Driven by growth in the outdoor, fitness, aviation and marine segments, Garmin's sales for the first quarter were up by 11 percent from the year-ago quarter to $711 million. In particular, the outdoor and fitness segments delivered double-digit revenue growth, driven by their wearables.
Sales in Garmin's so-called outdoor segment jumped by 24 percent to $144.2 million in the quarter, with significant contributions from the Fenix adventure line of wearables. The gross margin grew by 2 percentage points to 65 percent, while the operating income soared by 27 percent. In the quarter, the company introduced the Tactix Charlie, a tactical-themed GPS wearable, and began shipping the Descent dive watch, its first wearable for the diving market.
In line with the strong performance of the outdoor segment, Garmin's fitness division, which includes Garmin's cycling products, saw sales increase by 20 percent to $166.0 million, driven by advanced wearables. The gross margin increased by 2 percentage points to 58 percent, while the operating income jumped by 81 percent.
During the first quarter, Garmin started shipping its first GPS running watch with integrated music, along with a contactless payment solution called Garmin Pay. It also recently introduced the Edge 130, a compact GPS cycling computer, the Edge 520 Plus, an advanced cycling computer and the Varia RTL510 rearview radar. Both computers allow cyclists to plan and download their route in advance, while bringing connectivity to riders. The updated Varia radar enhances the safety features from the first generation and the new design mounts on most road bikes.
The company hosted its second annual Connect IQ Developer Summit. Garmin continues to believe that its application platform is an important differentiator for its smart wearables, offering more than 3,500 apps, widgets and watch faces. The management said that the momentum behind Connect IQ is accelerating, with more than 54 million downloads to more than 8 million compatible devices shipped since its inception.
Garmin's sales gained 9 percent to $113.5 million in its marine segment, but were down by 12 percent to $141.3 million in the automotive segment, primarily due to the ongoing contraction of the PND (Personal Navigation Device) market. In contrast, the aviation segment rose by 19 percent to $145.7 million.
By region, sales rose by 7 percent to $346.0 million in the Americas, by 9 percent to $245.9 million in Europe and the Middle-East and Africa (EMEA) and by 30 percent to $119 million in Asia-Pacific.
Overall, Garmin's gross margin for the quarter advanced by 1.9 percentage points to 60.0 percent, while the operating margin improved by 1.8 percentage points to 20.0 percent. Adjusted net income, which excludes currency fluctuations and certain tax items, advanced by 29.7 percent to $128.7 million.
Garmin now anticipates revenues of about $3.2 billion for 2018, driven primarily by its outdoor, aviation and marine segments, partially offset by lower expectations for the automotive segment.