Good morning, everyone. Thank you for joining us today for a Cushnet Holding Corp's third quarter 2025 earnings conference call. Joining me this morning are David Marr, our president and chief executive officer, and Sean Sullivan, our chief financial officer. Before I turn the call over to David, I would like to remind everyone that we will make forward-looking statements on the call today. These forward-looking statements are based on Acushnet's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations. For a list of factors that could cause actual results to differ, please see today's press release, the slides that accompany our presentation, and our filings with the U.S. Securities and Exchange Commission. Throughout this discussion, we will make reference to non-GAAP financial measures, including items such as net sales on a constant currency basis and adjusted EBITDA. Explanations of how and why we use these measures and reconciliations of these items to the most directly comparable GAAP measures can be found in the schedules in today's press release, the slides that accompany this presentation, and in our filings with the U.S. Securities and Exchange Commission. Please also note that references throughout this presentation to year on year net sales increases and decreases are on a constant currency basis unless otherwise stated, as we feel this measurement best provides context as to the performance and trends of our business. And when referring to year-to-date results or comparisons, we are referring to the nine-month period ended September 30, 2025 and the comparable nine-month period in 2024. With that, I'll turn the call over to David.

Good morning, everyone, and thanks to Sandra, who last month started her 28th year with our company. As always, we appreciate your interest in Acushnet Holdings. As the golf world exits peak season in many regions and begins prime time across the sunbelt, the sport and business of golf continue to be vibrant, with an increased number of golfers playing an increased number of rounds globally. After a weather-induced slow start to the year in the U.S., rounds of play accelerated in the third quarter, which is the largest participation period of the year, and we now expect worldwide rounds in 2025 to match or exceed what was a record 2024. Its trade partners are by and large healthy and investing to enhance their facilities and ultimately their value propositions to best meet the evolving preferences of tomorrow's golfers. The global golf market is structurally sound with momentum in the U.S. and EMEA offsetting softness, mainly from footwear and apparel across Japan and Korea. And within a Kushnit, our team is relentlessly focused on exceeding dedicated golfer expectations, developing great product, the pyramid of influence, and our partners, and executing a wide range of fitting and golfer connection initiatives. Companies on wavering commitment to product quality, best exemplified by every Pro V1 golf ball, which passes more than 100 quality checks throughout the production process. As a result of this commitment, our return rate is one golf ball out of every 16 million Pro-V-1s produced. This operating model, Akushnet's blueprint for success, is continually refined and improved upon by our team as we strive to provide great products and services to golfers, execute our capital allocation strategy, and create shareholder value for our investors. To slide four, and our third quarter and year-to-date results. For the quarter, Akushnet delivered worldwide net sales of $658 million, dollars a five percent constant currency increase over last year with gains across all segments adjusted EBITDA of 119 million dollars grew by 10 percent year to date sales of 2.08 billion dollars were up four percent and adjusted EBITDA of 401 million dollars was up two percent compared to last year getting to our segment results you see the continued global momentum within Titleist golf equipment, which has grown 5% in both the quarter and year-to-date. Key drivers have been the year-to-date growth of our Pro V1 franchise in all regions and the very successful launch of new Titleist T-Series irons and limited edition Vokey SM10 wedges in Q3. In recent years about the investments we have made to strengthen our golf equipment product development and enhance manufacturing capabilities. Our growth and momentum today are byproducts of these investments. The Kushnitz Golf Gear segment also had a 13% gain and is up 8% year-to-date as our team brings a steady flow of compelling products to market and leverages our expanding custom capabilities and strengthening supply chain. Within gear, the company's travel brands have increased 20% year-to-date with especially strong growth from our Lynx and Kings and Club Glove brands. The footjoy business continues to build momentum and delivered another positive quarter with revenues up 3% of our premier and hyperflex footwear models, fewer footwear closeouts, and steady glove growth. FJ's apparel business adds to the brand's story, showing resilience with quarterly and year-to-date gains. As we have discussed throughout the year, these trends are positively affecting FJ's market momentum and financial performance in 2025. And finally, net sales of products not allocated to a reportable segment were up nicely in the quarter, with continued momentum and double-digit growth from Schuss, led by outsized gains across their golf business. Now, looking at our business by region on slide 5, you see the U.S. market continues to be strong, up 6% with growth across all segments, led by Titleist Golf Equipment. EMEA posted a 14% gain in the quarter and is now up 8% year-to-date. Rounds of play are up high single digits as the region benefits from favorable weather comps versed last year. Korea was up 3% in titleless golf equipment led by golf balls, while Japan was off 13% in the quarter and 7% year-to-date. And as you see, our revenues and rest of the world were up 5% in the quarter and 3% year-to-date. In summary, we are pleased with the overall health, but these product lines are in great shape. Inventory positions, both owned and at retail, are in line for this time of the year, and we are confident in our team's ability to execute against our strategy. I will now pass the call over to Sean. Thank you, David.

