Garmin Ltd. posted better-than-expected quarterly results on Wednesday, as demand for its premium wearable devices remained resilient despite a challenging consumer electronics environment.
Strong Financial Performance
The Olathe, Kansas-based company reported first-quarter revenue of $1.48 billion, surpassing the average analyst estimate of $1.42 billion. Adjusted earnings per share came in at $1.53, compared with the expected $1.45, according to data compiled by Bloomberg.
Shares of Garmin rose about 4% in early trading following the announcement, extending gains for the year to roughly 12%.
Wearables Segment Drives Growth
The fitness segment, which includes running watches, cycling computers, and other activity trackers, saw revenue increase 11% year-over-year to $432 million. The outdoor segment, featuring its popular Fenix and Instinct smartwatch lines, grew 9% to $398 million.
"Our focus on innovation and premium positioning continues to resonate with consumers who prioritize health and performance," said Garmin CEO Cliff Pemble in a statement. "We are seeing strong demand across our product lines, particularly for our latest generation of wearables."
Aviation and Marine Segments Also Contribute
Garmin's aviation segment posted a 7% revenue increase to $234 million, while marine segment sales rose 5% to $112 million. The auto OEM segment declined 3% to $304 million, reflecting ongoing supply chain challenges in the automotive industry.
The company's gross margin improved to 58.2% from 57.6% a year earlier, driven by favorable product mix and cost controls. Operating margin expanded to 22.4% from 21.8%.
Positive Outlook
For the full year, Garmin reaffirmed its revenue guidance of $6.0 billion to $6.2 billion, with adjusted earnings per share in the range of $6.00 to $6.20. The company also announced a quarterly dividend of $0.75 per share, up from $0.73 previously.
"Consumer demand for health and fitness tracking remains robust, and Garmin is well-positioned to capitalize on this trend," said analyst James Thompson of J.P. Morgan. "The company's diversified portfolio and strong brand loyalty provide a solid foundation for continued growth."
The results come as competitors like Apple and Fitbit also vie for market share in the wearable space, but Garmin's focus on serious athletes and outdoor enthusiasts has helped it maintain a loyal customer base willing to pay premium prices.
