Good day, and welcome to Topgolf Callaway Brands Corp. 2022 Third Quarter Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal the conference specialist by pressing star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ms. Lauren Scott, Director of Investor Relations. Please go ahead. Thank you, Ian, and good afternoon, everyone. Welcome to Topgolf Callaway Brands Third Quarter 2022 Earnings Conference Call. I'm Lauren Scott, the company's Director of Investor Relations. Joining me as speakers on today's call are Chip Brewer, our President and Chief Executive Officer, and Brian Lynch, our Chief Financial Officer. Jennifer Thomas, our Chief Accounting Officer, and Patrick Burke, our Senior Vice President of Global Finance, are also in the room today for Q&A. Earlier today, the company issued a press release announcing its third quarter 2022 financial results. In addition, there is a presentation that accompanies today's prepared remarks and may make it easier for you to follow the call. This earnings presentation, as well as the earnings release, are both available under the company's investor relations website under the Financial Results tab. Most of the financial numbers reported and discussed on today's call are based on U.S. generally accepted accounting principles. Any instances where we report non-GAAP measures, we have reconciled the non-GAAP measures to the corresponding GAAP measures at the back of the presentation in accordance with Regulation G. Please note that this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to review the safe harbor statements contained in the presentation release for a more complete description. With that, I would now like to turn the call over to Chip Brewer. Thank you, Lauren. Good afternoon to everyone on our call, and thank you for joining us today. I'm pleased to report another quarter of record results for Topgolf Callaway Brands, driven by strength across all of our segments. Total net revenue in the third quarter was $989 million, up 15% year-over-year, or up 21% on a currency-neutral basis. While adjusted EBITDA was $144 million, up 4% year-over-year, or 23% on a currency-neutral basis. The strength of our results underscores our leadership position in the modern golf ecosystem and the positive trends we're seeing across our business, highlighted by increased traffic at our Topgolf venues, market share gains in our golf equipment business, and strong brand momentum in our active lifestyle segment. As we look to the balance of this year and into 2023, we are optimistic about our competitive positioning across each segment, the resiliency of our core consumers, and the embedded growth within our business. Over the long term, we believe we can deliver profitable growth across all of our segments, as well as a competitive advantage via the scale synergies of our combined enterprise. We remain confident that off-course golf will continue to be a key driver of growth in the modern golf ecosystem, and as our recent rebrand suggests, Topgolf is expected to be an even larger contributor to both top-line and bottom-line growth. As you'll see in the outlook section, given Topgolf's strong embedded growth, we see that business contributing more than half of our EBITDA in the very near future, an impressive transformation that also demonstrates the long-term advantage of our diversified modern golf portfolio. Shifting to our segment overview, I'll first start with Topgolf's third quarter results. Topgolf venues delivered an impressive 11% same-venue sales growth in Q3, driven by a roughly even mix of traffic growth and price. Social events were a particularly strong contributor this quarter, as the venues are increasingly gaining recognition as a preferred place to gather for group events and celebrations. Looking forward, we believe we can deliver 10% or higher same-venue sales for Q4 as well, thus delivering high single digits% same-venue sales for the full year. Our strong results and expectations for the business demonstrate Topgolf's distinct position within the market and underscore its ability to thrive in today's environment. They have created a unique guest experience that makes it easier for players to engage with the sport of golf while being entertained and socializing with friends. We remain confident in the sustainable growth outlook for this business, and we believe we have multiple levers still available to positively impact future performance. For instance, we're continuing to roll out an enhanced digital platform aimed at increasing our reservation capabilities and bay utilization. In addition to digital enhancements, Topgolf is also launching an exciting marketing campaign in Q4 of this year. The campaign is intended to further increase both consumer awareness and demand. You'll begin to see increased advertisements in select markets as early as this month with a nationwide rollout early next year. New venue development remains on schedule with two new locations opened in Q3 and six new venues scheduled to open in Q4, the most ever in a single quarter. By the end of the year, we'll