Garmin Ltd. said its outdoor/fitness sales grew 24% to $88 million in
the third quarter and that retail orders indicated holiday sales of
personal navigation devices, or PNDs, would be strong.
Outdoor/fitness was the second largest and third fastest growing of
Garmins four segments, which generated a 79% sales increase to $729
million.
Revenue rose 71% to $454 million in North America, 89% to $227 million
in Europe, and 109% to $23 million in Asia . The company sold 2.7
million units during the quarter. Unit shipments are up 97%
year-to-date. The company described its initial order book for the
holidays as strong and said its research indicates it holds 50% of the
U.S. market for PNDs. Outdoor/Fitness gross margin and
operating margin decreased to 52% and 33%, respectively.
The new Astro dog tracking product, as well as new eTrex and Rino
products drove growth in the outdoor/fitness segment. Garmin also began
shipping its new Forerunner50 speed and distance watch; its first
fitness product to offer wireless connectivity for downloading workout
information to Garmins fitness website. The company expects
year-on-year sales growth in the segment to slow to 15% in Q4.
The company reported net income rose 57% to $193.5 million, or 89 cents
per basic share. Gross margins fell 183 basis points to 47%, while
selling, general and administrative expenses rose 31 basis points to
11.95% of net sales. Executives said they expected revenues to
hit $2.9 billion in 2007 with earnings per share to exceed $3.40.
Outdoor/fitness sales are projected to grow 10% for the year, the
slowest of any of the companys segments.
