Garmin Q2.2020 Fitness Revenues UP

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Official Garmin revenue figures for the quarter have been published and show a static corporate headline sales figure but the FITNESS segment of Garmin’s business showed STRONG growth in Q2 despite CV19. Interestingly FENIX sales are reported in the OUTDOOR segment and that didn’t perform so well but these figures will show virtually no positive impact arising from the release of the Fenix SOLAR models. In the commentary that was released with the figures, Garmin also notes the acquisition of Firstbeat and release of the Edge 1030 Plus/Edge 130 Plus.

Apart from an interesting 3% spike in the share price today there is no that much of interest by looking at the share price. When I looked at the market movements and Garmin stock movements a couple of days back they seemed to be in line with each other yet over the last 5 days, below, Garmin’s share price has slightly underperformed the NASDAQ (comparison not shown).

Takeout: Like most companies, Garmin is being hit by CV19. However, its sector-diversified portfolio has enabled it to offset losses elsewhere with big gains in Fitness. I wouldn’t bet on there being any material fall out (financial or otherwise) from the recent hacking-debacle and would better describe that as ‘an annoying storm in a tea-cup‘. One new thought sprang to mind about the acquisition of Firstbeat which should boost the profitability of the Garmin devices that use that functionality, perhaps offsetting some of the negative margin pressures from the inclusion of TACX profits (lower margin).

It will be interesting to see the impact of SOLAR on next quarter’s figures and interesting too to see what new Forerunner/Fitness products await us to keep the growth in Garmin’s biggest segment continuing.

Elsewhere, Spotify figures were very recently published and also showed growth at the top end of that company’s expectations.

Source: GarminSpotify

Minor Correction: Guidance was removed last quarter





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