Further 3% Slide in Garmin Outdoor Sales
The division that sells Fenix 7, Epix 2, Instinct 2 and handhelds is called OUTDOOR and this quarter has shown a continuing slide in sales (3%) which, when combined with the previous quarter’s dramatic 27% crash, gives a half-year decline of 15%.
Whilst OUTDOOR seems to be struggling, the FITNESS division posted a sweet 23% sales gain.
Overall the company’s bottom line showed a modest increase in profitability.
Caution: In Q1, Garmin split its automotive business into OEM and Consumer with the latter portion now included in OUTDOOR. It’s not possible to determine how the old Fitness division performed however other notes from the company state that sales of adventure watches (Fenix/Epix increased).
Here are other statements (paraphrased) from the company that partially clarify where the growth and decline are likely coming from.
Fitness: Revenue from the fitness segment grew 23% in the second quarter, with growth across all categories led by strong demand for advanced wearables. Gross and operating margins were 52% and 16%, respectively… During the quarter, we launched the Edge 540 and Edge 840 cycling computers.
Outdoor: Revenue from the outdoor segment decreased 3% in the second quarter as growth in adventure watches was more than offset by declines in other categories. Gross and operating margins were 63% and 31%, respectively,
resulting in $138 million of operating income. During the quarter, we launched the Fenix 7 Pro Series, Epix (2) Pro Series, plus the Approach S70 golf watch.
Elsewhere Garmin state they have about $1.5bn of cash-like reserves. Yikes!
Garmin seems to be bucking the recessionary elements in global markets.
My guess would be that consumer automotive is in terminal decline – who prefers an aftermarket Garmin Satnav to their smartphone?
Garmin’s price increases are perhaps not too well reflected in these results yet inflation-impacted costs could be – all the more impressive that the company increased profitability.
New Epix/Fenix/Approach watch sales only started in May and Edge 540/840 in April, Garmin will have included trade sales to retailers in these figures.
We now await the impact of the next tranche of products – perhaps Edge 1050 AMOLED, Edge 150 and Venu 3/3s
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