Golf Digest Online : Sessa Partners 3Q Flash(355 KB)

Golf Digest Online | 3319

Sponsored Research November 15, 2022

Sessa Investment Research

Net sales and EBITDA post record highs

OP dipped on one-offacquisition-related expenses

RESULTS SUMMARY

• GDO announced FY22/12 3Q consolidated financial results at 15:00 on Friday 11/11. The table below from the GDO IR Factsheet adjusts FY21/12 figures for comparison to reflect adopting the revenue recognition standard in FY22/12. Headline numbers for the cumulative 9M: net sales +19.4% YoY (Japan +4.1%, Overseas +53.4%), EBITDA +10.9% (Japan +3.4%, Overseas +25.0%), OP -23.5% (Japan +1.8%, Overseas ¥21mn loss → ¥326mn loss) and profit ATOP +82.8% (reflecting the extraordinary gain on debt forgiveness under the US Paycheck Protection Program).
• Operating profit declined by ¥283mn (-23.5% YoY) to ¥921mn mainly due to recording one-time expenses of roughly ¥280mn for the acquisition of SkyTrak and upfront expenses for the additional acquisition of equity interest in US GOLFTEC in the 3Q. By sales category, all categories posted YoY gains for the cumulative 9M: golf goods sales +8.8%, golf course bookings +1.1%, golf lessons +49.0%, and others +43.4%. In others, Top Tracer Range sales rose +74.5% with new installations in 25 facilities / 1,613 bays. In the US, GOLFTEC corporate training centers increased from 144 at the end of last year to 157 (+13), bringing total lesson studios to 236 (+17).

Golf Digest Online Quarterly Consolidated Financial Highlights

[J-GAAP]	FY20/12		FY21/12*			FY22/12		3Q
JPY mn, %	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q	YoY
Net sales	8,973	9,691	8,301	9,892	9,616	9,908	9,585	11,767	11,852	23.3
• Japan	6,983	7,674	5,972	6,730	6,463	6,809	5,865	7,144	6,934	7.3
• Overseas	1,990	2,016	2,328	3,161	3,153	3,099	3,720	4,622	4,918	56.0
Ratio to sales	22.2%	20.8%	28.0%	32.0%	32.8%	31.3%	38.8%	39.3%	41.5%
• Golf goods sales**			4,915	5,561	5,194	5,196	4,974	6,191	5,889	13.4
• Golf course booking			1,066	1,402	1,367	1,409	993	1,406	1,478	8.1
• Golf lessons			1,790	2,327	2,400	2,593	2,910	3,347	3,457	44.0
• Others			529	600	653	709	707	821	1,028	57.4
Gross profit	3,559	4,039	2,783	3,735	3,444	3,818	3,337	4,303	4,011	16.5
GPM	39.7%	41.7%	33.5%	37.8%	35.8%	38.5%	34.8%	36.6%	33.8%
SG&A expenses	2,916	3,397	2,555	3,004	3,197	3,316	3,113	3,677	3,940	23.2
Ratio to sales	32.5%	35.1%	30.8%	30.4%	33.2%	33.5%	32.5%	31.2%	33.2%
Labor cost	978	1,118	1,043	1,068	1,073	1,305	1,192	1,262	1,363	27.0
Marketing-related	480	661	453	765	801	611	564	835	366	(54.3)
ratio to sales	5.3%	6.8%	5.5%	7.7%	8.3%	6.2%	5.9%	7.1%	3.1%
IT / capex	485	495	393	419	470	483	491	501	517	10.0
Goodwill	84	83	85	100	125	132	134	150	228	82.4
Other	888	1,039	580	651	727	784	730	927	1,164	60.1
EBITDA	1,023	1,019	617	1,161	767	1,049	784	1,240	798	4.0
Ratio to sales	11.4%	10.5%	7.4%	11.7%	8.0%	10.6%	8.2%	10.5%	6.7%
• Japan	904	795	538	712	408	717	314	745	654	60.3
• Overseas	119	224	78	449	358	331	469	494	144	(59.8)
Operating profit	643	641	227	730	246	501	224	626	70	(71.5)
OPM	7.2%	6.6%	2.7%	7.4%	2.6%	5.1%	2.3%	5.3%	0.6%
• Japan	773	663	407	576	243	551	157	591	499	105.3
• Overseas	(130)	(21)	(179)	154	3	(50)	66	35	(428)	RE
GOLFTEC studios	207	207	211	212	215	219	225	232	236	+21

Source: GDO IR Factbook data. *Adj. for rev recognition standard applied from 2022. **Includes US club fitting sales.

3Q Flash

Net sales (JPY mn)

Japan		Overseas (US)

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

OP (JPY mn)

		Japan		Overseas (US)

1,000

800

600

400

200

0

(200)

(400)

(600)

Source: compiled by SIR from GDO IR Factsheet.

Chris Schreiber CFA

Company Specialist [e-mail]

This report was prepared by Sessa Partners on behalf of Golf Digest Online Inc. Please refer to the legal disclaimer at the end for details.

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Sessa Investment Research

LEGAL DISCLAIMER

This report is intended to provide information about the subject company, and it is not intended to solicit or recommend investment. Although the data and information contained in this report have been determined to be reliable, we do not guarantee their authenticity or accuracy.

This report has been prepared by Sessa Partners on behalf of the concerned company for which it has received compensation. Officers and employees of Sessa Partners may be engaged in transactions such as trading in securities issued by the company, or they may have the possibility of doing so in the future. For this reason, the forecasts and information contained in this report may lack objectivity. Sessa Partners assumes no liability for any commercial loss based on use of this report. The copyright of this report belongs to Sessa Partners. Modification, manipulation, distribution or transmission of this report constitutes copyright infringement and is strictly prohibited.

Sessa Partners Inc.

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