Garmin's revenues for the quarter ended on Sept. 30 reached a record level of $934 million, an increase of 15 percent over the quarter a year ago. The company has raised its outlook for the full-year as a result.
In the fitness division, Garmin's sales climbed by 28 percent to $243.1 million, driven primarily by growth in wearables and contributions from the Tacx brand of cycling accessories, best known for its line of indoor smart trainers, which it recently acquired. The gross margin declined by 2 percentage points in the segment to 52 percent, while the operating margin remained flat at 20 percent.
At the recent IFA fair in Berlin, which is Europe's leading consumer electronics trade show, the group announced an update to its line of consumer wearable products, including new versions of the Vivoactive series in two sizes, the Vivomove 3 hybrid smartwatch series and the new Venu smartwatch featuring an Amoled color touchscreen display, comprehensive health and fitness features and long battery life. It also announced the Tacx Neo 2T smart trainer, featuring enhanced drive design and performance analytics to stimulate an outdoor ride.
Meanwhile, Garmin's outdoor segment rose by 23 percent to $258.3 million, driven by higher sales of golf wearables, with growth in multiple product categories, led by adventure smartwatches. The gross margin gained one percentage point to 66 percent, while the operating margin jumped by 3 percentage points to 41 percent, resulting in strong operating income growth for the segment.
At the recent UTMB trail running event, Garmin launched the Fenix 6 adventure smartwatch series, with larger displays and innovative performance features. It also introduced the Fenix 6X Pro Solar, the first of its kind with solar harvesting technology. The management highlighted the success of its inReach technology, a satellite-based messaging service, which recently passed a milestone, helping in over 4,000 SOS incidents since its launch in 2011.
The company's aviation and marine segments went up by 28 percent and 9 percent, respectively, while the auto segment declined by 17 percent.
Overall, the group's gross margin improved by 1.3 percentage points to 60.7 percent, while the operating margin progressed by 3.8 percentage points to 28.0 percent. Net earnings increased by 23.7 percent to $227.9 million.
Because of its strong performance, Garmin is projecting a full-year operating margin of 22 percent, instead of the previously forecast 21.5 percent. It has maintained its guidance for revenues of 3.3 billion.