Garmin Beats on Q1 Earnings; Margins Shrink Amid High Freight Cost, Component Supply Crisis

  • Garmin Ltd GRMN reported first-quarter FY22 revenue growth of 9% year-on-year to $1.17 billion, beating the consensus of $1.12 billion.
  • Revenue from Fitness declined 28% Y/Y to $220.9 million, Outdoor rose 50% Y/Y to $384.6 million, Aviation improved 1% Y/Y to $174.8 million, Marine jumped 21% Y/Y to $254.1 million, and Auto sales grew 11% Y/Y to $138.3 million.
  • Margins: The gross margin contracted 330 bps to 56.5% as costs surged 18.4% Y/Y. The operating margin contracted 380 bps to 19.5% as expenses increased 11% Y/Y.
  • Proforma EPS of $1.11 is in-line with the consensus.
  • Net cash provided by operating activities totaled $185.6 million with $126 million in free cash flow. It held $3 billion in cash and equivalents. 
  • CEO Cliff Pemble said, "High freight cost and component supply challenges persist while new headwinds emerge, such as the strengthening of the U.S. dollar and the uncertainty created by Russia's invasion of Ukraine."
  • Stock buyback: The Board of Directors authorized the Company to repurchase up to $300 million of the Company's shares through December 29, 2023.
  • Outlook: Garmin reaffirmed its FY22 revenue of $5.5 billion, below the consensus of $5.47 billion.
  • Garmin reiterated proforma EPS of $5.90, below the consensus of $6.02.
  • Price Action: GRMN shares traded lower by 0.55% at $109.39 on the last check Wednesday.

Posted In: BriefsEarningsNewsGuidanceTech

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.