Boosted by more than $29.6 million in interest income and gains on foreign currency, Garmin posted 11.7 percent net income growth to $287.9 million from $257.9 million. Without the two gains, the group’s profit would have been essentially flat for the period ended July 1. Second quarter operating income fell by 2.9 percent to $284.4 million. Gross margin slipped by 120 basis points to 57.5 percent from 58.7 percent.
Total revenues rose 6.4 percent to $1.32 billion from $1.24 billion in the period, fueled by a 23 percent increase in fitness revenues to $334.9 million. With the Q2 results, Garmin adjusted its FY23 guidance to total revenues of $5.05 billion and pro forma EPS of $5.15.
A closer look at some key segments:
- Fitness – The 23 percent year-over-year sales gain came with growth across all categories, led by strong demand for advanced wearables. The segment, which achieved a 16 percent operating margin, launched the Edge 540 and Edge 840 cycling computers during the period.
- Outdoor – Period revenues fell by 3 percent to $448.1 million as higher adventure watch sales were more than offset by lower sales in other categories. Operating income came in at $138 million with a corresponding operating margin of 31 percent. Segment introduced the Approach S70 premium golf smartwatch during Q2.
- Marine – Sales splashed 11 percent lower to $215.8 million, mainly due to the timing of promotions. The segment produced an operating income of $46 million, which resulted in an operating margin of 21 percent. The trolling motor series was expanded during the period to include a broader range of boats.
