Garmin’s Impressive Growth Continues

Garmin has just recently reported excellent Q2 figures for the fitness and outdoors segments.

Although the percentage growth rate is not as high as in parts of previous years, almost all companies would be delighted with the c40% YoY growth that Garmin has achieved. Once again, the combined Fitness and Outdoors segments now account for over half a billion dollars of sales for the quarter in question. Probably by the end of 2021, those two segments will have combined sales of a billion dollars. Wow !

Garmin’s (edited) statement says this

Executive Overview from Cliff Pemble, President and Chief Executive Officer:

Fitness:

Revenue from the fitness segment grew 40% in the second quarter driven by strong demand for our cycling and advanced wearable products. Gross margin and operating margin were 54% and 28%, respectively, resulting in 62% operating income growth. During the quarter, we launched the Forerunner 945LTE, bringing safety and real-time tracking features to our premium GPS running smartwatch. This watch is designed to allow runners to send for help, if necessary, and stay connected without their phones. In addition, we celebrated Global Running Day with the launch of the Forerunner 55, an easy-to-use smartwatch that encourages runners of all skill levels to get out and run.

Outdoor:

Revenue from the outdoor segment grew 57% in the second quarter with growth across all categories led by strong demand for adventure watches. Gross margin and operating margin were 64% and 38%, respectively, resulting in 81% operating income growth. During the quarter, we launched Descent Mk2S, a stylish smartwatch featuring multiple dive modes, multisport training and smart features…

 

This was a relatively unusual quarter for Garmin when we look at new product releases…there weren’t many! Maybe that’s a covid hangover from last year or chip shortages, who knows? But one thing you can be sure of is that there are more to come this year. Think about it, with results this good would you be pressurised into early product launches?

Even worse news for the competition comes when you look at Garmin’s R&D. In a nutshell: there is a LOT of it. That investment keeps them ahead in many areas and keeps new products and features coming for us and all that whilst still making 60% margins, there or thereabouts.

Here are some financials if that’s your thing:

And some more

Garmin’s share price rose slightly around the time of the news release and superficially to me that seemed to buck a flat market performance of the NASDAQ. ie it’s good for Garmin.

Source: Garmin.com