have 81 total owned venues worldwide, and we're happy to report that our track record for new venues meeting or beating our financial targets remains outstanding. From an enterprise perspective, investing in the Topgolf venues continues to be our use of capital and one we remain enthusiastic about. The business model is proven, with venues delivering an impressive 40%-50% year-three cash-on-cash return. We have a clear roadmap for the growth ahead of us as we plan to successfully open 11 new venues a year and, at the same time, deliver positive same-venue sales growth across existing venues. Toptracer had a good quarter as well, with approximately 1,600 bays installed. For the full year, we now estimate that we will install between 7,000 and 8,000 new bays. Customer reaction to the product remains strong, and we continue to view this as a great long-term opportunity and a key source of synergy between Callaway and Topgolf. Lastly, we launched a new mobile game just last week called Shankstars. While we have modest financial expectations for this new offering, we believe there will be attractive synergies across the Topgolf business as we leverage the content and characters from the game to enhance the experience at our venues and Toptracer Ranges. Moving to the golf equipment segment. According to Golf Datatech, the U.S. golf equipment market is down only 2.3% through Q3 on a sell-through dollar basis and remains up an impressive 41% compared to 2018. This despite relatively poor weather and playable hours in the early part of this year. The market has clearly not declined meaningfully as many expected it to with COVID restrictions abating earlier this year, and we've been pleased with the fact that we gained market share as the year progressed. After a slow start to the year, our U.S. hard goods market share year- to- date through Q3 was 23.8%, up 97 basis points year-over-year. It's clear that interest in golf remains high and that Callaway is outperforming the market, something I believe we have a track record of doing. With all this, the profitability of our golf equipment business remains high as well. To both protect and build on this position, we've made some key investments in this business over the last several years. For example, we made key additions to our tour team, such as Jon Rahm and new women's world number one, 19-year-old [Atthaya] Thitikul, as well as investing in our Callaway Next pipeline of up-and-coming young players. In R&D, we continue to invest in new capabilities that are establishing a leadership position in artificial intelligence capabilities, an area we believe will be differentiating for the future. In our supply chain, we made significant investments for both clubs and ball, including major upgrades in our Chicopee Ball Plant. These investments, along with our scale advantage, proven business model and iconic brand position, put us in a strong position going forward. We continue to see this segment as a consistent performer over the long term, generating good growth and even better cash flows. The timing of this couldn't be better as it supports the Topgolf development and the attractive capital deployment opportunities we see there. Turning to our active lifestyle segment. The Callaway apparel business in Asia turned in another strong quarter, as did both TravisMathew and Jack Wolfskin. For Jack Wolfskin, in local currency, both China and Europe grew nicely during Q3. We are proud of this result, as investors will note that many of our competitors are struggling in those markets. We're also seeing excellent signs of brand health, as a recent third-party research study of consumer preferences showed Jack Wolfskin to be the number one brand associated with outdoor activities in Germany. The brand just earned the prestigious ISPO Product Award, the gold standard in the outdoor industry for technical and sustainably conscious product design. Shifting to TravisMathew, we continue to see outstanding brand momentum across all channels. The brand is delivering strong double-digit revenue and profit, and they are experiencing another promising pre-book season for spring/summer 2023. Our active lifestyle segment remains a highly profitable segment with excellent growth prospects. Turning now to our outlook. I'd like to give you some color on the balance of this year and due to the level of uncertainties out there and the difficulty that investors may have in quantifying them, an initial outlook for 2023. For 2022, we're raising our full year profitability guidance for Topgolf and the total company despite further FX pressures relative to our last guide. 