Topgolf Callaway Brands began, publicly at least, exploring a spin-off in August 2024. And this past August, the company predicted it likely wouldn’t strike a deal until 2026 as leadership settled. CEO Artie Starrs, a former Pizza Hut Global executive, left the company for Harley-Davidson in September.
Turns out, it materialized much quicker as Topgolf Callaway Brands agreed to sell a majority stake in Topgolf and Toptracer (ball tracking technology) to private equity firm Leonard Green & Partners.
Leonard Green, an L.A.-based firm with investments in Zaxbys, Velvet Taco, and more than $75 million of assets under management, will grab a 60 percent stake while Callaway Brands retains the rest. The company will receive $770 million in net proceeds alongside remaining a part owner.
When finalized—scheduled for Q1 2026—the organization will adjust its name to Callaway Golf Company and update its stock symbol to CALY. It will then recenter focus on golf equipment and active lifestyle apparel.
Following last Tuesday’s news, executives shared some additional insight with investors. Chip Brewer, president and CEO, said the move values Topgolf at about $1.1 billion and the company received “significant interest” during the process. A sale, he said, proved the “best outcome” for shareholders, employees, and other stakeholders.
Callaway picked this route, Brewer continued, over others, like a tax-free spin-off, because of the timeline and assurance. “… significant cash proceeds, as well as the ability to participate in the upside that we view for the future of Topgolf,” he said.
In plain terms, it allows the organization to have greater strategic approach around core competencies as well as improved capital allocation and a simplified structure, he said. Callaway was the No. 1 equipment sales golf company in the U.S. last year and second in balls after Titleist. It also dealt apparel brand Jack Wolfskin for $290 million in April.
Brewer in Q3 noted market conditions “remain excellent” for the golf sector, with the U.S. up 2 percent year-to-date based on National Golf Foundation’s manufacturer shipment data. Also, it’s up mid-single digits on Datatec sell-through reports. Golf rounds played were 1.4 percent higher year-to-date, too, with rounds played continuing to outpace playable hours. Market conditions were climbing in Europe and the U.K. Japan, though, was down slightly and Korea in the low-teens.
Callaway in August delivered all-time high golf ball share in the U.S. at 22.6 percent. It’s held the lead innovation and tech position, according to Datatech, for six consecutive reports.
Post transaction, the portfolio will include Callaway, Odyssey, TravisMathew, and OGIO. Combined, they generated more than $2 billion in revenue over the last 12 months through Q3.
Callaway originally completed its merger with Topgolf in March 2021. The all-stock deal was valued at roughly $2.66 billion. It had previously controlled as much as 14 percent before making the call in October 2020 to form a single entity.
Callaway invested in Topgolf in 2006. The brand finished Q3 with 102 company-owned venues—98 in the U.S. and four in the U.K.—and eight internationally franchised outlets.
As for why the company decided to maintain a stake versus getting out, Brewer said, it’s because Callaway still believes in the concept’s trajectory.
“This transaction in its current form,” he said, “presents speed and certainty as well as significant proceeds and [ability] to participate in the upside. So, we viewed it as attractive, as did Leonard Green.”
Brian Lynch, EVP, CFO, and chief legal officer, said the company will continue to prioritize reinvesting in the business and paying down debt.
At Q3’s exit, net debt was $2.23 billion compared to $2.54 billion last year. Excluding venue financing debt, which is capitalized rent related to Topgolf venues and including convertible debt, the company’s REIT adjusted net debt was $665 million in Q3, down $435 million year-over-year as a result of increased cash.
Brewer added Leonard Green’s plans, while early, include a “measured amount” of unit expansion as well as continuing recent initiatives to drive improvement in same-store sales, “which have obviously transitioned over the last several months.”
Topgolf’s same-store sales climbed 1 percent in Q3, with positive traffic, as two-thirds of transaction momentum, the company said, flowed from repeat customers. That 1 percent figure comped against Q3 2024’s negative 11 percent, giving Topgolf a two-year stack of negative 10 percent. Quarter-over-quarter it was a sizable jump from the negative 6 percent posted in Q2 (negative 14 percent two-year).
Topgolf had posted eight consecutive periods of red same-store sales before Q3’s inch above the line.
Some recent same-store results
- Q3 2025: 1 percent
- Q2 2025: –6 percent
- Q1 2025: –12 percent
- Q4 2024: –8 percent
- Q3 2024: –11 percent
- Q2 2024: –8 percent
- Q1 2024: –7 percent
Brewer reiterated the decision will lead to Callaway returning to an organization dialed in around golf equipment and lifestyle, “which we think will be appealing to specific investors as well as allow the full attention of the corporate team to be on that business, which we also hope will be productive.”
The company’s golf equipment division saw a revenue lift of 4 percent in Q3 to $305.3 million and segment operating income of $23.2 million fall $3.6 million, including $8 million in incremental tariffs. Active lifestyle revenue was $156.5 million.
Topgolf, meanwhile, reported a $19 million increase in segment revenue to $472.2 million thanks to the addition of six new venues, year-over-year, as well as the uptick in same-store sales. Operating income was $31.1 million, up $2.8 million, while adjusted EBITDA came in flat year-over-year at $83.5 million.
