Callaway reported third-quarter net sales of $436.9 million, down 5.6% from a year earlier. It raised its full-year sales and adjusted EBITDA outlook, but a reported 51.9% GAAP gross margin included about $31.8 million of tariff-refund benefits that were excluded from non-GAAP results.
Sales fell while reported profit turned positive
For the quarter ended September 30, 2026, Callaway reported GAAP net income from continuing operations of $48.1 million, compared with a $4.1 million loss a year earlier. GAAP diluted earnings from continuing operations were $0.26 per share, compared with a $0.02 loss per share.
The company said its net sales decline reflected, among other factors, its shifted irons launch timing and lower-margin product rationalisation. It also cited foreign-exchange headwinds in Asia. Those explanations are the company’s stated context, not an independent assessment of future demand.
GAAP and non-GAAP margins answer different questions
Callaway reported GAAP gross margin of 51.9% and non-GAAP gross margin of 45.0%. The company said the GAAP margin benefited from about $31.8 million of non-recurring tariff refunds; that benefit was excluded from the non-GAAP result.
That means the two percentages should not be treated as competing versions of one measure. The non-GAAP calculation has specified exclusions and should be read with the company’s reconciliation to the comparable GAAP information.
Source observed at . Each row links to Callaway’s November 5 results release.
| Measure | Reported figure | Context | Evidence |
|---|---|---|---|
| Net sales | $436.9 million | Down 5.6% year over year. | Issuer release |
| GAAP continuing-operations income | $48.1 million | Versus a $4.1 million loss a year earlier. | Issuer release |
| GAAP gross margin | 51.9% | Includes about $31.8 million of tariff-refund benefits. | Issuer release |
| Non-GAAP gross margin | 45.0% | Excludes tariff-refund benefits and other stated adjustments. | Issuer release |
| Adjusted EBITDA | $35.9 million | Non-GAAP; up 17.3% year over year. | Issuer release |
Updated outlook remains forward-looking
Callaway increased its 2026 net-sales outlook to $2.065 billion–$2.078 billion and its adjusted EBITDA outlook to $272 million–$280 million. These are management forecasts, not results already earned, and adjusted EBITDA is a non-GAAP measure.
What to watch
The next results will show whether the higher outlook is met and how gross-margin initiatives, sales timing and the exclusion of tariff-refund benefits affect comparable measures. Readers should keep reported and adjusted figures separate when comparing periods.
AI-assisted reporting based on the linked Callaway primary release. No independent human editorial approval is claimed. Information only, not investment advice.