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Garmin’s Stellar Profits
Garmin has just recently reported excellent figures covering the Christmas period and posted over one billion dollar profits for the full year.
These results must surely put any lingering doubts to bed about what kind of company Garmin is. Back in 2007, Garmin got 73.6% of revenue from automative and that figure is now 10.4% (Q4.2020). Aviation and Marine are currently important to Garmin but now 65% of revenue comes from the combined fitness and outdoors sectors and much of that is the sports-related tech that I regularly talk about here.
Garmin’s (edited) statement says this
Executive Overview from Cliff Pemble, President and Chief Executive Officer:
……“Strong demand for active lifestyle products fueled our growth, and we expect these trends to continue into 2021. …”
Revenue from the fitness segment grew 26% in the fourth quarter driven by strong demand for advanced wearables and cycling products. Gross margin and operating margin were 53% and 27%, respectively, resulting in 75% operating income growth. During the quarter, we launched the Tacx Boost, a powerful indoor trainer that is easy-to-use and features a magnetic brake, realistic ride-feel and manual resistance control for cyclists of all levels.
Revenue from the outdoor segment grew 40% in the fourth quarter across all categories led by strong demand for adventure watches. Gross margin and operating margin were 66% and 43%, respectively, resulting in 55% operating income growth.
Garmin’s share price fell around the time of the news release however this was probably in line with a similar fall in the NASDAQ at the same time.
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