2022 is clearly going to be another very strong year for us with positive brand momentum and growth across all segments. Looking further forward, we, like most companies, are contemplating the impacts of a potential economic slowdown, further inflationary pressure, and foreign exchange movements. Looking at these in turn, while we're not immune from inflationary pressures or macroeconomic conditions, our consumers are passionate about traditional golf, the Topgolf experience, and our apparel brands. They also generally have the means and desire to continue to enjoy these activities, even amid inflationary pressure or mild economic downturns. We feel this is a key point of strength for our businesses. Looking at only the FX, if current rates hold, it would be a meaningful headwind for us in 2023. However, we view this as a short to mid-term issue, as over longer periods, rates will either moderate or businesses will adjust. Even with all of the above, for 2023, we currently expect approximately 10% revenue growth and approximately $600 million in adjusted EBITDA, with Topgolf contributing a little more than half of this EBITDA. This keeps us on track with our long-term goals communicated at our Investor Day earlier this year. On an FX- neutral basis, this would be equivalent to 13% revenue growth and approximately $665 million in adjusted EBITDA. As FX rates and business conditions inevitably continue to change, we will provide an updated forecast as well as our normal segment information and more specific business projections on our February earnings call. We're only providing this high-level snapshot at this time and only doing so to assist investors in what we believe are unique circumstances. Thank you, and I'll now turn the call to Brian for a review of our financials. Thank you, and good afternoon, everyone. As Chip mentioned, we are very pleased with our performance [in the] third quarter, as we delivered another period of record results. These results include a 15% increase in revenue while absorbing a $50 million negative impact from changes in foreign currency rates versus 2021. Our adjusted EBITDA also increased 4% despite the currency impact, or 23% on a constant currency basis. Our liquidity and financial position remains strong. All of this gives us the confidence to increase our full year guidance for 2022 and supports our growth estimates for 2023. With that brief overview, I will now review the quarterly results in more detail. For the third quarter, consolidated net revenue was a record $989 million, an increase of 15% compared to Q3 2021, or a 21% increase on a constant currency basis. This performance reflects increased revenue in each operating segment and in most major product categories and major regions. Total non-GAAP costs and expenses were $907 million in the third quarter of 2022, compared to $772 million in the third quarter of 2021. The increase was driven by increased variable expenses such as venue operating expenses, as well as increased freight and continued investments to support the business. Third quarter 2022 non-GAAP operating income was $81.1 million, down year-over-year. This decrease was due to changes in foreign currency rates. On a constant currency basis, non-GAAP operating income would have increased 27% and operating margins would have increased 40 basis points. Non-GAAP earnings per share was $0.23 on approximately 202 million shares, compared to $0.14 per share on approximately 186 million shares in the third quarter of 2021. The increased share count is primarily related to an accounting rule change that took effect on January first, which requires that we include 14.7 million shares related to the assumed conversion of the company's convertible notes. Lastly, Q3 adjusted EBITDA was $144 million, up 4% over Q3 2021, or up 23% on a constant currency basis. Now turning to the segment results. In evaluating the company's operating segment performance, please keep in mind that the operating segments were impacted by the negative changes in foreign currency rates compared to 2021. The off-setting benefits from the company's hedging program, however, are recorded in other income and are therefore not reflected in the operating segment results. For example, for the three and nine months ended 30 September 2022, there were $6.8 million and $25.4 million, respectively, of foreign currency hedge gains that were not included in the operating segment for those periods. On a constant currency basis, total segment operating income for the third quarter increased 21.8%. At the segment level, Topgolf contributed $414 million in revenue in the quarter, a 24% increase over 2021, reflecting strong same-venue sales growth and additional new venues. While operating margins decreased slightly during the quarter due to planned increased staffing costs, increased pre-opening expenses, as well as increased marketing spend, we expect the full year to show improved operating margins over 2021. Golf equipment had another excellent quarter as well. Generating $297 million in revenue, a 2.5% increase or a 9.3% increase on a constant currency basis, both versus Q3 2021. This was driven by continued high demand, strong market shares, and good supply in golf equipment. As I mentioned in the Q2 earnings call, predicting the timing of shipments and supply between quarters can be challenging. During Q3, we received some supply earlier than expected, and if you have orders and have the product, you might as well ship it. As a result, some of the strength we experienced in the quarter was