NEW YORK (TheStreet) -- Shares of Callaway Golf Co. (ELY) are up 1.61% to $7.59 in late morning trade but golf has recently been described as an industry "under pressure and in "structural decline," according to the Financial Times.
For one, Dick's Sporting Goods (DKS) this week took $20 million in charges relating to its golf business, including severance payments for around 500 PGA professionals who helped sell golf equipment in its stores but are now being laid off.
Market researchers Golf Datatech says the number of rounds played in the U.S. dropped 4.9% last year. The fall in the first half of 2014 is 2.1%. Similar slumps have been hitting golf's other big market, the U.K., the Times said.
That decline is the reason for sluggish golf sales, down 3.5%t in the first half to $1.4 billion, according to Golf Datatech. The most worrying trend is the slump in the sale of woods, down 14%.
Equipment manufacturers have exacerbated the problem by pushing too many models into the market, analysts say. New ranges of woods used to come on sale once a year, but some brands are speeding up this cycle.
TheStreet Ratings team rates CALLAWAY GOLF CO as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CALLAWAY GOLF CO (ELY) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, increase in stock price during the past year and expanding profit margins. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive."