Randy Konik: And I guess maybe last question just for Sean. When you look at the 10 year historical model for this company, you have EBITDA margins that were usually around 12% to 13%. We are now around, I don’t know, 15%, 16%, somewhere in that ballpark. You have lower comps. There’s some consolidated industry, there’s customization, fittings, et cetera. Have you kind of put some thoughts to how we should be thinking about long term margin potential in this business, just kind of puts and takes that we should be thinking about over the long term?
David Maher: So we talk about it quite often. I guess before I get specifically into the margin, I think that what we’re most excited about is the building blocks for growth here in terms of the portfolio of assets that we have and products to service the dedicated golfer. And certainly, as that dedicated golfer universe continues to expand to the extent all of these investments that are occurring and the participation rates continue, we feel we’ve got real building blocks for long term growth that we’re excited about, number one. And that’s excluding any potential M&A. We’ve done a few things over the last five or six years that still have opportunities for growth. So first and foremost, we’re excited about what the growth outlook can be on the top line for the company over a five to 10 year period.
Number two, we’re making a lot of investments as we’ve talked about across the company to meet the needs of the dedicated golfer. That’s in terms of customization, in terms of fitting. So we believe we’re well positioned there and certainly we like the margin profile of customization and personalized fitting of our products. In addition, through technology, through direct-to-consumer channels, obviously, managing all channels and all key on and off course partners, we think there’s opportunity. Certainly, we talk about operating leverage in the business and the ability to continue to — through the use of technology and efficiency, deliver incremental EBITDA and long term margin growth. So those are the puts and the outlook that I see. I’m certainly not going to dimensionalize what I see the roadmap in five to 10 years.
Certainly a long time from now. But we believe that, as I said, we’ve got the revenue trajectory and we’re making the appropriate investments across the globe and portfolio that will drive long term growth and hopefully margin expansion.
Operator: The next question is from Joe Altobello from Raymond James.
Joe Altobello: I guess, first question, I wanted to get your thoughts on the growth in the quarter of Pro V1, Pro V1x against the launch period, which I think is sort of unusual. Maybe what did sell through look like in the quarter? And did you guys experience any meaningful share gains in the quarter?
David Maher: So it is — we had a significant launch last year and it’s unusual when you comp favorably again a lunch in the following year given our two year product life cycles. I think the key differential we saw, we saw really nice demand for our loyalty rewarded program, which is our buy three get one free to start the season. And our ops team did a nice job fulfilling that demand in March. So we like the demand — the message that sends around demand for our product. So that was theme one. In terms of market share, again, we’re coming off a big comp last year. We launched a whole new range of new products this year. We feel very strong about our market position. It’s always a little different in the first quarter of an even year as we comp against last year when we sold off some prior generation inventory and conversely our competitors sell off some of their prior generation inventory this year.
So net-net, we like the way our ball business is moving along. And I would add, we continue to see nice demand in the corporate space for corporate logo products. So that’s just another dimension of the golf ball business that’s driving our success. To demand, I hate to keep drilling on the regional piece and the weather piece. But said simply, where people are playing, we like demand. Where they’re not playing due to weather or slow starts, obviously demand is slower. But again, that’s life in the golf business in Q1. But overall, we are real pleased with our first quarter performance and the overall state and readiness of our golf ball business and our ball fitting teams around the globe to do what they’re going to do here in the next couple of months.
Joe Altobello: And maybe a couple of follow-ups for Sean. I guess, first, the yen has weakened a little bit here. Is there any impact on your business or is it too insignificant to really call out? And maybe secondly, how are we thinking about free cash flow conversion in terms of your EBITDA outlook for this year?
Sean Sullivan: I’m not sure I got the second one. But, the yen, we’re certainly watching it. Obviously, it’s at historic levels. We definitely had a impact in the first quarter, which was probably $5 million plus in terms of impact year-over-year. So we are keeping eye on it. Overall, we continue to like the overall international businesses for 2024 in the aggregate. Certainly, we’re keeping our eye on Japan. Joe, your second question?
Joe Altobello: Yes, free cash flow conversion relative to EBITDA this year.
Sean Sullivan: I don’t know that we guide to that. But again, we should — I would expect us to convert at not a dissimilar rate than we have historically.
Operator: The next question is from Casey Alexander from Compass Point.
Casey Alexander: He just stole my Japan question, but I’ll move on to my next one. There seem to be sort of a hat tip towards travel related products in the press release. Is this a nod towards Club Glove, which you basically took control of this year? Has there been an uptick in demand for that new company that you brought on? Did you kind of walk into a nice little uptick in demand at Club Glove?
David Maher: Casey, I wouldn’t make that assumption. I think it’s more commentary on the total of our gear business we were looking last year, we were up some 50% in the quarter and felt we had a nice comp this year even while we added Club Glove and also pulled back on some Titleist branded travel products that were maybe a bit redundant to Club Glove. But I wouldn’t point to that, simply because while we’re pleased with the early start to Club Glove, it’s a rather small piece of the gear story. And again, while we’re bullish and enthused about Club Glove both today and longer term, again, I wouldn’t read too much into that piece of the story.
Casey Alexander: Secondly, my second question is, historically, the repurchase from Magnus has been in $100 million increments. And this most recent one pulled down to $37.5 million. Why the change in the cadence of when you repurchase? Is it to try to keep the stock closer to what the repurchase price is? I’m just curious why change that cadence after several that were at $100 million?