due to a shift in the timing of sales from Q4 to Q3. Golf equipment operating income, I mean, increased 8% despite the foreign currency headwinds. Lastly, our active lifestyle segment had revenue of $278 million, up 19% or 31% on a constant currency basis compared to Q3 2021. This increase was led by momentum in the TravisMathew, Jack Wolfskin, and Callaway brands. Active lifestyle operating income decreased $6.5 million in Q3 compared to Q3 2021, but on a constant currency basis, would have increased. Turning now to certain balance sheet items. We remain in a strong financial position with ample liquidity. As of 30 September 2022, available liquidity, which is comprised of cash on hand and availability under our credit facilities, was $659 million, compared to $918 million as of 30 September 2021. The decrease from last year was due to continued investment in Topgolf and planned working capital increases in the golf equipment and active lifestyle businesses to support growth. On a year-over-year comparison, we note that last year's working capital was abnormally low due to the disruption in supply chain related to the pandemic. We expect Topgolf will be cash flow positive and self-funding in 2023. At quarter end, we had total net debt of $1.75 billion, including convertible debt of approximately $259 million. Our pro forma net debt leverage, which excludes the convertible note, was approximately 2.8x as of 30 September 2022, compared to 1.8x as of 30 September 2021. The increase is due to the new venue development. Consolidated net accounts receivable was $275 million as of 30 September 2022, compared to $255 million at the end of the third quarter of 2021. The increase was due to the $132 million increase in revenue compared to the prior period and strong cash collections. Days sales outstanding improved by a day to 52 days in the non-Topgolf business. The quality of the accounts receivable remains strong. Our inventory balance increased to $722 million at the end of the third quarter of 2022, compared to $385 million at the end of 30 September 2021. We feel good about the levels of our inventory. Inventory turns and days on hand are roughly consistent with pre-pandemic levels. We also feel good about the quality of our inventory and do not foresee promotional activity based on our current inventory position. Capital expenditures for the third quarter were $66 million, net of REIT reimbursements. This includes $48 million related to Topgolf. For the full year, we expect total CapEx of approximately $325 million, again, net of REIT reimbursements, including approximately $250 million for Topgolf and $75 million for the non-Topgolf business. $325 million includes $165 million of growth CapEx. Now turning to our balance of the year outlook. We are raising our full- year 2022 revenue expectations to $3.965 billion-$3.985 billion, including approximately $150 million of negative foreign currency impact, which is approximately $21 million more than our last estimate of $129 million. The segment assumptions underlying this guidance are the same as our prior earnings report, with Topgolf segment revenue of approximately $1.56 billion, golf segment revenue growth of 12% or more, and active lifestyle segment revenue reaching approximately $1 billion. The operating segments are covering the increased negative foreign currency impacts. Our full- year adjusted EBITDA guidance of $560-$570 million is a $5 million increase compared to the midpoint of our previous guidance. The golf equipment business is largely expected to cover the incremental foreign exchange risk. Topgolf is now expected to deliver between $240-$250 million of adjusted EBITDA. To reiterate Chip's comments, for 2023, we expect the business to grow approximately 10% in revenue and to achieve approximately $600 million in adjusted EBITDA using currency spot rates from late October. From a constant currency perspective, that would represent approximately 13% or more revenue growth and approximately $165 million in adjusted EBITDA. These projections include no hedge gains as our hedging program resets at the beginning of the year, and also takes into account the lapping of the channel fill-in in the golf equipment business that we had this year as retail inventory has returned to normal levels. Given it is early to provide these metrics, we are not providing segment-level detail at this time. In closing, we have managed to achieve substantial growth year to date despite the macroeconomic headwinds, thereby demonstrating the resiliency of our core consumers as well as the benefits of scale and our diversification strategy. We continue to be excited about the growth prospects of our business and are confident that our competitive positioning across each segment and the embedded growth within our business will keep us on track to deliver on our long-term outlook and to create shareholder value. That concludes our prepared remarks today, and we'll now open the call for questions. Operator, over to you. We'll now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. Our first question comes from