Bolstered by double-digit percentage growth in revenue, operating income and net income and record Q3 sales in four of five segments, Garmin reported a 12.9 percent increase in operating income to $270.4 million for the period ended Sept. 30 as net income came in 22.0 percent higher at $257.2 million versus $210.8 million in the year-ago period. Gross margin slid 180 basis points to 57.0 percent from 58.8 percent. Total sales increased by 12.0 percent to $1.28 billion from $1.14 billion. Geographically, sales were up by double-digits in all regions except for APAC. EMEA total sales rose by 15 percent to $439.1 million as Americas’ revenues grew by 12 percent to $628.2 million year-over-year. APAC sales lifted 8 percent higher to $210.3 million.
With the results, the group adjusted its FY23 guidance to revenues of $5.15 billion, an operating margin of 19.8 percent, a gross margin of 56.7 percent and pro forma EPS of $5.25.
Results of Garmin’s key segments:
- Fitness – A strong demand for wearables contributed to 26 percent sales growth to $353.0 million. Operating income was 83 percent higher year-over-year at $74.6 million. Gross margin grew to 54.0 percent from 52.8 percent in the year-ago period, and the segment operating margin was 21.0 percent. The segment recently announced the expansion of the ECG App to additional smartwatches.
- Outdoor – Period operating income rose by 10.9 percent to $136.4 million on 7 percent revenue growth to $434.0 million. Sales growth was across all categories, led by adventure watches. Gross margin improved to 62.4 percent from 49.1 percent in the year-ago period.
- Marine – Operating income dipped 46.9 percent lower to $23.9 million on a 7 percent drop in sales to $182.2 million. During the quarter, the segment launched the GPSMAP 900 series in multiple sizes, with the 27-inch GPSMAP 9227 recognized with an innovation award at the International Boatbuilders’ Exhibition.
