year as Europe’s top coach (with more winners on the European Tour than anyone else) it seems that, 2010 couldn’t get much better after a second place for Lee Westwood at the Masters, and a US Open win for Graeme McDowell at Pebble Beach. It is not clear whether this is the first time that anyone has coached the top three players at a Major, but in any event it is a notable achievement and serves only to cement Cowen’s position as the top golf coach in Europe. His golf coaching philosophy is called ‘The Pyramid of Learning’. It starts by building ‘solid foundations’ (aim, stance, posture, grip, and body position) and then provides a progressive journey through the entire golf swing covering ‘dynamic movement’ (balance, body action, arm swing, hand action, path and plane) through to ‘controlling power’ (hand/eye coordination, speed and pressure, angle of attack) and ‘attitude’. This coaching philosophy has worked for European Tour winners, Ryder Cup stars and now back-to-back Major champions.
To celebrate this historic series of victories, Dizzy Heights, the official distributor of Pete Cowen DVDs has announced that they are now available in NTSC format for distribution in the USA. A discount has been made available to readers of the Daily Pulse who buy both DVDs or for orders over £25. Simply use the coupon code TMACGOLF upon check out.
To acquaint you with some of Cowen’s drills that he teaches in his DVD, The Pyramid of Learning, click on the images below. The Spiral Staircase Drill is said to be used daily by many of his top players including Henrik Stenson, along with the Axe Drill.

SPOT ON:

Tue, 20 Jul 2010 14:25:34 -0700

Its possible that many golf fans who watched Louis Oosthuizen en route to becoming the 2010 Open Champion, missed a spot in his remarkable performance. Oosthuizen put a red dot on his glove between the thumb and index finger that held a special message to only him.
“I had a chat with Dr. Carl Morris about two weeks ago, and I'd always wander off badly and struggle to get back into the moment. That helped me quite a lot, just looking down at it and just remembering what we sat down and what we’re saying and things like that. Just getting me to focus,” he explained.
You know, I'm very happy the way I did it the last nine holes. Normally when I've got that lead, or a lead like that (for the last nine holes), I'll just, when I get the club I'll hit it and get it over with. But I took my time, focused on the shot, didn't try anything funny, and it just helped me quite a bit. I did it beautifully.”
Could this be a trend in the making not only for recreational players, but glove manufacturers???

IT’S A DRY HEAT:

Mon, 19 Jul 2010 14:21:46 -0700

Ping is readying itself for its annual sales meetings and received a nice boost from none other than St. Andrews. Louis Oosthuizen used something old (at least it can considered that in the accelerated product cycle world in golf) and something new as he came out on top at the Open Championship yesterday. The South African’s driver of choice was the Rapture V2 driver, which was first announced nearly two years ago.
On the other end of the equation Oosthuizen validated the company’s new S56 irons and Tour-S Rustique wedges. The products have been leaked through the Internet, but not yet formally introduced to the sales force. Shrek, as his friends call him, led the field in driving accuracy and tied for fourth in driving distance (319.38 yards compared to the field’s average of 302.68 yards). His new irons and wedges helped him to a tie for eighth in greens in regulation.
While most of not all of the attention is focused on Oosthuizen, another Ping endorser, Lee Westwood finished in second place with a full bag of Ping products. Keep in mind that the company’s G15 driver has enjoyed a strong reception at retail as it’s been the #1 driver in sales for three months straight.
While the heat of summer is being felt throughout the country, the Phoenix, AZ-based Company is doing its best to add to the global warming effect. It wouldn’t be a fair representation to suggest it has found lightening in a bottle, but there is no denying Ping has been as hot as firecracker on the 4th of July lately.

POWERFUL WORDS BACKED BY SINCERITY:

Wed, 14 Jul 2010 14:36:44 -0700

Unless you have been there, can you understand the fascination St. Andrews provides. Absolute icons of the game throughout time have gushed over its very existence. Consider the following statements and ask yourself whether any other location has ever elicited such voluntary third party testimonials...