Randal Konik of Jefferies. Please go ahead. Yeah, thanks, guys. Thanks for taking my questions. I guess, Chip, first question I wanna ask you is on the Topgolf business. The venue revenues keep coming in above kind of our forecasts. You know, when you factor in some of the changes that have gone on in the world around work from home stickiness, people are leaving cities, going to you know, suburbia, you know, mom-and-pop restaurant bars are closing, do you think that the maturity curve and the maturity volume of the Topgolf venues changes at all going forward, you know, for the positive versus what your prior forecast may have been in terms of underwriting these locations? Can you kinda talk to that a little bit? Sure, Randy. It's clear that Topgolf is building momentum, and you know, it's driving both price and volume increases. It's not just price. We're getting traffic, and you've seen a steady build in momentum of that brand and business. There's probably a lot of different trends converging that are all somewhat favorable for that business, right? The increased interest around golf in general, the hybrid and remote work environments, the experience oriented economy, et cetera, and then just the scale of the business as it builds scale and awareness and momentum, you know, across the country. All of these things are positive for us. Starting to see those very clearly in the data. You know, the other thing that is very clear is that the upside of that business is well above what we underwrote when we did the merger. You know, the upside in venue growth, the upside in the profitability of the venues, et cetera, we're very pleased with the trends and excited about the outlook. Great. That's helpful. Then, you know, moving to the golf equipment side of the business, you know, one thing I asked of your competitor this morning was about his view of the cyclicality or the changes of cyclicality in the golf equipment industry now that we've seen more competitor consolidation. There's probably four companies that matter now on the golf equipment side, but also the rise of customization. I just wanna get your thoughts on your view of, you know, how the cyclicality or lack thereof of the golf equipment industry changes, you know, going forward with these different changes that are, you know, happening or have happened within the industry. Yeah, that's an interesting question, Randy. You know, I don't really view the golf equipment business as cyclical. You know, if you look at historical results, it has not been particularly sensitive to mild recessions or economic climate. The last several years, a very consistent business, but like Topgolf, a lot of favorability recently in the interest around the game, the sport, the growth. Clearly there was concern coming into the year whether there would be some reversion or pullback in interest in purchases and participation and, you know, the data is very clear on that. There has not been. I wouldn't view that business as cyclical, and it's certainly structurally changed over the many years prior to the pandemic. Since then, you know, there's been some excellent tailwinds that we've been enjoying. The last thing, and you already know this, Randy, but the growth of off course, which we are the dominant player of, is a significant factor of what's going to be going on in and around golf. I mean, the definition of golf needs to change. It's not just people on a golf course now, it's people at venues and other off course mediums, and that is a bigger market growing exceptionally fast and, you know, we happen to be in a pretty strong position there. Like, one more I wanna sneak in because you just brought up something that I think is really important. It's these other areas that are growing within the ecosystem. You know, when you look at or can you maybe extrapolate, or expand upon your vision or view of what the ultimate end game can be for, you know, Toptracer and something like TravisMathew. Because when you look at those businesses, it seems to me that the growth trajectory they have creates an, you know, an equity kind of value for them that could be, you know, above the current market cap of your company today. I just would like it if you could expand upon those younger businesses that the market probably doesn't even focus on at this point, you know, how they can. How big you think they can be for those that may not be familiar. Just kind of expand upon that a little bit more because again, they feel like they have value long term that could be above the current market cap of the entire company, which is perplexing, but I just wanna get your view there. Okay, I'm not gonna opine on the potential valuation of any individual segment of our business, but you are correct in identifying there are some, you know, amazing businesses embedded within our overall ecosystem, and two of those are TravisMathew and the Toptracer business. You know, TravisMathew is when we bought it was $60 million-ish of revenue. We've already stated it's expected to hit $300 million in revenue, growing, you know, significant