Product Expansion Powers Garmin's Outdoor Category Sales Growth in Q1

Garmin Ltd. GRMN delivered a strong start to fiscal 2025, fueled by an impressive performance in its Outdoor segment. While overall first-quarter results were mixed, missing the Zacks Consensus Estimate on revenues and earnings, the company still posted an 11% year-over-year increase in total sales, reaching a record $1.54 billion. Much of that growth came from the Outdoor business, which is quickly becoming Garmin’s most important and profitable unit.

In the first quarter, Outdoor segment sales jumped 20% year over year to $438 million, leading all five operating segments in both growth and absolute revenues. Even more notable, the segment generated $129 million in operating income, up 20% from the prior year, with strong gross and operating margins of 64% and 29%, respectively. This performance highlights not only rising demand but also Garmin’s ability to deliver profitability through premium, purpose-built devices.

Product Expansion Drives Garmin’s Outdoor Sales

Garmin’s sustained focus on expanding its product portfolio has been driving the Outdoor category’s overall performance. The company aggressively expanded its adventure-focused product lineup during the first quarter, targeting niche outdoor sports and lifestyle categories where the brand already has a strong following.

The standout release was the Instinct 3 series, a refreshed line of adventure watches now offering a bright AMOLED display. Garmin also introduced new devices in the dive (Descent G2), tactical (tactix 8) and golf (Approach S44/S50) categories, each designed to serve dedicated use cases.

This strategy of deepening product offerings within specific activity verticals is clearly paying off. It allows Garmin to better serve enthusiasts who value specialized features and are willing to pay a premium for reliable performance in challenging conditions.

The company also launched new handheld GPS products like the Montana series with SOS satellite functionality, as well as the solar-powered Approach G20 GPS for golfers, billed as the first of its kind with unlimited battery life in sunlight.

Outdoor: Garmin’s Most Profitable Growth Engine

The success of the Outdoor segment is especially valuable for Garmin right now as other parts of the business face more uneven conditions. For instance, Marine revenues declined 2% in the first quarter due to promotional timing, while Aviation grew a modest 3%.

The Auto OEM segment gained 31% but remains the least profitable, with a $9 million operating loss in the quarter. Fitness, meanwhile, saw a healthy 12% increase thanks to demand for wearables, but its margins trailed those of Outdoor.

Outdoor’s high-margin profile gives Garmin a financial cushion and enhances overall earnings quality. It also helps the company absorb macro pressures like U.S.-China tariff impacts, which are estimated to raise annual costs by roughly $100 million. Despite those headwinds, Garmin maintained its full-year EPS guidance at $7.80, a sign of confidence that strengths like Outdoor can support the bottom line. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Garmin’s Zacks Rank & Stocks to Consider

Currently, GRMN carries a Zacks Rank #3 (Hold).

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