Sales increases of 23 percent in the outdoor segment and 34 percent in the fitness segment in the second quarter ended June 25 allowed Garmin to strengthen its position in the rapidly growing wearables market, helping the company to book a 5 percent increase in total revenues to $812 million. Marine and aviation went up by single digits, but automotive fell by 18 percent.
New product releases helped Garmin to achieve its strong growth in outdoor and fitness.
The fitness segment delivered a gross margin of 56 percent, consistent with a year ago, but its operating margin improved to 25 percent. In outdoor, both the gross margin and the operating margins went up, reaching levels of 64 percent and 36 percent, respectively.
The company saw its gross margin inflate by 2.8 percentage points to 54.2 percent, while the operating margin expanded by 3.2 percentage points to 24.7 percent. Net earnings went up to $161.0 million from $137.1 million.
Upgrading its previous guidance, the management is projecting an operating margin of about 19 percent on sales of about $2.9 billion for the full year.