Good morning, everyone. As highlighted, we had a great third quarter and solid year-to-date performance. Third quarter net sales were up 5%, while adjusted EBITDA was $119 million, up $11 million from last year's third quarter. For the first nine months of 2025, net sales increased 4%, and adjusted EBITDA increased 2% period last year. Moving to our income statement highlights on slide 8, gross profit in the third quarter of $319 million was up $15 million compared to 2024, driven by increases across all three reportable segments, primarily related to higher average selling prices, favorable mix shift. We also had approximately $10 million in incremental tariff costs in the quarter, and year-to-date have recognized $15 million. The margin of 48.5% was down 50 basis points versus prior year, primarily related to the year-to-date gross margin of 48.6% was consistent with last year. SG&A expense of $205 million in the quarter increased $5 million from the third quarter of 2024 as we continue to invest in A&P to support new product launches and future growth initiatives, including our fitting network and IT systems. SG&A also included $2 million of restructuring costs related to the voluntary retirement program the company initiated earlier this year. As a reminder, we expect a further charge in Q4 related to this approximately $5 million. Interest expense of $14.5 million in the quarter was up $1 million due to an increase in borrowings. Year to date, our effective tax rate is 23.6%, 200 basis points more than last year's rate through nine months. Tax rate in Q3 was 37.3 percent, up from 19.3 percent last year, primarily driven by a shift in our jurisdictional mix of earnings and a reduced income tax benefit related to the U.S. deduction of foreign-derived intangible income, resulting from the enactment of the One Big Beautiful Bill Act. Moving to our balance sheet and cash flow highlights on slide nine, Our strong balance sheet and consistent cash flow generation continue to support the disciplined execution of our capital allocation strategy. We remain focused on investing in the business to drive long-term growth while also returning capital to shareholders through dividends and share. Our net leverage ratio at the end of Q3 using average trailing net debt was two times. Inventories were up 3% when compared to last year's third quarter, reflecting some advancement of inventory ahead of tariff deadlines and the impact of our operations. Overall, we remain comfortable with our current inventory position and quality. Year-to-date cash flow from operations decreased from 2024, primarily due to increased investments in strategic initiatives, including our IT systems and increased working capital requirements. Expenditures were $51 million in the first nine months of 2025, and we now expect full-year CapEx spend to be approximately $75 million. In September, we returned approximately $230 million to shareholders with $188 million in share repurchases and $42 million in cash. Our board of directors declared a quarterly cash dividend of $0.23.5 per share, payable on December 19th to shareholders of record on December 5th, 2025. Looking ahead to the remainder of the year, I would like to provide an update on our full-year revenue and adjusted EBITDA outlook, shown on slide 10. We expect full-year 2025 revenue to be in the range of $2.52 billion and $2.54 billion on a reported basis. Second quarter call, we're still forecasting low single-digit growth in the second half, driven by contributions across all reportable segments. We now anticipate the full-year FX impact to be negligible compared to last year, resulting in aligned, reported, and constant currency growth ranges. Both are projected to be between 2.6% and 3.4% for the full year, representing a midpoint growth of 3%. This midpoint implies fourth-quarter revenue over approximately $448 million, representing high single-digit growth over Q4 2023, a period consistent with the cadence of our product launch cycle. Moving to adjusted EBITDA, we were projecting full-year 2025 to be in the range of $405 to $415 million. dollars. Incremental full-year gross tariff costs are expected to be $30 million, about $5 million lower than our previous estimate, driven by timing shifts and tariffs. The $15 million gross tariff hit win in the fourth quarter. Strategic mitigation efforts we've discussed, we still anticipate offsetting a meaningful portion of the full-year gross. Very pleased with our year-to-date performance and full-year outlook. The team remains focused on finishing the year strong and continuing to execute on our long-term strategic priorities. With that, I'll now turn the call over to Sandra for Q&A.

