OLATHE, Kan. (BRAIN) — Garmin's overall revenues were flat in the first quarter, but its fitness division — which includes its cycling-related products — grew by 31 percent, the company announced Wednesday.
Sales for the period ending March 28 totaled $585 million, up just slightly from the $583 million recorded in the same period last year.
Auto-related sales, still Garmin's biggest business, were down 11 percent, and outdoor sales were down 10 percent.
But the fitness division grew from $100 million last year to $131 million. The quarter included the launch of several new fitness wearables.
Gross margin for the fitness division was 63 percent, while operating margin dropped to 26 percent, a decline the company attributed to increased advertising and R&D expenses.
The company noted that in addition to the new fitness wearables introduction, it launched updated versions of its Vector power meter pedals.
Garmin's Virb action camera business is part of its outdoor division, which saw a decline in sales from $84 million last year to $76 million this year. The company noted that it recently introduced several new models of the Virb, but it won't start shipping unitl the second quarter this year.
Garmin also said the strength of the U.S. dollar negatively affected revenue by approximately $38 million, or 7 percent, in the first quarter.
"We were able to deliver solid operating results and consistent pro forma EPS in the first quarter despite the negative impact of a stronger U.S. dollar compared to other major currencies," said Cliff Pemble, Garmin's president and chief executive officer. "These results highlight our ability to capitalize on growth opportunities in the near term while still investing in our market-share position and long-term product roadmap through increased advertising and research and development expense. These investments are expected to generate ongoing growth potential in 2015 and future years."
