Summary
Garmin Ltd. reported net sales of $773.8 million for the thirteen weeks ended June 27, 2015, a slight decrease of 1% compared to the same period in 2014. This modest decline was largely attributed to unfavorable foreign currency exchange rates, which impacted revenues by an estimated $59 million. Despite the top-line softness, the company saw robust growth in its Marine segment (+41%) and solid performance in Fitness and Outdoor segments. However, the Auto segment experienced a significant contraction (-15%), a key area of focus for potential investors. Profitability saw a considerable decrease, with operating income falling 24% to $166.7 million and net income declining 24% to $137.8 million year-over-year for the quarter. This was driven by a lower gross profit margin (down 300 basis points) and increased operating expenses, particularly in advertising and R&D, which were strategically increased to support new product introductions and innovation. While the company faces currency headwinds and shifts within its product segments, the continued investment in R&D signals a commitment to future growth and diversification.
Financial Highlights
51 data points| Revenue | $773.83M |
| Cost of Revenue | $354.58M |
| Gross Profit | $419.25M |
| R&D Expenses | $109.24M |
| SG&A Expenses | $97.55M |
| Operating Expenses | $252.59M |
| Operating Income | $166.66M |
| Net Income | $137.75M |
| EPS (Basic) | $0.72 |
| EPS (Diluted) | $0.72 |
| Shares Outstanding (Basic) | 191.10M |
| Shares Outstanding (Diluted) | 191.60M |
Key Highlights
- 1Net sales for the quarter were $773.8 million, a 1% decrease year-over-year, significantly impacted by a strong U.S. Dollar which reduced reported revenues by an estimated $59 million.
- 2The Marine segment showed exceptional growth, with net sales increasing by 41% due to new product introductions and acquisitions.
- 3The Auto segment continued to decline, with net sales down 15% year-over-year, reflecting lower PND volumes and amortization of deferred revenue.
- 4Gross profit decreased by 6% to $419.3 million, and gross profit margin compressed by 300 basis points to 54%, driven by lower margins in the Fitness and Auto segments.
- 5Operating income declined by 24% to $166.7 million, and net income decreased by 24% to $137.8 million, reflecting margin compression and increased operating expenses.
- 6Research and Development expenses increased by 11% to $109.2 million, indicating continued investment in product innovation.
- 7The company maintained a strong liquidity position with $938.2 million in cash and cash equivalents and $199.0 million in marketable securities as of June 27, 2015.