Callaway is weighing up what to do with Topgolf, as visitor numbers fade

Topgolf — the driving range chain where families, friends, and colleagues can whack a few balls onto greens littered with interactive targets — isn’t getting the footfall it used to, leading parent co. Topgolf Callaway Brands Corp. to explore a potential spinoff.

Golf ball, bag, and club-making giant Callaway acquired Topgolf in a 2021 deal that valued the make-golf-fun-again brand at more than $2 billion, keen to get in on the less stuffy off-course craze that Topgolf has capitalized on since it was founded 24 years ago. In its latest report, however, the company bemoaned “softer than expected” traffic at the ranges, despite CEO Chip Brewer claiming last year that more people would be visiting a Topgolf in 2024 than “playing traditional golf”.

FORE! (quarters of decline)

Reduced visitor figures have been weighing on Topgolf’s top line too, with same-venue sales declining in each of the last 4 quarters, as the allure of grooving your swing while surrounded by “loud music, giant targets, giant TVs, and hand-crafted food & drinks” has started to fade a little.

In previous quarters, the company had explained that the falling figures were just a correction following a “post-Covid surge in the corporate events business” in the preceding year. The further we get from the pandemic, though, the more difficult it becomes to explain the drops away, with Brewer conceding in Q2 that he’s been “disappointed” with Topgolf’s same-venue sales figures and the company’s share price for some time. Topgolf Callaway Brands stock is down 19% in the last 5 days, and down more than 67% since its May 2021 peak.