Thanks, Sean. Operator, could we please open the lines for questions?

Thank you. As a reminder, to ask a question, please press star 1 on your telephone keypad. If you would like to withdraw from the queue, please press star 2. Our first question comes from Joe Altebello at Raymond James. Please go ahead.

I guess my first question is on U.S. sales. If I look at it year-to-date, you're up almost 5%. I was wondering if you could kind of parse that out between volume and price and maybe what that looks like relative to the category.

I'll take it, and obviously David can supplement as necessary. When we look at U.S. sales, again, very pleased. I think it's also important to keep in mind the product cadence, right, of each of our categories in each of the segments. So, you know, the ball business has done incredibly well in the U.S. We've had a good year in clubs in terms of both volume and price. You know, we didn't take price in balls in 2025. So you can see that a lot of the ball growth is coming from volume gains in that category. On the club side, we're comping against last year's Metals launch, which is generally higher ASP, so a more difficult comp. But given the momentum we have with the Irons launch and the other special edition categories of Voki wedges, as David highlighted, we've seen good gains there as well. So, as I look at clubs versus two years ago, we're seeing volume gains independent of price, which I think is the right comp for that category. You know, on the FootJoy side in the U.S., you know, obviously we are focused on profitability, winnowing the portfolio, and really going more premium, particularly in the footwear category. and gear in the U.S. has seen really great performance across all categories, gloves, bags, and headwear. You know, obviously the golf, you know, even FootJoy has done great with gloves. Obviously rounds of play with that consumable product is a good comp, too. So all in all, sorry to answer your question directly. You know, I think we're pleased with both price and volume. I think the product cadence matters a lot. You know, we did take some selective pricing in both FootJoy and gear midpoint of the year. So that's having some effect on those segments.

Yeah, Joe, I'd echo what Sean said. Really two parts equipment, really not a pricing story this year. And, again, you really need to look at our two-year cadence. But we're very pleased with the growth and momentum within equipment. And then, as Sean said, the wearables gear market, a little more tariff impact there, and we took some selective price wear and gear, not across the line, but in Kiki models earlier in the year. So I think the best way to think about it is to look at equipment one way and the rest of the portfolio a little bit differently.

Got it. Very helpful. And maybe just to kind of pivot to tariffs, I think you mentioned earlier, $30 million for this year, but you expect to mitigate a good portion of that. How does it look for 26 in terms of what you're thinking about maybe an incremental impact for next year?

Yeah, Joe. So certainly this year at 30 was slightly lower than what we had anticipated and what the impact is in Q4. As we fast forward to 2026, you know, our number today, if nothing changes, is probably just north of $70 million, 7-0. You know, we've done good work in terms of, you know, our strategic initiatives around vendor shift changes within the supply chain. You know, again, I'm not going to give you a percentage today, given where we sit in the year. But the expectation is we go on our 26 planning cycle. We're going to mitigate, again, a meaningful portion of that 70 plus million dollars in 26.

I'm sorry, Sean, is the $70 million total, or is that incremental?

It's the full impact for 2026. It's obviously $40-some-odd million incremental to 2025.

Okay, super. Thank you.

Thanks, Joe. Operator, next question, please.

