Moody’s views TaylorMade negatively

Moody’s Investors Service said it revised its outlook for 19th Holdings Golf, LLC (TaylorMade) to negative from stable and affirmed the B ratings on the company and its backed senior secured first-lien term loan.

“The change to negative outlook reflects TaylorMade's very large debt balance, high leverage, and meaningful interest burden that position the company weakly within the rating and create dependence on an earnings recovery to reduce leverage and restore positive free cash flow.

“The outlook also reflects that slow economic growth and tight discretionary consumer spending create risk that demand for TaylorMade's golf equipment and free cash flow generation will not recover as expected,” Moody’s said in a press release.

The agency said it expects TaylorMade’s sales and EBITDA will improve about 4% to 5% year-over-year in 2024 after falling an estimated 11.8% and 7% respectively in 2023, which forecast includes projected year-over-year earnings improvement in the fourth quarter of 2023. Moody's also forecasts that debt-to-EBITDA leverage will decline to 3.8x by year-end 2024 from 4.3x for the 12 months ended Sept. 30, 2023

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