Garmin has announced its results for the quarter ended 28 March 2015. Total revenue stood at US$585 million in the first quarter of 2015 with Garmin’s fitness, outdoor, aviation and marine delivering 63% of total revenue and collectively growing 9% year.
Garmin notes that the relative strength of the US Dollar compared to other major currencies negatively impacted revenue by approximately US$38 million, or 7%, in the first quarter of 2015. Gross margin improved from the prior year to 59% while operating margin remained strong at 19%.
Garmin added that Q1 2015 was notable for its launch of vívofit 2, vívoactive, and f?nix 3, ‘highlighting our continued commitment to a broad product portfolio in the rapidly growing wearables category.’
Continuing a trend in 2014, the fitness segment was again Garmin’s star performer, with net sales of US$131 million in the quarter, and year-on-year growth of 31%. This compares to declines for the outdoor and auto divisions.
Cliff Pemble, Garmin President and Chief Executive Officer said “We were able to deliver solid operating results and consistent pro forma EPS in the first quarter despite the negative impact of a stronger US Dollar compared to other major currencies.
“These results highlight our ability to capitalize on growth opportunities in the near-term while still investing in our market share position and long-term product roadmap through increased advertising and research and development expense. These investments are expected to generate ongoing growth potential in 2015 and future years.”
The 31% revenue growth for Garmin’s fitness segment came via contributions from activity trackers, the recently launched Forerunner 920XT and cycling products. Here, gross margin remained strong at 63%; while operating margin declined to 26%, as Garmin continued to invest in advertising and research and development to drive long-term growth opportunities.
Additions to the vivo family, including vívofit 2 andvívoactive, began shipping late in the first quarter and Garmin expects these new products to reach additional retail channels throughout the second quarter as the wearables opportunity continues to expand.
In cycling, Garmin recently announced Vector 2 and 2S – the latest pedal-based power meters – designed for easy installation and maintenance while delivering advanced cycling metrics.
Indicating the importance of fitness products to its range, the company added that ‘Our broad fitness portfolio has never been stronger, offering products for those just beginning their pursuit of an active lifestyle to elite athletes.’