Thank you. Our next question comes from Matthew Boss at JPMorgan. Please go ahead.

Great. Thanks. It's Amanda Douglas on for Matt. So, David, just to start, could you speak to the health of the overall golf participation that you're seeing across regions and elaborate on reception you've seen in the marketplace to your T-Series irons and the Pro V1 franchise?

Yeah. Hi, Amanda. So, maybe high level, right? We like where industry fundamentals are. They're in very good shape. Rounds of play, obviously very strong. I made the point earlier, our consumer is engaged and healthy. But to your question, if I dig into rounds of play around the world, up slightly in the U.S., terrific after a strong third quarter. U.K., EMEA, up by single digits, great. Even Japan and Korea, where we've called out some softness in wearables and in footwear, we've got Japan through nine months flat versus a year ago, up double digits versus four or five years ago, and we've got Korea down 1% through the first nine months, but up 20-some-odd percent versus four or five years ago. So structurally, we like where the industry sits. Participation is the engine and driver to a lot of what we do, which is why we pay very close attention to it. So that's really part one. But I will lean into just, hey, fundamentals, rounds of play, consumer all in good shape, certainly for this time of year. To your questions about Pro V1, um you know this was our our 25th anniversary of of the pro v1 golf ball uh we leaned into that a bit early in the season and and as we've said um very pleased with our golf ball performance this year both in terms of of sell-in and sell-through and and growth in in all regions um and and behind that is the great work by our production team right we uh we produce some 70 percent of our golf balls in massachusetts the rest in in our plant in in thailand um and our team's done a great job keeping pace with strong demand so really pleased with where pro v1 is through this time of year um and and as we start gearing up for next year similar to that across the pyramid of influence um our counts our wins are really strong and that just that for us provides validation and endorsement of our performance and quality stories. So a particularly strong year for Pro V1. And then your question about T-Series iron launches, again, we're really pleased. We had high expectations. We made some meaningful changes to the product, which I think the golf audience, our target consumer, has responded very well to. And I will make the point that, you know, anytime we talk about golf clubs, particularly irons which are so custom fitting centric you know for us it's it's great work by the product development team on the products and and part two of that is great work by our fitting teams around the world around the world to to tell the story to to golfers and make sure golfers are getting fit um with the right products and and the final point i'd make is we're seeing a whole lot of blended sets which we like which which shows the the strength and um and capabilities of our our fitting network and also uh our supply chain but to your questions uh pro v1 t-series

really strong out of the gates on on both fronts um and we like we like our position that's helpful and and sean just as a follow-up as we look ahead to 2026 in a flat or modest growth rounds played backdrop for the industry, help us to think about gross margin drivers or multi-year SG&A investments just as we're shaping the initial P&L.

Yeah, when we look at, you know, gross margin, again, we're obviously mitigating the tariff. You know, I think that we continue to see a market even in a flat grounds of play environment. We believe that where our club business is position particularly helps us drive better than market growth. As I look at the puts and takes on gross margin, again, I think tariff will be the headwind. We'll mitigate a meaningful portion of that as we move forward. So, I'm hopeful that we don't have a material impact to our gross margin portfolio. And as we've talked about on past calls, we've made a lot of investments in 24 and 25 in OPEX. We've obviously invested in our fitting networks, as David talked about, both on balls and clubs. And, you know, the expectation is we're going to see operating leverage and hopefully we'll see the opportunity to continue to drive better than revenue growth, EBITDA growth for the company. But, you know, still early days as we go through our 26 planning cycle, but we feel very good about where we are positioned going into 26.

That's helpful. Thank you. Thanks, Amanda. Operator, next question, please.

Thank you. Our next question is from Simeon Gutman at Morgan Stanley. Please go ahead.

Good morning, everyone. This is Pedro on for Simeon. Congratulations on a strong quarter.

