Garmin Ltd. has recently released its 10-Q report, revealing its diverse range of wireless devices and applications designed for people with active lifestyles. The company is organized into five operating segments: fitness, outdoor, aviation, marine, and auto OEM. Its products are sold through various distribution channels, including independent retailers, dealers, and online webshops.
In the 13-week period ended June 29, 2024, Garmin reported a 14% increase in net sales compared to the year-ago quarter, totaling $1,506,671 thousand. The fitness segment saw a significant increase of 28% in net sales, reaching $428,404 thousand, driven by sales growth in wearables. The marine segment also experienced a notable 26% increase in net sales, reaching $272,953 thousand, primarily due to contributions from the company's acquisition of JL Audio. However, the outdoor segment saw a 2% decrease in net sales, totaling $439,872 thousand, primarily due to declines in adventure watches.
The gross profit for the 13-week period ended June 29, 2024, increased by 14% to $862,891 thousand. The fitness and outdoor segments saw significant gross margin increases of 550 and 210 basis points, respectively, primarily due to favorable product mix. However, the auto OEM segment experienced a 730 basis point decrease in gross margin, primarily due to unfavorable product mix.
Operating expenses for the same period increased by 10% to $520,864 thousand. Research and development expenses increased by 8%, primarily due to higher engineering personnel costs, while selling, general, and administrative expenses increased by 11%, primarily attributable to increased personnel-related expenses, including the impact of the company's acquisition of JL Audio.
The company's operating income for the 13-week period ended June 29, 2024, increased by 20% to $342,027 thousand. The increase in operating income as a percent of revenue was driven by increased sales and lower operating expenses as a percent of revenue. However, the aviation segment saw a 20% decrease in operating income, while the auto OEM segment reported an operating loss of $11,552 thousand.
In terms of other income (expense), Garmin recognized a total of $23,945 thousand in the 13-week period ended June 29, 2024, primarily driven by interest income and foreign currency losses.
The company recorded an income tax expense of $65.3 million in the 13-week period ended June 29, 2024, resulting in a net income of $300.6 million for the same period, an increase of $12.7 million compared to the year-ago quarter.
Today the company's shares have moved 1.6% to a price of $179.34. For the full picture, make sure to review Garmin's 10-Q report.
