Just five years ago, Topgolf was the hottest thing since prime Tiger Woods winning his first Masters Tournament (in the oversized short sleeve shirt that’s somehow back in style). It was the perfect blend of golf, booze, and competitive fun for all, all set in a lively energetic building off the interstate. A place where you could pretend to be John Daly, while downing overpriced sliders. Well, it turns out, the hype might be fading faster than the blue polo my wife bought me on Temu. 

Topgolf is in trouble, and not the “we’re out of beer” kind of trouble. I’m talking about an 8% drop in sales over the last year and shares slipped 25% in the past week kind of trouble. 

(Source: Motley Fool)

Topgolf wasn’t just aiming to be another driving range; it was supposed to be the ultimate hangout spot. A place where you could launch balls into giant, glowing targets while a DJ keeps the vibe going and a waiter serves up some mediocre nachos. But as it turns out, that experience is starting to feel a little stale for the average golfer, and it's hitting Callaway where it hurts.

Callaway, the golf giant that fully merged with Topgolf in 2021 in a deal that was supposed to make golf fun for everyone, is now between a rock and a hard place. The parent company is reportedly exploring a spinoff of Topgolf to somehow catch up. Visitor numbers are down, the hype has evaporated, and the company’s stock is down a brutal 67% since its 2021 peak.

(Source: Front Office Sports)

Let’s be real. Topgolf is expensive. And when you’re asking folks to pay up for what’s essentially glorified mini-golf with real clubs, you better make sure they’re getting their money’s worth. But with the economy doing its best impression of an episode of Survivor and everyone tightening the budget, shelling out cash to hit rock-like balls into giant dartboards isn’t as appealing as it once was.

Sure, Topgolf tried to keep things fresh with new venues—three new spots this year, with four more under construction—but the numbers don’t lie. Same-venue sales, which track how established locations are performing, dropped 8% in Q2. 

Callaway CEO Chip Brewer, admitted he’s been “disappointed” with Topgolf’s performance, which is like me “I’m a little off my game” after shanking one into the water. And while Brewer is trying to create the narrative that it’s just a short-term” economic cycle, it’s hard to ignore the fact that Topgolf might be getting the yips. So what are they gonna do about it? Well, Callaway is doing a “strategic review,” which is corporate speak for “we’re freaking out and trying to figure out what the heck to do next.” Whether that means selling off Topgolf, doubling down on more new locations, or something else entirely remains to be seen.

One thing’s for sure: Topgolf isn’t the hole-in-one Callaway was hoping for. And if they can’t figure out how to get people back into those swanky driving bays inches from getting hit in the head with a club, it might be time to close up shop and go back to selling bad golfers $500 drivers.