Garmin is currently forecasting 10 percent revenue growth in 2022 to $5.5 billion, driven by new product introductions and strong market trends in at least three of its operating segments. The company reported a 14.2 percent decline in fourth-quarter net income to $286.1 million from $333.5 million for the period ended Dec. 25, while total revenues rose by 3.0 percent to $1.39 billion from $1.35 billion. The quarterly operating income was down 15.1 percent to $315.1 million.

The results were impacted by higher freight costs and the favorable impact of foreign exchange rates. Regionally, only the EMEA posted lower sales, down 2 percent to $528 million. Sales in the Americas (+5 percent) and APAC (+8 percent) were higher. Category-wise, aviation, auto and marine each recorded double-digit sales gains while fitness was flat and outdoor (-8 percent) was down.

The company’s president and CEO, Cliff Pemble, told analysts: “The nuances of individual categories are not a major concern…rather, it’s our strategic focus on diversification that brings many opportunities for growth which is the basis for our outlook for 2022.”

Annual investments will focus largely on Garmin’s Taiwanese manufacturing facilities, the ongoing renovation of its Olathe, Kansas, operation to increase workspace capacity and IT-related projects. The Swiss-based company will seek approval to raise its quarterly cash dividend to $0.73 per share starting in June.

In 2021, as all segments reported double-digit sales increases, net income rose by 9.1 percent to $1.08 billion. The operating income was 15.6 percent higher at $1.22 billion as total revenues grew 19.0 percent to approach the $5 billion mark at $4.98 billion. EMEA sales rose by 18 percent to nearly $1.86 billion, and the Americas (+19 percent) and APAC (+21 percent) still had higher revenue gains. Year-end inventories were up 61.1 percent year-over-year to nearly $1.27 billion, a factor Garmin attributed to preparation for first-quarter product launches, more indoor cycling products, the expansion of the global manufacturing footprint and the execution of its strategy to support increasingly diversified product lines. The inventory balance is forecast to rise further this year as the company carries a sufficient level of safety stock to ease increased lead times and manage its supply of raw materials. Garmin is also looking at a combination of broad price increases and resetting pricing where possible when new products are introduced.

A closer look at some key Garmin segments:

Fitness: 2021 full-year category revenues rose 16 percent to $1.53 billion on-demand for both advanced wearables and cycling, although they were flat in the final quarter at $470 million. Growth in advanced wearables offset lower sales of cycling products after the latter were thriving over the last two years due to pandemic-driven demand. A tough comparison will mean lower first-half sales for the segment in 2022, but the growth is forecast to return in the second half with contributions from new products and a stabilized cycling market.

Outdoor: Component constraints limiting order fulfillment on traditional handhelds and dog-related products contributed to an 8 percent drop in fourth-quarter revenues to $378 million. Annual segment sales were up 14 percent to $1.28 billion. There were “unusually high back orders” at year-end that were pushed into 2022. Garmin is making sweeping changes to its Fenix adventure watch series.

Marine: Revenues grew by 14 percent in the final period to $196 million and were up 33 percent for the year to $875 million. In the fourth quarter, numerous new products were launched, including the GMR Fantom range and the GPSMAP 79 marine handheld series. Pemble said enthusiasm around new marine items extends to fishing with advanced sonars in demand, also by those returning to the activity. That sales momentum is expected to continue in 2022.