Garmin has reported total revenue of US$722 million in its fiscal 2016 third quarter, growing 6% over the prior year – with fitness, outdoor, marine and aviation collectively growing 24% over the prior year quarter and contributing 70% of total revenue.
Gross margin expanded to 56.2% compared to 53.3% in the prior year quarter, and operating margin expanded to 22.1% compared to 18.5% in the prior year quarter. GAAP EPS was US$0.66, a 5% improvement over the prior year quarter, and pro forma EPS was US$0.75, a 47% improvement over the prior year quarter.
Cliff Pemble, President and Chief Executive Officer at Garmin said, “Our strong year continued in the third quarter of 2016, reporting solid results with four of our five business segments delivering double digit sales growth and increased profitability.
“We are excited to see the continued positive customer reception of our fitness and outdoor wearables. Aviation and marine also achieved impressive double-digit growth on strong product offerings. We are maintaining our focus on innovation, diversification and market expansion to drive further growth opportunities in all business segments. Given the strong revenue and margin performance in the third quarter, we are raising our revenue and EPS guidance for the full year.”
Garmin’s fitness segment posted strong revenue growth of 32% in the quarter driven by wrist heart rate wearable devices and cycling. Gross margin increased year-on-year to 55%, while operating margin improved to 24% resulting in a 68% growth in operating income.
During the quarter, Garmin began shipping both the recently announced Forerunner 35, bringing Garmin Elevate wrist based heart rate technology to an ‘affordable, sleek, easy-to-use GPS device’, and vívofit jr, Garmin’s first kid inspired activity tracker featuring a ‘comfortable design, one+ year battery life and a parent controlled mobile app created to help motivate kids to stay active’.