double-digit growth across all channels, just being able to open new stores that pay back very quickly and then drive the overall growth in the various markets where we open those stores. You know, we're starting just baby steps in international and getting into the women's market. But it's a very exciting business. It fits really well within our business and ecosystem. We will have an advantage in the reach to total golfers, and so therefore being able to leverage that. Toptracer similarly, a very small business right now, much smaller in scale than the TravisMathew business, under $100 million in revenue, but really great transformational business. When we put it into ranges, their revenue up significantly, and the consumers love it. We capture a ton of data. It integrates with the venue business. It's a golf specific market. We help them open those, et cetera. Exciting business that has got the potential to transform, you know, how people hit golf balls at driving ranges going forward. I would, you know, dare to guess in five years' time if a range doesn't have, you know, digital technology like Toptracer, and Toptracer is the dominant player in that space, it's not gonna be competitive, and it's not gonna be a very well-viewed consumer experience. Super helpful. Thanks, guys. Thank you, Randy. Our next question comes from Alex Perry of Bank of America. Please go ahead. Hi. Thanks for taking my questions, and congrats on a strong quarter. Just first, could you maybe give us a little more color on the 10% revenue growth for next year? Sort of is golf equipment expected to grow within that, given some of the headwinds you mentioned, such as lapping the channel fill this year? And does the guidance sort of contemplate current trends continuing for the consumer or, you know, some slowdown in the end consumer? Thanks. Sure, Alex. Good question. Unfortunately at this point, we're not gonna provide segment-specific commentary on 2023. I will give you some commentary on general expectations that are embedded in that, you know, preview. Basically, we are expecting continued macroeconomic pressures and inflation, some potential consumer pressure, you know, perhaps even a modest recession. We're not being Pollyannish within that overall. At this point we're going to not break out individual segment expectations[inaudible]. Perfect. That's really helpful. Then just my second question. Topgolf same venue sales accelerated nicely. Is it fair to assume you see no significant drop off in the customer there? And can you maybe give us some more color on sort of walk-in traffic versus your corporate events business and, you know, the key drivers to the sort of 10% same venue sales growth for the fourth quarter, that implies a little bit of a deceleration versus 3Q, but, you know, maybe there's an element of conservatism in there? Well, we said it, 10% or higher, and we did 11%. Alex, to call that a deceleration, I think you're getting a little fine-tuned there. The same venue sales growth in Q4 is really expected to be across, you know, all groups, as it was in Q3. We saw good walk-in traffic, great social events, and good corporate sales in Q3. We see a continuation of those trends in Q4. Perfect. That's really helpful. Best of luck going forward. Thank you. Our next question comes from Joe Altobello of Raymond James. Please go ahead. Thanks. Hey, guys. Good afternoon. I guess a couple questions. Well, I guess first question on Topgolf, and I know, you know, we probably don't have a lot of data going back historically, but is there any evidence in terms of how that business performs, you know, in an economic downturn or recession? I mean, it's not the cheapest form of eating out. No, Joe, it's a great question, and we think about it a lot. You know, there's no good data is the long or short answer to that of how it does in a recession. It did, you know, the last recessions, well, obviously the last one was a significant one. You know, candidly, it did fine during that, but it was early concept stages and, you know, didn't. I wouldn't take too much out of that one way or the other. You know, I would tell you that the data that we're seeing is pretty encouraging, though, right? I mean, perhaps it's not the rosiest of economic times out there right now. You know, some businesses that are particularly sensitive to that are already seeing declines in at least visits. The Topgolf business delivered positive traffic growth as well as, you know, price and is building momentum on the same-venue sales side. Not seeing anything right now, but no historical data like we have in the golf equipment business to share with you. Understood. Maybe a second question. I think it was Brian who said earlier, you guys don't expect any uptick in promotional activity, despite the fact that, you know, channel inventories have sort of normalized here. Maybe help us understand why we wouldn't see at least some increase in promo. Yeah, I think Brian's comment was specific to our inventory levels and whether our inventory levels would cause us to be promotional. The answer to that is no. We