Fitness segment revenue grew by nearly $28 million, or 38 percent, to $100.3 million in the 13 weeks ended March 29 with the Forerunner 220 and 620 continuing to make strong contributions and a solid mid-quarter launch for vivofit (shown at right). Both gross and operating margins improved to 64 percent and 33 percent, respectively, as mix shifted to new products and sales growth outpaced research and development and advertising growth.
"We are excited about the strong market reception for our new
products and recognize that innovation and design are key to winning and
retaining customers in the rapidly growing, but crowded, fitness and
wellness markets," said Cliff Pemble, Garmin's president and CEO. "We
bring years of experience to the market and we are committed to being
the leader for both athletes and novices."
Pemble said Garmin expects its recently introduced Edge 1000
cycling computer to also perform strongly. The high-end device combines
best-in-class features of Garmin¡' legacy products with a large
capacitive touch screen display, real-time competitive segment
capabilities and smartphone connectivity.
At Garmin¡'s Outdoor segment, revenue grew 10 percent in the
quarter with all major categories contributing to growth. Gross and
operating margins within the segment remained strong at 61 percent and
28 percent, respectively.
"We continued to build on our broad portfolio of outdoor products
with the introduction of the fenix 2 and the PRO series of dog collars
in the quarter," said Pemble. "Fenix 2 builds off the success of its
predecessor with the addition of advanced fitness training features and
smartphone connectivity. The PRO series of dog collars takes proven
Tri-Tronics design and offers new functionality for the sport dog
market. In addition, we launched advertising and sponsorships to support
the VIRB action cameras. We are determined to win market share in the
category with our innovative products and future enhancements."
Garmin Ltd. And Subsidiaries
Revenue, Gross Profit, and Operating Income by Segment (Unaudited)
Reporting Segments
Auto/
Outdoor Fitness Marine Mobile Aviation Total
13-Weeks Ended Mar 29, 2014
|
Net sales
|
$83,985 $100,288
|
$60,002
|
$242,952
|
$95,994
|
$583,221
| |
|
Gross profit
|
$50,910
|
$64,085
|
$31,053
|
$113,791
|
$70,995
|
$330,834
|
|
Operating income
|
$23,683
|
$33,512
|
$3,810
|
$30,564
|
$28,800
|
$120,369
|
|
13-Weeks Ended Mar 30, 2013
|
| |||||
|
Net sales
|
$76,165
|
$72,437
|
$50,296
|
$252,589
|
$80,470
|
$531,957
|
|
Gross profit
|
$44,475
|
$44,968
|
$23,347
|
$107,120
|
$56,223
|
$276,133
|
|
Operating income/(loss)
|
$21,588
|
$19,892
|
($2,440)
|
$20,032
|
$20,854
|
$79,926
|
Garmin Ltd. And Subsidiaries Revenue by Geography (Unaudited)
13-Weeks Ended
|
|
Mar 29,
2014
|
Mar 30,
2013
|
Yr over Yr Change
|
|
Net sales
|
$583,221
|
$531,957
|
10%
|
|
Americas
|
304,808
|
285,813
|
7%
|
|
EMEA
|
220,603
|
190,775
|
16%
|
|
APAC
|
57,810
|
55,369
|
4%
|
Total operating expenses in the quarter were $210 million, a 7 percent increase from the prior year. Research and development investment increased 10 percent driven by aviation, fitness and outdoor growth to support new product initiatives while marine and automotive/mobile declined. Advertising also increased 10 percent as Garmin launched campaigns to support new products in outdoor and marine. Selling, general and administrative expense increased by 4 percent, but declined as a percentage of sales in the quarter.
Pemble said that while results in first quarter exceeded
management's expectations, it is historically the seasonally weakest
quarter of the year.
"Much of the year still lies in front of us," Pemble said. "Due to
these factors, we will update guidance following second quarter as has
been our past practice."
By press release
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