Callaway Golf Q2 2026: Gross Margins Surge to 50.1%, Debt-Free After Term Loan Payoff
CALY has more than doubled off its 52-week low of $8.
Summary
A strong Q2 2026 delivered gross margins of 50.1%, nearly doubled net income from continuing operations, and a debt-free balance sheet after repaying the term loan. The company also bought back $84.5 million in stock and settled convertible notes in cash, avoiding dilution.
Key Events · Earnings and Guidance · CALY
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Gross Margins Surge to 50.1%
Driven by favorable pricing, product mix, cost savings, and $10.8 million in tariff refunds, Q2 2026 gross margin expanded to 50.1% from 43.9% a year ago.
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Net Income Nearly Doubles
Net income from continuing operations reached $75.8 million ($0.40 diluted EPS) versus $45.5 million a year ago, reflecting higher sales and lower interest expense.
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Debt-Free Balance Sheet Achieved
The $1.16 billion Term Loan B was fully repaid and convertible notes were settled in cash, leaving only $7.7 million in long-term debt. Available liquidity stands at $774.7 million.
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Aggressive Share Repurchases
Under its $200 million buyback program, $84.5 million in stock was repurchased during H1 2026, including 2.9 million shares in Q2 at an average price of $14.87.
Analysis · CALY · Manufacturing
A standout Q2 2026 saw net sales climb 2% to $612.2 million, while gross margins vaulted to 50.1% from 43.9% a year ago—fueled by favorable pricing, product mix, and $10.8 million in tariff refunds. Net income from continuing operations jumped to $75.8 million, or $0.40 per diluted share, up from $45.5 million a year earlier. Proceeds from the Topgolf sale were deployed to fully repay the Term Loan B, wiping out $1.16 billion in debt and sharply reducing interest expense. The convertible notes were settled in cash at maturity, sidestepping dilution, and $84.5 million in stock was repurchased. With only minimal debt remaining, available liquidity stands at $774.7 million. The one blemish is a $28.7 million equity-method loss from the retained 39.3% stake in Topgolf, which continues to weigh on reported earnings.
At the time of this filing, CALY was trading at $19.01 on NYSE in the Manufacturing sector, with a market capitalization of approximately $3.5B. The 52-week trading range was $8.00 to $20.28. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.