have little comfort there. You know, the market probably has more normalized inventory levels right now. There'll probably be more promotional activity than there was in the last couple years, which is zero, by the way, so more than zero, but probably less than historical. Promotional activity is not one of the areas that we are, per se, concerned about. To be clear, you know, there may be some level of promotional activity, whereas in many of our businesses, there was such low inventories in the field and at the wholesale side of it that, you know, 2021 and they didn't have any. A little more. Got it. Okay. Thanks for clarifying. Yep. Thank you. Our next question comes from Daniel Imbro of Stephens. Please go ahead. Yep. Hey, good afternoon, everybody. Thanks for taking our questions. Chip, I wanted to follow up on Topgolf, a little bit different angle. I mean, a common question just around financing costs. I know we haven't operated this business through a downturn, but how are your discussion with your REIT partners going? Are you seeing cost of capital increase? Is that changing kind of the return profile that you're getting or that you're looking for new locations? Just how are you thinking about, you know, capital allocation and growth with the rising cost of capital environment? Yeah. Good question, Daniel, but, you know, we have not seen any, you know, cost pressures on the REIT financing. You know, what's happening is we're becoming a much more safe and secure, you know, person to lend money to as well. There's a good market out there. We have not had any REIT increases as of yet, and we feel good about that market. Good. That's helpful. Then one on the apparel side. You mentioned Jack Wolfskin grew internationally, and you kind of mentioned some TravisMathew pre-orders. I guess on Jack Wolfskin, can you talk about what you think drove that outperformance? Was it better supply chain management? Was it the brand refresh you talked about at the Analyst Day? Kind of what drove that growth? Then any color on the pre-orders for that brand as we look forward. Sure. To the important kind of fourth quarter, first quarter since it's more winter focused? Thanks. Yeah, it's more, Jack Wolfskin is really brand strength. You know, it's in a good category in the outdoor lifestyle category where there's positive momentum in the category at large. They have done a great job in their core markets of China and Germany of strengthening the brand and product line. That has led to the performance that we've seen. What was the last question on that? Just any color. Pre-orders on the pre-orders. You mentioned pre-orders. Not, not- for TravisMathew, so. Yeah, pre-orders, no real color on that. The big season on that'll be the Fall/Winter season, and they're in the early days of getting their pre-books for that now. But we feel good about the momentum of the business. All right. Thanks for the color, and best of luck. Thank you. As a final reminder, if you have a question, please press star then one. Our next question comes from Kevin Heenan of JP Morgan. Please go ahead. Hey, guys, thanks for taking my question. Another one on Topgolf. I was just hoping, can you elaborate on the productivity opportunity there, the increased bay utilization at peak? You know, where are you on labor? Is that still a constraint for you? Just any way you can quantify kind of the opportunity there, maybe near term and long term would be great. Thanks. Without going and giving you any specifics, the labor has stabilized at this point. During Q3, they made a lot of great progress with stabilizing the labor. The venues continue to be profitable, and you'll see it increase during Q4. Yeah. We're at or, you know, we have good momentum in terms of the profitability of those venues. As I mentioned in my comments, we see more levers to pull that will continue to grow the profitability of the venues. I think at our Investor Day, we talked about 32% or something EBITDA margins. Mm-hmm. We're very confident in those and probably believe there's more upside than that. Great. Thanks. Can I just ask a quick follow-up on the golf ball business? You know, the market- Sure. Share has been a pretty linear increase over the past decade. I guess, I mean, what's your view on the path for the next 5 or 10 points of share? You know, where might that come from? Is that, you know, more challenging than the last 5 or 10? Maybe more broadly, you know, how best to think about what you guys embedded as far as maybe consumables or some bigger ticket purchases like clubs, in a more challenging macro backdrop? Thanks. Sure. Yeah, thanks for, you know, noticing on the golf ball. We're very proud of the, you know, steady progression we have had in that business and its growth of it over many years now. Really, we've made, during that time, some significant investments in our manufacturing facilities will allow us to make a really unique product both now and going forward. We think that is what will help us unlock, you know, those next several points of market share gain, which we intend to deliver. A lot of