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Topgolf Stock Tumbles on Concerns About Corporate Business

Shares of

Topgolf Callaway Brands

were deep in the rough on Wednesday, a day after the company disclosed that its corporate business is softening.

Topgolf stock (ticker: MODG) was around $17.90 in Wednesday midday trading, down more than17%.

The company, based in Carlsbad, Calif., reported that it earned 17 cents a share on an adjusted basis in the first quarter, above the FactSet consensus estimate of 15 cents. It released the earnings after the market closed on Tuesday.

Besides equipment and apparel, the company’s businesses include its Topgolf entertainment centers. These high-tech driving ranges have a sports bar feel and allow customers to track the distance, height, and speed of their golf shots.

During a conference call with analysts on Tuesday, CEO Chip Brewer said he was optimistic about the company’s outlook overall.

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One concern, however, was that the company lowered its 2023 guidance slightly for same-venue sales at its Topgolf entertainment locations, citing softening demand for corporate events. Topgolf’s guidance now calls for a mid- to high-single-digit increase this year in same-venue sales; previously, it was in the high single digits.

Brewer said the corporate forecast didn’t impact any of the company’s estimates for earnings before interest, taxes, depreciation, and amortization, or Ebitda.

“I don’t want to give you the impression that this just fell off a cliff,” Brewer said, adding that it was “just enough early in the year” and “we wanted to adjust the full-year forecast.”

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In a note after the earnings call, Truist Securities analyst Michael Swartz wrote that the company’s stock offers a “particularly compelling” risk-reward case.

Still, Swartz added that he expects the lower 2023 same-venue sales outlook at the Topgolf facilities “will be the central sticking point with investors.”

Write to Lawrence C. Strauss at

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