TomTom said retailers reduced their inventory levels of its personal navigation devices more strongly than expected and bought fewer in the first quarter even as the overal market continued to expand rapidly.
In the coming months, new products are expected to drive revenue growth both through higher volumes and higher ASPs, but not enough to make up for the lower than expected result in the first quarter.
For the full year, TomTom lowered its sales forecast, but held steady on its unit and gross margin guidance. It now expects to achieve revenue of between 1.8 billion and 2.0 billion, down from its estimate of 2.0 to 2.2 given Feb. 21. It expects to sell between 14 million and 15 million PNDs and to achieve a gross margin and operating margin of close to 40% and 20% respectively. TomTom continues to target a long term financial model of a gross margin of 40% and an operating margin of 20%.