the playbook is what you've seen us pulling over the last several years, continuing to strengthen distribution, continuing to make big investments back, which we think we're largely through now, to be able to build a better product and differentiate in that factor. We're getting some of the best players in the world. This [Atthaya] Thitikul, you know, used the golf ball this year on her way to number one in the world, and top performance, you know, the validation of it is irrefutable now. Continuing this playbook, I think will hopefully deliver the similar results that we've been able to deliver over the last several years. Yeah. Thanks very much. Our next question comes from Casey Alexander of Compass Point Research & Trading. Please go ahead. Hi, good afternoon. Forgive me if this is already in there, but I came to the call late, and I've had a bunch of companies report this afternoon. My only question was, you know, one area where Topgolf still seemed to have some same store slack that they could pick up was in some of the event-driven business that a lot of it falls in the fourth quarter. So I'm just wondering how your bookings for the event business for Topgolf are looking coming into this holiday season as compared to last year. Yeah. Thanks, Casey. Good question. You know, there are two types of events that we track: social events, which have been just, you know, killing it and continue to do so, and then corporate events, which were the slowest to come back, you know, post-pandemic. They were up last quarter, and you know, we see very good trends going forward. We expect them to be up nicely over last year and also a little bit over 2019 levels. We have pretty good visibility on that now, Casey, as you would expect. It's already November and you know, they book those out a little bit in advance. So we feel good on corporate, as well as the rest of that business. All right, great. Thank you for taking my question. I appreciate it. Yeah. Thank you. Thanks, Casey. Our next question comes from. Brian? Our next question comes from John Kernan of Cowen and Company. Please go ahead. Excellent. Thank you for taking my question. Good afternoon. Hey, John. Hey, John. Brian, I think you said ex FX, the business would be at a $660 million EBITDA run rate, which I think is above, certainly above the plan you laid out when you underwrote the transaction with Topgolf and above the Investor Day targets from April. Just can you talk to what's driving the upside versus the plan? It's been pretty consistent upside in your guidance really since you did the transaction. Sure, John. Thanks for noticing our outperformance. It's really across the board. All three segments are performing above what we expected. As Chip mentioned earlier, Topgolf has been on a tear, and we're well ahead of where we expected to be. The golf equipment business is performing [inaudible]. The TravisMathew, Jack Wolfskin, it's all really doing very well. Got it. Any thoughts on openings for Topgolf venue openings in 2023? Yeah. No, we're same as we've been saying, John, 11 venues and we feel good about the pipeline. Just on international, any thoughts on Topgolf International and performance there? A slow ramp there. We opened several this year. We have several more in the works. We have one late this quarter, which is an owned venue in Glasgow. On the franchise side, several in the works, and we expect that to ramp up, but it'll really ramp more in 2024, 2025 than 2023. Got it. Thank you. Thank you. Thanks, John. At this time, it appears that there are no further questions. I'll now turn the call back to Mr. Chip Brewer for any closing remarks. All right. Well, I wanna thank everybody for joining us, but I'd also like to, at the risk of being redundant, summarize what I hope are a few key takeaways from today's call. You know, first is, I think that it's clear Topgolf Callaway Brands is having a phenomenal 2022. We're delivering growth in all segments. There's been continued strength in traditional golf markets, which have not gone backwards as some feared might happen, as well as our position in it, and we've gained share. The Topgolf venue business is building momentum as evidenced by same-venue sales trends, as well as new venue openings, and thus transforming our business even faster than we originally projected. We now expect it to be more than half of our EBITDA next year, and the venue business is continuing to prove itself as a bigger and better business than all previous expectations. To put some numbers behind that, in 2019, Topgolf did just under $60 million in adjusted EBITDA. We're forecasting $240 million-$250 million for 2022, and more than $300 million in 2023. If investors are still thinking of us similar to how they did historically, we believe they're missing the big picture, and we remain excited about the future prospects of this unique and exciting business. Thanks for joining our call today. Best of wishes for the rest of this year and the holidays. We look forward to speaking to you again in February. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.