Garmin Lifts Sales Outlook, But Tightening Margin Sends Stock Sliding

Garmin Ltd GRMN stock declined on Wednesday after it reported first-quarter 2025 results.

The company reported quarterly revenue growth of 11% year-on-year to $1.54 billion, beating the analyst consensus estimate of $1.50 billion. 

The GPS navigation and wearable technology company's adjusted EPS of $1.61 missed the consensus estimate of $1.67. 

Segments: Revenue from Fitness grew by 12% year over year to $384.72 million, led by growth in advanced wearables. Outdoor revenue increased by 20% year over year to $438.5 million, primarily due to growth in adventure watches.

Also Read: Retail Slowdown, Tariffs Jolt Leisure Stocks: Analyst Revises Estimates For Topgolf, Harley-Davidson And More

Aviation revenue rose 3% year over year at $223.11 million, driven by the OEM product categories. Marine revenue decreased by 2% year over year to $319.44 million due to the timing of promotions that affected revenue across several product categories in the quarter. Auto OEM grew 31% year over year to $169.33 million, primarily driven by growth in domain controllers.

The gross margin decreased to 57.6%, down from 58.1% year over year. The operating margin was 21.7% compared to 21.6% a year ago.

Garmin generated $380.73 million in free cash flow for the quarter, compared to $402.14 million a year ago. As of March 29, 2025, it held $3.9 billion in cash and equivalents.

FY25 Outlook: Garmin now expects revenue of $6.85 billion (up from prior $6.80 billion) versus the analyst consensus estimate of $6.83 billion. It reiterated an adjusted EPS outlook of $7.80 against the analyst consensus estimate of $7.92. 

In its forward outlook, the company said, “The forward-looking financial measures in our 2025 guidance include certain economic assumptions such as foreign currency exchange rates and tariffs which are fluid and can rapidly change favorably or unfavorably.”

Price Action: GRMN stock is down 7.39% at $189.02 at the last check on Wednesday.

Read Next:

• PayPal Earnings Beat, But Slower Spending And Checkout Use Weigh On Results

Photo by Dontree_M via Shutterstock