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MODG Expands Presence in Saudi Arabia With Golf Saudi Partnership
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Topgolf Callaway Brands Corp. (MODG - Free Report) signed a multiyear agreement with Golf Saudi Entertainment LLC (Golf Saudi) to expand its brands in Saudi Arabia. This deal includes popular brands like Topgolf, Callaway, TravisMathew, Odyssey and Ogio, further supporting the company's global growth.
MODG is expanding into the Middle East by partnering with Golf Saudi to establish its presence in Saudi Arabia. This collaboration will introduce innovative offerings and enhance the growth of golf in the region, positioning Saudi Arabia as a significant player in the global golf landscape.
Per the deal, Topgolf will open three venues by 2028, with the option to add two more, all of which will be owned and operated by Golf Saudi. Callaway Golf, Odyssey, TravisMathew and Ogio will become the official equipment and apparel brands for the Saudi national golf teams, elite players and professionals at Golf Saudi facilities. Golf Saudi will also serve as the exclusive distributor of Callaway Golf, Odyssey and Ogio products within the region.
Expansion Efforts to Enhance MODG's Market Presence
The company is focusing on expansion efforts to enhance its market presence. It is assessing both organic strategies, such as improving same-venue sales growth and inorganic options, including a potential spin-off of Topgolf. MODG is registering strong performance in two of its three key areas. The company excels in venue margins and the development of new venues.
During second-quarter 2024 earnings call, it announced plans to open seven new venues this year. It added one venue in Bryan, TX, during the first quarter and successfully opened another in Durham, Montebello, in the second quarter. The remaining four venues are currently under construction and are on schedule. The new venues are performing well and meeting high financial targets.
MODG continues to show its ability to improve operating efficiency in its venues. It consistently delivers strong performance in newly-opened locations, achieving attractive financial returns. The company is also growing its digital capabilities and enhancing the overall consumer experience.
MODG’s YTD Price Performance
Image Source: Zacks Investment Research
Shares of Topgolf Callaway have declined 24.2% in the year-to-date period against the Zacks Leisure and Recreation Products industry’s 4.6% growth. Although the company has underperformed the industry in the said period, it is likely to benefit from increased digital sales penetration and strong market share performance at Travis Mathew and Callaway Golf Equipment. Also, the emphasis on expansion through organic and inorganic options bodes well for MODG's growth prospects.
DDI has a trailing four-quarter earnings surprise of 22.1%, on average. The stock has increased 49.3% in the past year. The Zacks Consensus Estimate for DDI’s 2024 sales and earnings per share (EPS) indicates an increase of 12.6% and 15.8%, respectively, from the year-ago levels.
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) currently flaunts a Zacks Rank of 1. NCLH has a trailing four-quarter earnings surprise of 5.7%, on average. The stock has moved up 19.4% in the past year.
The Zacks Consensus Estimate for NCLH’s 2024 sales and EPS indicates an increase of 9.8% and 125.7%, respectively, from the year-ago levels.
Royal Caribbean Cruises Ltd. (RCL - Free Report) currently carries a Zacks Rank #2 (Buy). RCL has a trailing four-quarter earnings surprise of 18.5%, on average. The stock has gained 81.9% in the past year.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates growth of 18.1% and 71.2%, respectively, from the year-ago levels.
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MODG Expands Presence in Saudi Arabia With Golf Saudi Partnership
Topgolf Callaway Brands Corp. (MODG - Free Report) signed a multiyear agreement with Golf Saudi Entertainment LLC (Golf Saudi) to expand its brands in Saudi Arabia. This deal includes popular brands like Topgolf, Callaway, TravisMathew, Odyssey and Ogio, further supporting the company's global growth.
MODG is expanding into the Middle East by partnering with Golf Saudi to establish its presence in Saudi Arabia. This collaboration will introduce innovative offerings and enhance the growth of golf in the region, positioning Saudi Arabia as a significant player in the global golf landscape.
Per the deal, Topgolf will open three venues by 2028, with the option to add two more, all of which will be owned and operated by Golf Saudi. Callaway Golf, Odyssey, TravisMathew and Ogio will become the official equipment and apparel brands for the Saudi national golf teams, elite players and professionals at Golf Saudi facilities. Golf Saudi will also serve as the exclusive distributor of Callaway Golf, Odyssey and Ogio products within the region.
Expansion Efforts to Enhance MODG's Market Presence
The company is focusing on expansion efforts to enhance its market presence. It is assessing both organic strategies, such as improving same-venue sales growth and inorganic options, including a potential spin-off of Topgolf. MODG is registering strong performance in two of its three key areas. The company excels in venue margins and the development of new venues.
During second-quarter 2024 earnings call, it announced plans to open seven new venues this year. It added one venue in Bryan, TX, during the first quarter and successfully opened another in Durham, Montebello, in the second quarter. The remaining four venues are currently under construction and are on schedule. The new venues are performing well and meeting high financial targets.
MODG continues to show its ability to improve operating efficiency in its venues. It consistently delivers strong performance in newly-opened locations, achieving attractive financial returns. The company is also growing its digital capabilities and enhancing the overall consumer experience.
MODG’s YTD Price Performance
Image Source: Zacks Investment Research
Shares of Topgolf Callaway have declined 24.2% in the year-to-date period against the Zacks Leisure and Recreation Products industry’s 4.6% growth. Although the company has underperformed the industry in the said period, it is likely to benefit from increased digital sales penetration and strong market share performance at Travis Mathew and Callaway Golf Equipment. Also, the emphasis on expansion through organic and inorganic options bodes well for MODG's growth prospects.
Zacks Rank & Key Picks
Topgolf currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Consumer Discretionary sector.
DoubleDown Interactive Co., Ltd. (DDI - Free Report) currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DDI has a trailing four-quarter earnings surprise of 22.1%, on average. The stock has increased 49.3% in the past year. The Zacks Consensus Estimate for DDI’s 2024 sales and earnings per share (EPS) indicates an increase of 12.6% and 15.8%, respectively, from the year-ago levels.
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) currently flaunts a Zacks Rank of 1. NCLH has a trailing four-quarter earnings surprise of 5.7%, on average. The stock has moved up 19.4% in the past year.
The Zacks Consensus Estimate for NCLH’s 2024 sales and EPS indicates an increase of 9.8% and 125.7%, respectively, from the year-ago levels.
Royal Caribbean Cruises Ltd. (RCL - Free Report) currently carries a Zacks Rank #2 (Buy). RCL has a trailing four-quarter earnings surprise of 18.5%, on average. The stock has gained 81.9% in the past year.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates growth of 18.1% and 71.2%, respectively, from the year-ago levels.