Garmin ((GRMN)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Garmin’s recent earnings call painted a picture of robust growth and strategic challenges. The company celebrated record third-quarter revenue and raised its annual EPS guidance, driven by strong performances in the Fitness, Marine, and Aviation segments. However, concerns were noted in the Outdoor and Auto OEM segments, alongside a decline in gross margin.
Record Third Quarter Revenue
Garmin reported a consolidated revenue increase of 12%, reaching nearly $1.8 billion, setting a new third-quarter record. This growth was fueled by strong double-digit revenue increases in three of its business segments.
Fitness Segment Growth
The Fitness segment saw a remarkable 30% revenue increase, totaling $601 million. This surge was largely driven by heightened demand for Garmin’s advanced wearable devices.
Marine Segment Performance
The Marine segment experienced a 20% revenue boost to $267 million. This growth spanned multiple categories, and Garmin was recognized as Manufacturer of the Year for the 11th consecutive year.
Aviation Segment Growth
Aviation segment revenue grew by 18% to $240 million, with contributions from both OEM and aftermarket product categories fueling this expansion.
Raised Annual EPS Guidance
Garmin increased its full-year EPS guidance to $8.15, up from $8.00, reflecting confidence in its financial trajectory.
Outdoor Segment Revenue Decline
The Outdoor segment faced a 5% revenue decline to $498 million, attributed to product release cycles and the anniversaries of successful product launches.
Auto OEM Segment Challenges
Revenue in the Auto OEM segment decreased by 2% to $165 million, with an operating loss of $17 million due to increased accrued warranty costs.
Gross Margin Decline
Garmin’s gross margin fell to 59.1%, down 90 basis points from the previous quarter, impacted by higher product costs and tariffs.
Forward-Looking Guidance
Garmin provided an optimistic outlook for the remainder of the year, anticipating double-digit growth in revenue, operating income, and EPS. The company expects to achieve a full-year revenue target of $7.1 billion, driven by strong market demand and new product introductions, despite challenges in certain segments.
In summary, Garmin’s earnings call highlighted a strong financial performance with record revenues and raised guidance, despite facing challenges in specific segments. The company’s strategic focus on innovation and market expansion positions it well for continued growth.