Forex Reduces 2009
1.Callaway Reports Year End Results, Reducing 2009 EPS Estimate
Callaway reported their year end results last week which were in line with their earlier pre-announcement. The wake-up call on the conference call was the disclosure of the potential impact of foreign exchange rates on 2009 results. It was disclosed that at the current level of global spot currency rates that Callaway would take a $56 million hit to the revenue line with a much larger proportional hit to the bottom line due to the fact that their cost of sales are all $US denominated.
This results in a sharply lower EPS estimate for 2009. We are reducing our 2009 EPS estimate from $0.92 per share to $0.50 per share. This is a larger reduction than suggested by Callaway, but certain important exchange rates have continued to work against them since the end of the year, and the sales volume is very front end loaded on the
2.Impressions from the PGA Show
While we will be publishing our PGA Merchandise Show report at a later time, we should include some of our Callaway specific impressions. First of all, Callaway recognizes that they have not done enough to capture share in the $299 driver category. They also recognize that the consumer still wants technological innovation, but that the consumer wants it coupled with a value proposition. Therefore capturing share in the $299 driver category is going to be extremely important.
Callaway is clearly increasing the marketing emphasis on this category for 2009 with the introduction of the Callaway Diablo driver. They are even making an effort to get usage of the driver on the PGA Tour. Rocco Mediate plans to put the Diablo driver in play on tour, and possibly Stuart Appleby. This is almost unprecedented, as almost all tour spend has focused on top of the line products. It’s truly a new day, but we agree with the direction.
The Diablo also incorporates a unique pseudo-geometrical shape, thus impressing upon the potential customer that a significant amount of technology is inherent in this design.
In the next post i will be continuing this post : -
Callaway reported their year end results last week which were in line with their earlier pre-announcement. The wake-up call on the conference call was the disclosure of the potential impact of foreign exchange rates on 2009 results. It was disclosed that at the current level of global spot currency rates that Callaway would take a $56 million hit to the revenue line with a much larger proportional hit to the bottom line due to the fact that their cost of sales are all $US denominated.
This results in a sharply lower EPS estimate for 2009. We are reducing our 2009 EPS estimate from $0.92 per share to $0.50 per share. This is a larger reduction than suggested by Callaway, but certain important exchange rates have continued to work against them since the end of the year, and the sales volume is very front end loaded on the
2.Impressions from the PGA Show
While we will be publishing our PGA Merchandise Show report at a later time, we should include some of our Callaway specific impressions. First of all, Callaway recognizes that they have not done enough to capture share in the $299 driver category. They also recognize that the consumer still wants technological innovation, but that the consumer wants it coupled with a value proposition. Therefore capturing share in the $299 driver category is going to be extremely important.
Callaway is clearly increasing the marketing emphasis on this category for 2009 with the introduction of the Callaway Diablo driver. They are even making an effort to get usage of the driver on the PGA Tour. Rocco Mediate plans to put the Diablo driver in play on tour, and possibly Stuart Appleby. This is almost unprecedented, as almost all tour spend has focused on top of the line products. It’s truly a new day, but we agree with the direction.
The Diablo also incorporates a unique pseudo-geometrical shape, thus impressing upon the potential customer that a significant amount of technology is inherent in this design.
In the next post i will be continuing this post : -
Labels: 2009, forex, market, marketing, reduces, tips, trade, trading, tricks
posted by Mari @ 12:30 PM
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