“If I had ever been sat down and told I was to play there and nowhere else for the rest of my life, I should have chosen the Old Course at St Andrews.” Bobby Jones

“The more I studied the Old Course, the more I loved it, and the more I loved it, the more I studied it, so I came to feel that it was for me the most favorable meeting ground possible for an important contest.” Bobby Jones

“I wish that every man who plays golf could play St Andrews once.” Gene Sarazen

“If a golfer is going to be remembered, he must win the title at St Andrews. At last, it is my greatest dream come true.” Jack Nicklaus

“Victory anywhere is always sweet, but to win at St Andrews is so special it rises above everything else.” Seve Ballesteros

“It will always be the greatest because nowhere else is there the turf that you have here.” Peter Thomson

“To win at St Andrews required a complete golf game and of course, some good fortune.” John Daly

“It is the dream of every golfer to play here – and play well.” Bernard Gallacher

“It’s always very exciting to win here at St Andrews – it is the arena of golf and it is a magnificent golf course.” Miguel Angel Jiminez

“One day I’II be able to tell my kids and my grandchildren about what happened to me at the Old Course. Without a doubt, I like it best of all the Open venues. It’s my favorite course in the world.” Tiger Woods

“To win at St Andrews is the ultimate.” Tiger Woods

“This is the origin of the game. Golf in its purest form, and it’s still played that way on a course seemingly untouched by time.” Arnold Palmer

“My favorite course is St Andrews, because it is so different; and with all the history, tradition and atmosphere there’s just no place like it.” Retief Goosen

“If I could play one course for the rest of my life it would be St Andrews. Every day it’s a different course, depending on the conditions. You never have the same shot twice.” Stewart Cink

“To win there would be the absolute best thing in golf. I went there to play and just loved the town and the golf. It was like a journey to Mecca for me.” Helen Alfredsson

“When I come back to St Andrews, I keep thinking it is my favorite course of them all, I have so many nice memories of the place.” Fred Couples

“The way the wind changes, it’s a different course every time. I think 17 is a great hard hole, but 18 is one of the best holes I’ve ever seen. You just can’t do anything wrong on 18; you’ve got to birdie it every time. Only you can’t.” Pete Dye

“It gives me goose-bumps just thinking about it” Janice Moodie

“Some people love St Andrews as a monument. I love it as a golf course. With man-made courses, someone designed the best way to play a hole. At St Andrews you figure that out yourself.” Tom Doak

“I’m a big fan of St Andrews. The hairs on the back of my neck still stand up, especially when I stand on the 1st and 18th tees. The Old Course never plays the same twice.” Paul Casey

“St Andrews is where the game was really founded, and a course that has withstood the test of time amazingly; it’s incredible to play, knowing all that’s taken place there.” Phil Mickelson

“The home of golf, St Andrews is a sentimental favorite. It’s got those huge greens and a wonderful atmosphere. It was the world’s first golf course and there is just a reverence about the place that hits you as soon as you get there.” Tony Jacklin

“The 18th tee at St Andrews – just the best setting in golf.” Mark O’Meara

“All the great players have walked those fairways and a lot of people trek from all over the world just to play that golf course. It’s like a pilgrimage, and it will be my honour to defend the title on it.” Todd Hamilton

“The 16th at St Andrews is my favorite. No other hole I’ve seen matches its strategic integrity.” Geoff Ogilvy

“St Andrews, to me, is everything you would want in the game. It’s got history, tradition, good golf and great atmosphere.” Jack Nicklaus

“I love St Andrews. I love making history and this is going to be with me for the rest of my life.” Lorena Ochoa, Ricoh Women’s Open champion 2007

“For any player to play in an Open Championship at St Andrews is huge.” Martin Kaymer
“It’s a course you can never really play enough to learn what it’s about... I really love it.” Paula Creamer

“A win at St Andrews is something every player would like to have on their CV before they hang up their clubs...” Ross Fisher

“The Open at St Andrews will, as always, be terrific. The 2000 Open was my first one, so St Andrews will always be the most special of Open venues for me. I am absolutely buzzing to get back there...the aura surrounding the town of St Andrews is second to none.” Ian Poulter
“It’s the most important course we play.” Tom Watson

“I am delighted to have had the opportunity to play the Old Course, the Home of Golf.” Ryo Ishikawa

“If I were to win an Open Championship at St Andrews that has a special value because it’s the Home of Golf.” Paul Casey

‘I’ve always loved St Andrews. I still think the Old Course is the most fascinating place to play there are just a million ways to get round. In that respect, there is nowhere else like it.’ Ben Crenshaw