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Garmin Q1 revenue up, but decline in ‘basic activity trackers’

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Garmin has announced results for the first quarter ended 1 April 2017, with total revenue in the period up 2% year on year to US$639 million. Garmin’s marine, outdoor, aviation and fitness divisions were collectively up 12% over the prior year quarter and contributed 75% of total revenue. The auto segment recorded revenue decline of 19% in the first quarter of 2017.

Yet, specifically within Garmin’s Fitness division, during the first quarter of 2017, this business unit posted a revenue decline of 3%. According to Garmin, this was driven by lower volume in basic activity trackers partially offset by growth in its advanced wearables with GPS. Gross and operating margins increased year-over-year to 56% and 13%, respectively, resulting in an 11% growth in operating income for Garmin’s Fitness business.

During the first quarter, Garmin launched the Forerunner 935, its most advanced multisport watch with performance monitoring tools; and it introduced the vívosmart 3, an ultra-slim smart activity tracker with wrist based heart rate and all-day stress tracking. Most recently, Garmin expanded its cycling accessories portfolio with the new Varia UT800 high-intensity cycling headlight. Commenting on Q1 2017, Garmin added that ‘While the market for basic activity trackers has matured rapidly over the past year, we continue to see opportunities within the advanced wearable with GPS category and are confident in our product roadmap for the remainder of 2017.’

“We continued our trend of consolidated revenue growth led by double digit growth in our marine, outdoor and aviation segments,” said Cliff Pemble, President and CEO of Garmin. “The fitness segment declined slightly due to the rapidly maturing market for basic activity trackers. However, demand for advanced wearables remains strong. Our product development pipeline is robust and we look forward to launching compelling new products throughout the remainder of the year.”




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