The quarterly report confirmed positive trends for Garmin
Wearable electronics manufacturer Garmin Ltd. (GRMN) last week reported a significant increase in quarterly revenue. The company operates in growing markets and, thanks to a strong brand, is able to steadily increase sales. In the first quarter, Garmin’s revenue grew 9% year-on-year, to $1.17 billion, and the company is on track to increase annual revenue by about 10% this year.
If the trend continues until the end of the year, then for Garmin it will be a continuation of its five-year annual growth rate of 10.5%. The advantage of Garmin is that it very quickly appreciated the new trends in the market, which made it possible to change the assortment in a timely manner and enter new product categories. Once known exclusively as a manufacturer of car navigators, the company now receives only 12% of its revenue from this segment. For comparison, in 2009, this figure was 70%. By the end of 2021, less than 60% of Garmin’s revenue will come from products for fitness and an active way of life.
Another 14% bring devices for aviation, while 17% of sales account for devices for maritime transport. It is worth noting that the automotive navigation segment has returned to growth after a long decline, as Garmin cooperates with manufacturers of original automotive equipment that uses its embedded systems. Garmin is distinguished by competent cost management, which allows you to increase profits faster than revenue. The five-year annual growth rate of gross profit is at the level of 11.3%. Because Garmin is making more money than its competitors, it will make more money in 2021 than Apple will make in the same time period.
Recall also that Garmin pays dividends, the yield of which is about 2.45%. Additionally, the company announced a buyback program for the first time in four years. For these purposes, the management allocates $300 million. The return of the buyback program after a long break may show that Garmin is optimistic about sales growth in the near term.
