Callaway Golf shares score off Nike's market duff

  • 08/05/2016 12:35 AM
  • Source: CBS News
  • by: Jonathan Berr
Callaway Golf shares score off Nike's market duff
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According to the National Golf Federation, 24.1 million people played at least one round of golf in 2015, a slight drop from 24.7 million in each of the two previous years. The U.S. currently has about 15,372 golf courses, down from a peak of 16,052. Players have been giving up the game because of its time commitment, cost and difficulty, according to Steve Mona of the World Golf Foundation. Nike wasn't able to overcome those demographic challenges as sales for Nike Golf have slumped for three years.

One reason for the declining interest in golf has been Tiger Woods. The 40-year-old veteran, who has won 14 major tournaments, ranking him second in the sport's history to Jack Nicklaus, underwent back surgery in 2015 and hasn't indicated when he will return to competitive play. Woods, still popular among many golf fans despite personal scandals earlier this decade, hasn't won a PGA tournament since 2013.

"You have had a lot of the fringe and newbie golfers come and go," said Michael Swartz, an analyst with SunTrust Robertson Humphrey, adding that the game has plenty of passionate fans. "A lot of that was quite frankly driven by Tiger Woods."

Success in the golf business has also eluded Nike's top rival Adidas, which plans to sell its business that makes TaylorMade and Adams clubs, among other products. Acushnet Holdings Corp., the corporate parent of Titleist and Pinnacle golf balls, recently announced plans for an initial public offering, even though it lost nearly $1 million last year. Also faced with poor sales, Dicks Sporting Goods (DKS) in 2014 fired more than 500 PGA professionals it had employed in its stores.

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