Available liquidity as of September 30 increased $391 million to $1.25 billion due to $424 million of increased cash compared to Q3 2024.
Texas Capital analyst Eric Wold, per Seeking Alpha, said the deal should give the company a chance to monetize Topgolf and retain stake in go-forward growth. However, he was disappointed by the implied valuation as a deterioration from the $2.6 billion price in March 2021, and also because it falls under an implied $2.2 billion for Topgolf that Texas Capital included in a “sum-of-the-parts” analysis.
Simply, even despite challenged trends, he wrote, it didn’t fully credit Topgolf’s brand equity or opportunity for renewed growth, in his opinion.
Added Jefferies analyst Randal Konik: “In our view, the potential sale of Topgolf is a transformative event for MODG, representing a decisive step toward biz simplification, strategic clarity, and value creation. By shedding the complexities and risks of the venue business, MODG is poised to unlock its full potential as a pure-play golf equipment leader.”
Getting into what’s going on at Topgolf these days, the brand worked in past quarters to reroute performance through value.
Earlier in 2025, the company shared third-party research that showed a widening gap between experience and affordability. Essentially, customers rated the former highly, but the latter needed work. HundredX data, sourced from customer feedback across roughly 4,000 stores and 21 peers, had Topgolf No. 1 in “fun,” “atmosphere,” and “food and drink.” Yet where it concerned “value” and “price,” the brand plunged to No. 16 and No. 19, respectively.
So, it started to investigate expanded programs such as Summer Fun Passes (unlimited play during non-peak weekday hours), which sold more than double the amount when they were last offered in 2022.
Topgolf also invested in consistent value messaging that led to traffic spiking 12 percent higher above last year in July. The company eliminated booking fees in early August and rolled deals like Sunday Funday, Topgolf Nights, early week offers, and the aforementioned Summer Fun Pass mid-year.
The early week value or day-of-week value (50 percent off golf) has been a unique option for Topgolf, Brewer said previously, since the chain was still getting full price on F&B. The late-night Friday and Saturday model proved a “great experience enhancer” as well.
Topgolf then adjusted its three-bay events business and began providing more flexibility on rates and times for event planners in hopes of increasing conversion rates.
The company in Q2 unveiled 60- and 90-minute reservations, which mixed half of total digital bookings. It implemented Toast as a point-of-sale provider, too, with more than half of locations expected to onboard by year’s end and all by Q2 2026’s close. That’s showed signs of lifting spend per visit and boosting speed of service.
During Q4, Topgolf plans to pilot pay-in-bay and mobile ordering for food.
Starrs in Q2 said traffic steadily rose 10 percent in June, then 12 percent in July, and same-store sales in the first four weeks sequentially lifted to negative 3 percent ahead of the positive Q3 performance.
Additionally, the Summer Fun Pass provided optimism for an upcoming subscription program launch called “PlayMore” that started piloting late Q3. For $20 per month, a member gets one free hour of play per month plus an appetizer each visit. Customers can spend $120 for a six-month option or $220 for a year that earns a month off.
Brewer told investors Topgolf’s “impressive traffic growth” in Q3 owed largely to its one- to two-bay portion of the business.
That consumer-driven segment comprises 80 percent of Topgolf’s annual revenues. Brewer said Q3 traffic climbed “high-teens” there and same-store sales bumped 2.4 percent.
“I couldn’t be more pleased with the immediate and significant response to this strategic repositioning,” Brewer said. “I believe the consumer insight and execution here was just terrific, and the clear results bode extremely well for our future outlook.”
He noted Topgolf wasn’t planning to take its foot off the value pedal, either. It would instead further optimize marketing and introduce new reasons for customers to visit. The brand’s frequency today is 1.5X per year. So, there’s room to grow.
“We’re winning share, and I couldn’t be more pleased with the reaction,” Brewer said.
One added initiative was variability on bay timing. Now, customers book bays in smaller windows—within an hour, hour and a half, not just two hours on the reservation system. Brewer said that’s proven impactful and met consumers where they are.
F&B is trending up as well, he added. “It’s got a couple of different factors going on, but it’s being driven by the traffic and no real change in trend,” Brewer explained. “We’ve also been able to initiate some new offerings in the food and beverage sector, platters and such, which have been well received. There has been a continuation of the long-term trend of alcohol attachment, but no change in that trend. So food and beverage has been a positive for us as it relates to the quarter.”
With profitability, Brewer noted Topgolf venue EBITDA margins were just over 33 percent in Q3, around flat year-over-year despite the value increase.
The company’s three-plus bay business, primarily an events arm, remains negative but has started to level off, Brewer said. You can see the shift in results and leads. It has initiatives planned for Q4 to maintain growth, including per-player pricing, dedicated marketing, and online booking capabilities for three-to four-bay events.
The company expects same-store sales for Topgolf to run flat year-over-year in Q4, which would result in mid-single-digit declines for the full year.
Q4 performance generally gets disproportionately impacted by the three-bay corner—historically 30 percent of sales mix this time of the year (it’s normally 20 percent)—and even more heavily weighted due to holiday parties.
Topgolf is on track to open four venues in 2025 and recently opened in Woodbury, Minnesota. New Braunfels, Texas, in December will round out the calendar. Three are expected for next year.