As my first question, could you give us a bit of color on the sell-through trends at retail and channel inventory levels both for the pro in one ball and for the club launches yeah i i'll link i'll link uh and this is as much a global commentary um i'll link our our couple of comments made one we like our growth and our golf ball uh growth year to date we like our in-market inventory positions and what obviously connects those is sell-through so it's It's been a good sell-through year for Titleist golf balls, and especially Pro V1. Again, growth in all regions is no small feat, but our team managed to achieve that. And I would say aided by some interesting new follow-ons, whether it's Pro V1X, Left Dash, some new enhanced alignment products. So we're really pleased with the product itself, but the franchise continues to get, I think, more compelling and value-added to our target audience. So, yeah, we don't, as you may know, Pedro, we don't really zero in on market share by region for a lot of different reasons. But, again, I would say if you look at our top-line growth and you look at inventory levels around the world, which are in great shape, that implies we're in really good shape. It implies a very favorable, positive sell-through story for the year.

Okay, great. That's helpful. And as a follow-up, the full-year guidance implies a bit of a deceleration in sales growth relative to where you've been running the past couple of quarters on a year-on-year basis. Is there something that you're seeing specifically kind of going into the holidays, or is it just the tougher comparisons versus last year?

And I think the implied midpoint of the guide is about, what, $448 million of revenue. It's certainly better than last year, but if you look back to Q4 of 2023, where I think we did about $413 million, that's a high, almost double-digit growth rate over 23. So given the product cadence, given the two-year product lifecycle, I think we're very pleased with the Q4. And, again, I'll reiterate what I said in my comments, that we had a second half where we expected low single-digit across all segments. And I think this guide at the midpoint delivers that. So we feel very good about the Q4, and I don't think there's anything unusual about demand about product or otherwise that would indicate otherwise.

Yeah, I'll just affirm Sean's point as it relates to the two-year product cadence. It's really in equipment, right? The best way to see like-for-like comparison, Q425, in equipment, balls and clubs, is to look back two years because that's when the product line was comparable. Again, gear, footwear, less of a two-year story. But, yeah, just to reiterate Sean's point, we feel really good about our business. We feel really good about the half, how we're organizing our product lines for next year. So we don't really think about it or see the fourth quarter as being a period of deceleration. We see it as a period of continued momentum generation. But it is noteworthy to call out within equipment of how we look at things over a two-year product life cycle.

Okay, great. That's helpful.

Thanks, Pedro. Operator, next question, please.

Thank you. Our next question is from Noah Zatkin at KeyBank Capital. Please go ahead.

Hi, thanks for taking my questions. I guess first, if you could just kind of comment on how you're feeling about inventory in the channel, both in terms of your inventory and from an industry perspective, and then just any comments on potential changes or not in retail partner ordering habits.

So I would just first say, Noah, that, you know, inventories in the golf industry at this time of year should be relatively low as you move, as the snow belt, if you will, and northern markets and mid-belt markets sort of move out of season, and they should be relatively low. they are. So we like what we see there. And in the Sun Belt, they should be high. And they're filling up the stores for the start of their season. So that's the expectation as we look at channel inventories around the world. And that's what we're seeing. So no unusual call-outs. Sure, there are pockets here and there, but nothing that bubbles up to caution or concern. We really look at our channel inventories on a month of inventory basis and all very much in line with where they should be. And then the next step will be, you know, our retail partners who are open for the holidays in the North and Midbelt will fill up their shops here in the fourth quarter. But it's as much commentary on the ebb and flow of inventories in golf throughout the year. So again, Channel inventory is at a seasonally low level and very much in line with what we expect. And, you know, to our own inventories, yeah, really good shape. Sean mentioned it. We like what we have. We like the quality of it. We did some pull forward along the way to stay in front of ever-evolving tariffs. But we like where things sit from an overall channel inventory perspective.

Very helpful. And maybe just looking outside of the U.S., obviously, you know, maybe some some puts and takes when you're when you're looking at cross regions of me has been strong this year. Japan's been a bit softer, as has Korea been. So just any thoughts on both your business and the sport outside of the U.S. looking ahead? Thanks.

