David Maher: Yeah. I think it’s a question we have been asked often, and we’re certainly trying to understand ourselves. I’ll attach it to Randy’s earlier question as it relates to fittings. There’s an inertia and energy around fittings that’s hard to avoid. So where Yesteryear’s beginner golfer may not have been as inclined to get fit, that’s not the case today. Hey, you look at rounds, you look at participation, there’s an avid golfer base out there. And our story, we’re focused on the dedicated. We said then, and we say it now, they make up 15 or so percent of the golfers. They play 40% of the round and responsible for about 70% of the spend. And we still think that’s the case. But I would say as it relates to these new golfers, we sort of break them out into two parts.
The true new to the game golfers and the latent golfers, those who played at previous points took some time off and now jump back into the game. So clearly they come in with a bit more experience and a bit more understanding, maybe a step closer to becoming a dedicated player. But when you look at overall and you look at channel activity, you look at overall sell-through, you see clearly this golfer has a preference for performance equipment. And you see that in strong ASPs and balls and drivers in every category, quite frankly. And further to that, and they go hand in hand. They subscribe to the benefits of fitting. So we like what we see. It’s a moving target, but we certainly like what we see in these — in these changing times.
Joseph Altobello: Very helpful, David. Maybe lastly, your thoughts on the January rounds play data. I know it’s a small month and I know there was some weather in there, but just curious what your thoughts — what are you thinking there?
David Maher: Yeah. So just for context, January is about 5% of the U.S. total. It’s probably, I don’t know, 2%, 3% of the global total. Down, obviously, and I’ll answer that question, Joe, on a three-month. So you look at November and this is U.S. up, I think 8%, December up 24%, and January down 16% or 17%. And when I look at January, really I look at three markets. I look at California, Arizona, and Florida. California, Arizona were up. They had some favorable weather comps, even though they had a lot of rain. And Florida was down. So net-net, I think it’s more than anything weather story, and where you’ve had decent weather, you’re going to be fine. And where you have cold and rain, you’re going to take the hit. So I’m going to give Mother Nature a lot of credit for what we saw in January.
Michael Swartz: Okay. Great. Thank you.
Sondra Lennon: Thanks, Joe. Operator, next question, please.
Operator: Thank you. Our next question is from George Kelly from ROTH MKM. George, please go ahead. Your line is open.
George Kelly: Hey, everybody. Thanks for taking my questions, and congrats on another strong quarter. First for you on the increased authorization, the $300 million buyback that you announced this morning. Curious, should we anticipate a similar kind of cadence to your fiscal year ’24 buybacks to what you did in ’23, or do you expect to slow it down like any kind of color there would be helpful?
David Maher: Sure, George. So as I’ve talked about in the past, I think we’re going to be guided by overall net leverage, right? So I’ve talked about less than two in a quarter times for the business. You can appreciate the seasonality in the guide that I really was trying to be prescriptive about what to expect in the first half of the year. So you can imagine there’ll be some variability in leverage, first half versus second half. So I would use the leverage as one indicator of how the pace of share repurchases may or may not proceed in 2024. So again, the capital allocation strategy here. I think our past practice has been well articulated. We’ve got significant investments we’re making in the business for real long-term benefit.
Obviously, very pleased with the dividend increase, and we’ll continue to be opportunistic with the share repurchase at the end of the day, making sure we’ve got a strong balance sheet and the appropriate leverage profile. So that’s how we think about it for ’24.
George Kelly: Okay. Understood. Thanks. And then second question. In your prepared remarks, you talked about CapEx plans and efforts in customization in the ball and apparel businesses. And so I’m just curious, how big are those businesses? And what does the growth path look like? I’m just curious if you could give a little more context around the investments you’re making and the opportunity you see in customization in the ball and apparel stuff outside of the equipment business?
David Maher: Yeah, George. I’ll start and then Sean will jump in. But in terms of those businesses. Right? I did make the point that FootJoy, as an example, while a tough year for footwear, FootJoy apparel was up double digits. So we like the growth we’re getting out of the FootJoy apparel business. I would add shoes to that. So much of what we do in the shoes line, particularly in the U.S. and the UK, is customized. So we’re seeing nice growth in that business. A lot of it, as you would expect, is on course where custom logos are very important. So clearly we’re compelled to invest to increase our capacity. And I also made the point where part of it’s a function of moving from 3PL, where we used to outsource to bring it in-house.
We think it brings just better control, better quality, execution, and more cost-effective. So we like the space. Part two of that question is, as it relates to golf balls, and that’s an automation capability. We’ve been working on for a few years as part of our long-term $120 million capital campaign. We’re really excited about it. It’s a quality play. It’s a throughput efficiency play. It’s inevitably going to be a cost-effectiveness play. And just to contextualize our ball business, roughly one in four dozens are decorated in some way, either with a corporate logo, or a club logo, or a golfer personalization. So a big meaningful part of our ball business.
