Garmin Growth Continues – Q1.2024 results show a surge in EMEA and FITNESS

Whilst Garmin’s growth in 2023 hovered around a respectable 10% depending on precisely which aspect of the business you looked at, growth this year is starkly better. Most notably the fitness division reports a whopping 40% increase or $100million more than the first quarter of 2023. Growth in the Outdoor division is similar to times from last year coming in at 11%.

Looking at the regional growth, the Americas perhaps slightly outperformed expectations at +17% but EMEA reported a fantastic 30% increase…again, that’s about $100million in absolute dollar terms.

Despite costs rising, the overall margins were disproportionately higher, resulting in a one percentage point improvement to 58.1% (gross).

Revenue from the fitness segment increased 40% in the first quarter with growth across all categories, led by strong demand for advanced wearables. Gross and operating margins were 57% and 20%, respectively, resulting in $68 million of operating income. During the quarter, we launched the Forerunner 165 Series, providing athletes of all skill levels an affordable running smartwatch with a vibrant AMOLED display and compelling health, fitness and connected features…Revenue from the outdoor segment increased 11% in the first quarter primarily driven by growth in wearables. Gross and operating margins were 66% and 29%, respectively, resulting in $107 million of operating income. During the quarter, we released our annual inReach SOS Year in Review highlighting the importance of Garmin Response, our emergency response coordination center, which coordinates emergency response services in more than 200 countries and territories, and supports rescue efforts in more than 210 languages.  [Premble, CEO, Garmin]

share Price Growth

The share price today jumped at the news by about 7%. Over the last month, Garmin’s share price has outperformed the NASDAQ by over 15%.

Previous Quarters:

Take Out

There seems to be more going on here than the high-level numbers suggest.

It’s unlikely that FR165/Lily and HRM-FIT were the sole causes of the large boost to Fitness products in Q1. Perhaps the previous year’s matching quarter was particularly bad or perhaps much of the growth is accounted for by an unexpected turnaround in the fortunes of European (EMEA) markets which are likely dominated by Germany, the UK and maybe France. Perhaps the Q1 growth came from New Year sales or as a bump from other product releases in Q4.2023?

Something is clearly going right for Garmin.