Garmin has reported total revenue of US$583 million in the first quarter of 2014 with its outdoor, fitness, aviation and marine divisions delivering 58% of total sales and growing 22% on the previous year period. Gross and operating profit margins improved from the prior year quarter to 57% and 21%, respectively.
Garmin’s fitness segment posted revenue growth of 38% in the quarter (significantly outperforming the total business overall, which saw a 10% revenue gain as the company was subdued by a declining automotive division). Garmin cited the Forerunner 620 and 220 as continuing to make strong contributions and a solid mid-quarter launch for vívofit – a new fitness band, in the rapidly growing activity monitoring category.
Garmin’s fitness segment saw both gross and operating margins improved to 64% and 33%, respectively, as mix shifted to new products and sales growth outpaced research and development and advertising growth.
The company noted that it is ‘excited about the strong market reception for our new products and recognize that innovation and design are key to winning and retaining customers in the rapidly growing, but crowded, fitness and wellness markets. We bring years of experience to the market and we are committed to being the leader for both athletes and novices.’
With the athlete in mind, Garmin introduced the Edge 1000 recently. This high-end cycling computer combines ‘best-in-class features of legacy products with a large capacitive touch screen display, real-time competitive segment capabilities and smartphone connectivity.’
While results in the first quarter exceeded the company’s expectations, Garmin noted ‘it is historically the seasonally weakest quarter of the year and much of the year still lies in front of us. Due to these factors, we will update guidance following second quarter as has been our past practice.’
