Topgolf Callaway Brands President Chip Brewer told Wall Street that the company is “still evaluating’’ the spin and the sale of the Topgolf division, which it announced this past fall.
“We continue to work towards a solution in the second half of this year,’’ Brewer said. “However, a lot has changed since we initially announced our intention to separate last September. As a result, if we spin to avoid RemainCo having too high a leverage, the capital structure we are now planning for Topgolf will be different than what we previously communicated.’’
“RemainCo’’ is Wall Street speak for the part of the parent company – in this case Callaway Golf – that continues to operate as it was before the separation.
“Having said this, in the ‘spin’’ scenario, we remain 100 percent committed to positioning RemainCo and Topgolf in strong financial positions, with manageable leverage ratios and promising futures,’’ Brewer said.
Topgolf Callaway Brand reported Topgolf’s Q1 2025 revenue decreased $29.1 million to $393.7 million versus Q1 2024, with a 12 percent decline in same venue sales offsetting revenue from new venues. Topgolf Q1 ‘25 earnings fell $14.8 million to a loss of $11.9 million.
“We continue to believe that separating Topgolf from our core business will create value for our shareholders,’’ Topgolf Callaway Brands CFO Brian Lynch told Wall Street analysts.. As a result, we are actively pursuing various alternatives to affect the separation, including a sale, a spin or other transaction.
“We are reassessing how much debt and cash each company would be capitalized with post separation to ensure that both companies have sufficient liquidity and are in a strong financial position in a spin scenario. In the case of the core business, this means having a clear path to be at approximately three times or less leverage in a reasonable amount of time. And in the case of Topgolf, this means having no more than modest funded debt leverage.’’