Garmin’s financial results are a mixed bag with significant highlights and explainable lowlights.
The bad news is that FITNESS revenues fell by a whopping 28%. Garmin explains this as a normalisation of fitness revenues – meaning sales were crazily high last year and, reading between the lines, there were no significant launches in Q1 for Garmin’s FITNESS division (which includes cycling). Indeed, similar sentiments on the end of the cycling boom are echoed today in Shimano’s financial results.
Revenue from the outdoor segment grew a robust 50% in the first quarter primarily due to strong demand for our adventure watches.
Overall the picture is not quite as rosy as it seems for Garmin. Sure it’s awesome in the OUTDOORS (Fenix) sector but is the rest of the company bouncing back as it should after the pandemic? Check out Q1 from last year and Q4.
Looking forward there are more releases to come and, indeed, I expect May and June to see more new products in the FITNESS division with new EDGE and FORERUNNER devices to excite us. (Edge 1040, Edge 1040 Explore, Garmin Forerunner 955, Garmin Forerunner 955 Solar and maybe others too). These will all sell very well but will they recoup the $100m shortfalls from Q1? Possibly not, it’s the OUDOORS’ Fenix 7/Epix 2 that have sold massively. Indeed, they’ve sold so well that some SKUs are still out of stock.
Don’t feel too bad for Garmin though. The statement also says this,
We ended the quarter with cash and marketable securities of approximately $3.0 billion.
Not a bad bank balance at all.
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