Garmin Revenue up 7% to $624M in Q1 2016

Ludovic Privat

Garmin published last week their financial results for the first quarter of 2016 with a total revenue of $624 million, growing 7% over the prior year, with outdoor, fitness, aviation and marine collectively growing 17% over the year ago quarter and contributing 69% of total revenue.

Gross and operating margins were 54.5% and 16.6%, respectively. Operating income was $104 million.

Fitness devices revenue up 9%
The fitness segment posted revenue of $142 million growing 9% in the quarter (in comparison Fitbit revenue increased 50% in the quarter). On a year-over-year basis, gross margin and operating margin declined to 51% and 12%, respectively.

“The gross margin decline was driven by product mix within the quarter. The operating margin decline reflects the continued investment in advertising and research and development to support our long-term goals in the segment,“ explained Garmin.

Outdoor business up 33%
The outdoor segment posted robust revenue growth of 33% ($97 million).

Sales were “driven by the strength of our fēnix line of wearables as well as our dog products. Our recently introduced Approach S20 and G10, and TruSwing have brought new energy to our golf product line in a challenging industry“.

Gross and operating margins were down from a year ago, but remained strong at 61% and 29%, respectively, and resulted in a 17% increase in operating income.

Within the quarter, Garmin completed the DeLorme acquisition (read here) and will see a full quarter of sales contribution beginning in the second quarter 2016.

Marine revenue up 29%
The marine segment posted a strong revenue growth of 29% ($83 million) on the strength of their chartplotter and fish finder product lines, they pointed out.

Gross margins declined year-over-year to 53% while operating margin increased to 12% .

Aviation business up 8%
The aviation segment posted revenue growth of 8% ($106 million) with both OEM and aftermarket contributing to revenue improvement. Both the gross margin and operating margin were strong at 74% and 29%, respectively,

Automotive and mobile
The auto segment posted a revenue decline of 11% ($196 million).

According to Garmin, this was “primarily due to the ongoing PND market contraction and headwinds caused by additional revenue deferrals.“

Gross and operating margins were 44% and 9%, respectively.

The company also said that they experienced strong growth of their automotive infotainment business within the APAC and Middle East regions. They also delivered production release software for the new 2017 Mercedes E-class.

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