Garmin Ltd. Reports 24% Revenue Growth, 62% Operating Income Increase in Latest Quarter

Garmin Ltd. reported significant financial growth in its latest 10-Q filing for the 13 and 39 weeks ended September 28, 2024. Net sales for the third quarter reached $1,586.0 million, a 24% increase from $1,277.5 million in the same period of 2023. For the 39-week period, net sales totaled $4,474.3 million, up 19% from $3,745.8 million year-over-year. The growth was driven by strong demand across various segments, particularly in fitness and outdoor products, with fitness revenue benefiting from increased sales of wearables and outdoor revenue from adventure watches.

Gross profit for the third quarter was $951.6 million, compared to $728.6 million in the prior year, marking a 31% increase. The gross margin improved by 300 basis points, attributed to favorable product mix and lower costs of goods sold. Operating income for the quarter surged 62% to $437.5 million, up from $270.4 million in Q3 2023. For the 39-week period, operating income rose 43% to $1,077.9 million from $751.7 million.

Net income for the third quarter was $399.1 million, a substantial increase from $257.2 million in the same quarter of 2023. The basic net income per share for the quarter was $2.08, compared to $1.34 in the prior year. For the 39 weeks, net income reached $975.7 million, up from $747.5 million, with basic net income per share increasing to $5.08 from $3.91.

Garmin's total current assets increased to $5,209.5 million as of September 28, 2024, from $4,464.1 million at the end of 2023. Cash and cash equivalents rose to $2,009.4 million, while total assets increased to $9,347.7 million. Total stockholders’ equity also saw growth, rising to $7,506.5 million from $7,012.1 million.

The company made a strategic acquisition of Lumishore, a company specializing in LED lighting systems for boats, although this acquisition was not deemed material. Additionally, Garmin's share repurchase program, approved in February 2024, allows for the repurchase of up to $300 million of common shares, with $270.2 million available as of the end of the reporting period.

Garmin's operating expenses increased by 12% in absolute dollars, primarily due to higher personnel-related costs in research and development and selling, general, and administrative expenses. Despite this increase, operating expenses as a percentage of revenue decreased, reflecting improved operational efficiency. The effective tax rate for the third quarter rose to 17.9%, up from 8.0% in the prior year, primarily due to changes in Switzerland's statutory tax rate.

Overall, Garmin Ltd. demonstrated robust financial performance, with significant increases in revenue, profitability, and strategic positioning through acquisitions and share repurchase initiatives.