Yeah. You know, I think I think I've leaned into enough. the U.S. business, right, real strong, rounds of play, consumer, I think our numbers bear that out, especially strong in the MEA this year and U.K. I think that speaks to pretty good fundamentals, but clearly they're getting a bump because of some very favorable weather against some less than favorable weather a year ago, and that attributes or contributes to, you know, some of the high growth rates we're seeing around the play, and obviously that's good for balls and gloves and consumables. So those two, those two markets, particularly strong, maybe a minute on Japan. So I made the comment earlier, Japan rounds are flat. They're certainly upwards four or five years ago. So structurally, Japan's in decent shape. I would say to our business, we feel, we feel pretty good about equipment, right? We like our equipment positioning, ball growth this year, year to date is obviously strong. So again, part one of the story is equipment in Japan is healthy and trending in the right direction. A couple of behind the scenes stories in Japan would be we're going through a pretty meaningful repositioning with our foot joy business. We're exiting some price points, introducing some more premium products in the market. So we had expectations to be down in 2025, and we're meeting those expectations. And then I would add to it our gear business in Japan has been down. I think that's a little bit timing and a little bit overall market softness. But again, Japan, equipment in pretty good shape and repositioning happening within Foot Joy and gear. And then I'll move to Korea. Equipment business, our equipment business in good shape, balls and clubs in good shape. I've talked over the years about the ascension and growth of the premium apparel business in that market. It rode up high and it's been through a bit of a correction this year. And we're seeing that have a negative effect on our business. But overall, structurally, in decent shape from an equipment standpoint, Footwear and apparel, I assume we're not as healthy in Japan and Korea as we're seeing certainly in the U.S. But, again, you add it up, we're still pleased with how the game is holding up. Again, rounds of play were roughly flat in both markets. We're comfortable with, and, again, as we look at the conference a handful of years ago, there's been a bump in the golf marketplace in those markets, but I think they're just dealing with some different macroeconomic forces that are shaping consumer spending, and we're certainly seeing that.

Thank you.

Thanks, Noah. Operator, next question, please.

Our next question is from Doug Lane at Water Tower Research. Please go ahead.

Yes. All right. Thank you, Doug. Good morning, everybody. I just wanted to press a little bit on Europe because you just see a noticeable acceleration in growth in Europe, including double-digit local currency growth in two of the last four quarters, after really most of 2024 and 2023 being flattish, maybe down a little bit. So is there something more going on there than weather? Are we seeing a change in the competitive dynamic in Europe?

Yeah, I think it's, you know, I don't want to give all the credit to weather, but certainly rounds of play and the golf industry has been very healthy. you know, UK up low double digits in rounds of play. That just drives the golf economy. So I think the golf economy is outpacing other sectors. Yeah, we like our positioning and our share positions across all our categories. So we're certainly growing in all categories. It's just, it's a whole lot healthier environment this year than we've seen in the last couple of years um and again just just a healthy healthy uh rounds of play environment uh nice execution by our team we got our product lines right um in in in those markets and and and the final piece um would would be just our continued build out and activation of fitting across balls and clubs and now footwear we're doing more fitting in in emea than we ever have um and that's certainly having a favorable impact on, again, on balls, on clubs, and across footwear, which is the latest entrant into our fitting realm with Fitlap. So, yeah, really happy with the team, happy with the market. Weather deserves some of the credit, but not all of the credit.

Okay, that's good, Collar. Just one last thing on working capital. The use of working capital is more than twice what it was last year. Is there something going on there? specifically that is using up more cash than last year?

I mean, again, we talked about the inventory. We talked about some of the investments we're making in IT and some of the systems. So I think that, Doug, is having some impact of it. But, you know, overall, I feel good about the free cash flow outlook conversion as well. So comfortable at a working capital.

Thank you.

Thank you.

Thanks, everybody. As always, we appreciate your time. on these calls and look forward to connecting in a few months as we wrap up the fourth quarter in 2025 and start talking more in earnest about 2026. Thanks again.

This concludes today's conference call. Thank you all very much for joining and you may now disconnect.