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Cycling product sales slump partially responsible for Garmin Q2 decline

Published July 27, 2022

OLATHE, Kan. (BRAIN) — Decreased demand in cycling and advanced wearable products led to a 6% year-over-year revenue decline for Garmin Ltd. in the second quarter.

Overall, Garmin's Fitness segment revenues declined 34%, from $413 million a year ago to $272 million for the period that ended June 25. That led to Garmin's second-quarter revenues dropping from $1.32 billion last June to $1.24 billion this year.

Garmin's cycling products include GPS head units and accessories, power meter pedals, and Tacx stationary trainers.

"Markets continue to normalize following two years of pandemic-driven growth, and we also face additional headwinds, including the relentless strengthening of the U.S. dollar, high inflation, and rising interest rates," said Cliff Pemble, Garmin president and CEO. "While we must adjust expectations, we believe that our lineup of innovative products and strategy of diversification will allow us to remain strong in an evolving economic environment."

First-quarter net income decreased 19%, from $317 million to $258 million. Earnings per share also fell 19%, from $1.65 to $1.34.

Garmin's Outdoor segment — consisting of GPS watches, handhelds, satellite communicators, and dog training equipment — grew 18% during the quarter, primarily because of adventure watch demand.

The Aviation segment had a 13% revenue jump year-over-year, while the Marine (7%) and Auto (6%) segments declined.

Garmin's corporate headquarters is in Olathe. Its stock is traded on the NASDAQ under the GRMN symbol. Stock quote at Marketwatch.com.

Topics associated with this article: Earnings/Financial Reports

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