Acushnet delivered a solid second quarter, with worldwide net sales of $720 million up 5% and adjusted EBITDA of $143 million up $12 million (about 9%), lifting first-half sales to $1.42 billion (up 3%) even as 1H adjusted EBITDA slipped 1% on business investments. Growth was led by Titleist golf equipment (up 6% on Pro V1 and GT Metals) and golf gear (up 7%, Club Glove travel brands up 20%), while FootJoy fell 2% by design as it shifted toward premium performance footwear with improved profitability. Regionally, the US and EMEA (up 6%, UK rounds up 20%) were strong, while Japan and Korea declined 4% and 3.5% on soft apparel and footwear; Q2 gross margin rose 40 bps to 49.2%. Management declined to update full-year guidance given tariff and consumer uncertainty but guided 2H net sales up low single digits across all segments, cut FY CapEx to about $70 million from $85 million, and flagged roughly $3 million of 2H tariff costs (mitigating over 50%). Tone was confident, emphasizing healthy golf participation, the dedicated golfer, a strong new-product pipeline (T Series irons), and continued capital return of about $154 million through June.
Good morning, everyone. Thank you for joining us today for Acushnet Holdings Corp.'s second quarter 2025 earnings conference call. Joining me this morning are David Maher, our President and Chief Executive Officer, and Sean Sullivan, our Chief Financial Officer. Before turning the call over to David, I would like to remind everyone that we will be making forward-looking statements on the call today. These forward-looking statements are based on Acushnet's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations. For a list of factors that could cause actual results to differ, please see today's press release, the slides that accompany our presentation, and our filings with the U.S. Securities and Exchange Commission. Throughout this discussion, we will make reference to non-GAAP financial measures, including items such as net sales on a constant currency basis and adjusted EBITDA.
Explanations of how and why we use these measures and reconciliations of these items to the most directly comparable GAAP measures can be found in the schedules, in today's press release, the slides that accompany this presentation, and in our filings with the U.S. Securities and Exchange Commission. Please also note that references throughout this presentation to year-on-year net sales increases and decreases are on a constant currency basis unless otherwise stated, as we feel this measurement best provides context as to the performance and trends of our business. When referring to year-to-date results or comparisons, we are referring to the six-month period ended June 30, 2025, and the comparable six-month period in 2024. With that, I'll turn the call over to David.
Thanks, Sondra, and good morning, everyone. We appreciate your interest in Acushnet Holdings. The sport and business of golf continue to be vibrant and healthy. Per the National Golf Foundation's read on the U.S. market, 1.5 million new golfers entered the sport in 2024, marking the seventh consecutive year-on-year increase. These gains contributed to resilient participation results with worldwide rounds of play in the first half projected to be up 2%, despite some of the weather-related volatility we have experienced in the U.S. Acushnet . continues to benefit from our focus on the game's dedicated golfer, whose healthy demographic and deep commitment to the sport help to offset some of the macro uncertainties consumers are facing. With that, I am pleased to report on a solid quarter and first half for Acushnet., led by our momentum in Titleist golf equipment and steady growth in the U.S.
and EMEA regions. Moving to slide four, you see our second quarter and first half results. For the quarter, Acushnet. delivered worldwide net sales of $720 million, a 5% increase over last year, driven by the strength of our golf equipment and gear segments, which contributed to a 9% year-over-year increase in adjusted EBITDA. For the half, net sales of $1.42 billion were up 3%, while adjusted EBITDA of $282 million was down 1%, in line with our expectations as we make several investments across our business with a long-term focus on golf equipment innovation and our technology and golfer connection platforms. Getting to our segment results, golf equipment sales were up mid-single digits in the quarter and first half, led by the success of new Pro V1 golf ball models and strength within our GT Metals and Hybrid franchise.
Titleist golf equipment sales were up in all regions for the half, led by the U.S. and EMEA. Compared with the first half of 2023 and a similar product launch cycle, equipment revenues are up 10%. The Titleist golf ball business is well-positioned for the back half of the year as our team keeps pace with healthy demand and activates our golf ball fitting initiatives in all markets. On the club side, we're excited about our new T Series irons, which were launched last month. This innovative new product lineup delivers enhanced performance and feel, and while early, initial response is meeting our high expectations. Within our golf equipment business, we are confident in the strength and diversity across our supply chain, with golf balls benefiting from our two production facilities in the U.S. and a third in Thailand.
Our ability to assemble golf clubs in most major regions also provides flexibility as we navigate evolving tariff policies. Moving to gear, this business is healthy, with sales increasing 7% in the second quarter and 6% for the first half. The core Titleist bag, glove, and headwear categories grew mid-single digits, while our travel brands, led by Club Glove, grew more than 20%. Our FootJoy business was off 2% in the quarter and 4% in the half. These results were in line with our expectations as we shift towards a higher concentration of premium performance footwear, led by Premier, HyperFlex, and Quantum golf shoes. At the same time, we have reduced discounted closeout volumes and elevated our entry-level price points across the brand. We are pleased with FootJoy's market positioning, product lineup, and sell-through trends, and as you will see in our financials, these are positively impacting FootJoy's operating results.
