Garmin Ltd. Reported that its Fitness segment posted revenue growth of 31 percent in the first quarter, but that its Outdoor segment turned in another disappointing performance.

Fitness gross margin remained strong at 63 percent while operating margin declined to 26 percent, as Garmin continued to invest in advertising and research and development to drive long-term growth opportunities. The results included contributions from  activity trackers, its recently launched Forerunner 920XT and cycling products.

Additions to the Vivo family, including Vívofit 2 and Vívoactive, began shipping late in the first quarter and Garmin expects them to reach additional retail channels throughout the second quarter as the wearables opportunity continues to expand.

In cycling, Garmin announced Vector 2 and 2S – the latest pedal-based power meters – designed for easy installation and maintenance while delivering the most advanced cycling metrics.

“Our broad fitness portfolio has never been stronger, offering products for those just beginning their pursuit of an active lifestyle to elite athletes,” said Garmin President and CEO Cliff Pemble..

Outdoor segment disappoints ahead of Virb relaunch

The outdoor segment posted a revenue decline of 10 percent in the quarter, falling short of  expectations. Though revenue declined, gross and operating margins within the segment were strong at 66 percent and 31 percent, respectively.

“While outdoor started slowly in 2015, we do anticipate improvement in the second quarter as we are experiencing robust demand for the  Fēnix 3 and as we launch additional new products within the segment,” Pemble continued. “In April, we announced the Virb  X and XE which will begin to ship in the second quarter.”

The new Virb action cameras focus on delivering a data-rich experience for the user with embedded sensors capturing speed, altitude, and many other metrics. The G-Metrix data is then seamlessly incorporated into the video utilizing Virb Edit software, which offers robust features and capabilities in an easy-to-use platform.

“This hardware and software combination, along with enhanced mobile application featuring on-the-go mobile video creation, offer a superior user experience that we believe will help us gain momentum in the action camera market and further broaden our revenue base in the outdoor segment,” Pemble continued.

Garmin, which also operates Aviation, Marine and Auto segments, said it is maintaining the guidance it issued in February, which calls for of approximately $2.9 billion of revenue in 2015 and approximately $3.10 of pro forma EPS.

Garmin Ltd. And Subsidiaries
Net Sales, Gross Profit, and Operating Income by Segment
(Unaudited)



















 



Reporting Segments



















 



Outdoor

Fitness

Marine

Auto

Aviation

Total



















 
13-Weeks Ended March 28, 2015




































 

Net sales



$75,915



$130,994



$64,297



$216,126



$98,062



$585,394

Gross profit



$50,220



$83,075



$35,513



$103,803



$71,511



$344,122

Operating income



$23,834



$34,638



$4,566



$22,480



$26,180



$111,698



















 
13-Weeks Ended March 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



















 

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Garmin Ltd. And Subsidiaries
Net Sales by Geography (Unaudited)









 


13-Weeks Ended


March 28,

March 29,

Yr over Yr


2015

2014

Change

Net sales


$585,394



$583,221



0%

Americas


305,261



304,808



0%

EMEA


208,351



220,603



-6%

APAC


71,782



57,810