The Pellucid Perspective - July 2013 - (Page 10)

GOLF EQUIPMENT SALES An ominous April for equipment sales By Jim Koppenhaver W atching equipment sales through the publicly-released information is like stepping into a time warp. Although we’re currently in the month of July (just barely) and the season is half gone, the most current equipment sales figures in the public domain are April and take us back to pre-season for most of the country and what was happening during the Masters. That said, it’s still instructional and provides another facet of golf industry health to pay attention to via the “DVR-like” figures as the season unfolds. As part of our monthly By-the-Numbers section, those of you who make it to the middle section of the magazine (and are, like myself, quantitatively-inclined folks) see the graphical summary of facility revenue, rounds and equipment sales. When I compile the numbers each month, I have the benefit of seeing how the figures are changing as I update the tables and charts. The big thing I noticed immediately this month during the update was that a number of the equipment sales categories swung from modest gains vs. 2012 to fairly sizeable deficits. This was more pronounced in the On Course channel than the Off Course but, at the total channel level, both showed downward movement for the Year-to-Date (YtD) period based on April’s results. While one month does not a season make, I wanted to devote a cautionary column on this “speedbump” that the equipment sector and the collective industry hit in a key selling month. By Pellucid’s calculations, the 3 key segments to watch in golf equipment are Woods, Irons and Balls, which are between 2025% contribution each to total Dollar Sales and collectively account for roughly two-thirds of total category sales. Pellucid further divides the category into segments we label Durables (Woods, Irons, Wedges, Putters and Bags) and Consumables (Balls, Shoes, Gloves). Hence, Woods and Irons are the key sub-segments of Durables and Balls the primary sub-segment of Consumables. (Shoes is also a meaningful contributor but only about half the Balls Dollar Sales by our estimates). Let’s see what happened in each of the two channels by the segments (Durables, Consumables) and the sub-segments (Woods, Irons, Balls etc.) in the April YtD figures. In the On Course channel, the table below left shows the dramatic downturn in Dollar Sales YtD in the April report. Looking first at the Durables segment and the sub-segments of Woods and Irons, both showed significant deceleration in Dollar Sales from the March figures. Through March, Woods were basically flat (up 1%) and Irons were showing a 3% decline. As shown above, after the higher volume month of April (but it’s also only one month vs. the 3 combined months of Q1), Woods dropped to a double-digit loss while the decline in Irons more than doubled from March to April YtD. On the Consumables side looking at the bellwether Balls sub-segment, the dip wasn’t quite as steep, going from a +3% year-to-year in March to basically flat in April. The combination of the drops in the various sub-segments pushed the channel from being basically flat at the end of March to -6% in one month. (Remember that this is a YtD number though, so for the month of April to pull that number down that far, the month’s decline had to be well in excess of 10%). Meanwhile, over in the Off Course channel, the table below outlines the same March-April YtD comparative figures. The good news in the Off Course channel is that we aren’t seeing the significant downturn in the trend comparing April to March YtD. I’ve highlighted in the table above, however, the fact that while Woods’ weakness to year-ago didn’t decline significantly, it just started the year in near-double digit negative territory and has basically stayed there. On the Consumables ON COURSE CHANNEL OFF COURSE CHANNEL Mar ’13 YtD $$s Woods 1% Irons Mar ’13 YtD $$s Apr ’13 YtD Units –11% Woods Irons Apr ’13 YtD Units –8% –9% –3% –8% 6% 9% Wedges –11% –16% Wedges –1% 0% Putters –11% –16% Putters –6% –8% Bags –9% –10% Bags 5% 5% Balls 3% 0% Balls 1% –4% Shoes 14% 7% Shoes 16% 15% Gloves –3% –4% Gloves 4% 0% Total Channel –1% –6% Total Channel 1% 0% 10 The Pellucid PersPecTive July 2013

Table of Contents for the Digital Edition of The Pellucid Perspective - July 2013

The Pellucid Perspective - July 2013
Contents
GolfNow buys FORE! Reservations
An inside look at the Fore!-GolfNow deal
FORE! Reservations sells to GolfNow? Preposterous!
PGA of America, Tour (reluctantly) accept anchoring rule
An ominous April for equipment sales
Pace of play campaign picking up speed
June golf weather impact: Flat, but encouraging
Boomers boost Sunshine State market, but clouds looming on the horizon
Cliffs Communities emerge from bankruptcy, Tiger’s course still on hold
Golf fights back, finally

The Pellucid Perspective - July 2013