Lastly, products not allocated to a reportable segment also posted steady growth in the half, led by double-digit gains from our shoes, outerwear, and apparel business, which continues to build nice momentum. Now looking at our regional results, you see ongoing strength from our U.S. business despite rounds of play being down slightly due to unfavorable weather. The EMEA was up 6% in the first half, reflecting gains in Titleist golf equipment, primarily golf balls, as well as golf gear. The region is benefiting from outsized growth in the U.K., where rounds of play are up 20% through June. Revenues in Japan and Korea are off 4% and 3.5%, respectively. As noted on our last call, we are pleased with our equipment growth in these countries, but the markets for apparel, footwear, and gear have been relatively soft.
We expect our business in these regions to stabilize in the back half of the year. In summary, golf industry fundamentals are in good shape, and we are pleased with our new product pipelines and the overall health of our business as we look to the future. As always, we appreciate the good work of our associates and supportive partners. While Acushnet is not immune to macro uncertainties, we are confident in our ability to effectively manage all that is in our control as we seek to deliver the highest quality products and services to dedicated golfers and, in turn, grow, invest in our future, and return capital to shareholders. Thanks for your interest this morning. I will now pass the call over to Sean.
Thank you, David. Good morning, everyone. We had a solid second quarter and strong first half to start 2025. Second quarter net sales were up 5%, and adjusted EBITDA was $143 million, up $12 million from last year's second quarter. For the first half of 2025, net sales increased 3%, and adjusted EBITDA decreased 1%, in line with our expectations. Net sales growth in the second quarter was driven by continued strength in our Titleist golf equipment segment, up 6% in the quarter, behind the continued momentum of our latest Pro V1 golf balls launch and GT Metals success. Gross profit in the second quarter of $354 million was up $21 million compared to 2024, driven by increases in the Titleist golf equipment, golf gear, and FootJoy golfwear segments.
The increase in Titleist golf equipment was primarily driven by higher sales volumes and higher average selling prices, partially offset by mix. Increased sales volumes and lower distribution costs were the primary drivers in golf gear. In FootJoy golfwear, the increase was driven by lower manufacturing costs and a favorable product mix, including less closeout sales. Also impacting gross profit in the second quarter was approximately $5 million of costs related to the recently implemented tariff policies. Second quarter gross margin of 49.2% was up 40 basis points versus prior year, while first half gross margin of 48.6% was consistent with last year. SG&A expense of $222 million in the quarter increased $14 million from 2024 as we continue to invest in our fitting network, IT systems, and A&P to support new product launches and future growth.
During the second quarter, the company initiated a voluntary bridge-to-retirement program to reduce operating costs and bridge long-tenured eligible employees to retirement. As a result, SG&A expense includes restructuring costs of $6.4 million related to this program. For the second half of the year, we are expecting approximately $7 million of additional charges related to this program. Interest expense of $15 million in the quarter was up $1 million due to increase in borrowings, partially offset by a decrease in interest rates. Our effective tax rate in Q2 was 19.9%, down from 23.2% last year, primarily driven by a shift in our jurisdictional mix of earnings. Moving to our balance sheet and cash flow highlights, the strength in our balance sheet and cash flow supports the continued execution of our capital allocation strategy. Our focus remains on investing in the business to support long-term growth and returning capital to shareholders.
Our net leverage ratio at the end of Q2, using average trailing net debt, was two times. Inventories were up 11% when compared to last year's second quarter, reflecting the advancement of inventory ahead of tariff deadlines and the impact of our iron launch. Overall, we are comfortable with our inventory quality and position. First half cash flow from operations decreased from the first half of 2024, primarily due to an increase in cash used to fund working capital. Capital expenditures were $25 million in the first half of 2025, and we now expect full-year 2025 CapEx spend to be approximately $70 million rather than the $85 million previously stated. Through June, we returned roughly $154 million to shareholders, with $125 million in share repurchases and $29 million in cash dividends.
Today, our Board of Directors declared a quarterly cash dividend of $23.50 per share, payable on September 19th to shareholders of record on September 5th, 2025. On July 10th, we repurchased approximately $953,000 shares of our common stock from Magnus for an aggregate of $62.5 million in satisfaction of our previously disclosed obligations under our share repurchase agreement. While the game of golf is healthy and dedicated golfers' demand for our products is strong, we continue to operate with caution given tariffs and their potential impact on consumer spending. For these reasons, similar to our Q1 call, we're not going to formally update our full-year guidance at this time, but instead provide some color around the second half of the year as we see it today.
During the second half of 2025, we expect net sales to be up low single digits, taking into account a full-year FX headwind of approximately $5 million as compared to last year. The second half quarterly cadence is expected to align with our historical seasonality. We anticipate net sales growth across all segments, driven by the continued strength of golf equipment, while FootJoy continues to execute on their premium performance strategy. The situation remains very fluid, and we continue to closely monitor developments in the dynamic tariff landscape and broader macroeconomic environment. Based on the recently announced tariff rates and agreements, we expect to have an estimated impact of approximately $3 million in the second half of the year, in addition to the $5 million impact in the first half of 2025.
Our mitigation efforts include optimizing our supply chain footprint, vendor sharing programs, selective pricing actions, and cost reduction initiatives such as the bridge-to-retirement program. As a result, we estimate mitigating greater than 50% of the tariff impact in the second half. Overall, we are very pleased with our first half performance and remain focused on executing our long-term strategic priorities. With that, I will now turn the call over to Sondra for Q&A.
Thank you, Sean. Operator, could we please open the line for questions?