As the 2018 PGA Show recedes into the rear view mirror, here are some insights into where the golf equipment and apparel industries find themselves moving toward Spring.  And we all know that Spring is when the fun really begins in the golf biz:

2017 Recap

*Golf Equipment:  In virtually every category of golf equipment, unit sales were lower and Average Selling Prices were up, in many cases substantially.

*While equipment sales in total were off a little over 2% in dollars, apparel sales were up 6%, and combined the equipment and apparel categories improved by 1%.  After a very slow start +1% seems like a very big win.  For comparison sake, total US GDP was +2.3% so we were not far from the norm while facing significant shifts in distribution channels.

*We have tracked and projected apparel sales since 2010 and they have been up in six of the past seven years.  Clearly apparel has been the best performing segment, however it has not been immune to unit declines of late, which were offset by increasing prices.

*The Green Grass and Online channels both gained significant market share while the Off Course Specialty channel contracted, the primary culprit being the bankruptcy of one of the industry’s leading retailers, Golfsmith.  Even though Dick’s picked up a chunk of the Golfsmith stores and re-branded them as Golf Galaxy, the majority of doors closed and wreaked havoc in the channel as a whole.

2018 Direction

*Signs point toward a better macro economic environment: with GDP up, asset values at all time highs due to stock market prices, and additional funds available in many American’s paychecks come February, as tax reform lessens withholding and most people have more cash in the pocket every pay-day.

*Consumer research by Golf Datatech late in 2017 suggested the US Golfer is finally adjusting to higher prices for new equipment, adjusting to the reduced new product cadence by the major manufacturers (which means fewer close outs/price point offerings), as well as higher launch pricing, all of which have driven ASP’s to record levels in most categories of golf products across both hard and soft goods.

*Golf Datatech believes the declines in units sold in many categories will bottom out this upcoming year, and we might even see the beginnings of an uptick.  For 2018 to be an “up year”we will likely need improvements in units, as we believe there will be limited upside in ASP’s coming off the substantial increases enjoyed over the past two years.

2018 PGA Show, Kicks Off the Season

While we’re always careful not to read too much into enthusiastic opinions at the PGA Show, this was the first time in many years there was a near unanimous positive vibe rumbling throughout the Orlando Convention Center.  Lots of new products, launching into relatively clean channels with minimal old inventory, combined with a consumer who is starting to feel good about their financial position and has been very conservative the last few years when buying new golf product…and all felt right with the world…even if it was just for a few days in January.

As we said earlier, the fun in golf begins this spring, but all the ducks appear to be in a row for a good start, now if only the weather cooperates!