Shares of Garmin (GRMN +16.23%) gained on Wednesday after the navigational device maker boosted its full-year sales and profit forecast.
Image source: Getty Images.
Earnings grew much faster than expected
Garmin’s revenue rose 11% year over year to $2 billion in its fiscal second quarter, which ended on June 27.
This growth was fueled by a 14% jump in the GPS-enabled product manufacturer’s marine sales to $341 million and a 25% surge in its fitness revenue to $757 million.
New product launches, such as Garmin Signal VHF marine radios and Forerunner smartwatches, contributed to the gains.
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Garmin’s profit margins also expanded. Its gross margin increased 3.6 percentage points to 62.4%, due in part to tariff refunds and a more favorable product mix.
All told, the Swiss device maker’s operating income climbed 30% to $616 million, while its adjusted earnings per share increased 29% to $2.81. That crushed Wall Street’s estimates, which had called for per-share profits of $2.29.
Fitness trends should continue to fuel Garmin’s growth
These strong results and encouraging ongoing sales trends prompted Garmin to lift its full-year financial outlook. Management now expects revenue of $8.05 billion and adjusted earnings of $10 per share. That’s up from a prior forecast of $7.9 billion in revenue and $9.35 in EPS.
During a conference call with analysts, CEO Cliff Pemble said Garmin is well-positioned to profit from rising usage of connected fitness apps and wearable devices.
“We are very pleased with these results and continue to expect the fitness segment will be the strongest contributor to 2026 consolidated growth,” Pemble said.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Garmin. The Motley Fool has a disclosure policy.