Garmin Raises 2026 Outlook to $8.15 Billion After Third-Quarter Revenue Growth of 12%
Key Facts
Garmin raised its fiscal 2026 revenue outlook to about $8.15 billion and its adjusted earnings-per-share forecast to $10.80 after reporting third-quarter growth. In its results statement, the company said it was raising its outlook based on results so far and momentum heading into the holiday season. Consolidated quarterly revenue was $1.99 billion, up 12% year over year. Operating income also reached a record $612 million, up 34%. The stock closed at $289.34 on October 27, according to EL7 data.
The new outlook includes a gross margin of 61.0%, an operating margin of 29.0% and an annual tax rate of 16.5%. In July, Garmin had forecast revenue of about $8.05 billion and adjusted earnings per share of $10.00 for 2026. The company has therefore raised its revenue and adjusted earnings-per-share estimates compared with its previous outlook. It said the higher outlook reflects results from the first three months of the year and expected momentum as the holiday selling season begins. Margins remain a key part of the picture, with full-year assumptions below third-quarter margins.
Third-quarter gross margin was 63.3% and operating margin was 30.8%, while adjusted earnings per share reached $2.76, up 39% from the same period a year earlier. Garmin attributed the improvement in gross margin mainly to a favorable segment mix and lower product costs, as well as about $33 million in recoveries of tariffs paid previously. These factors provide context for the quarter's higher margins, while the full-year outlook is based on a lower gross margin of 61.0%. The company said higher memory costs are included in its annual margin outlook. This places the profitability improvement achieved in the quarter alongside cost pressures that the company expects to continue weighing on results.
Garmin's segments had mixed performance in the quarter, with revenue growth in fitness, outdoor, marine and aviation, offset by a decline in automotive OEM. Fitness segment revenue rose 16%, driven by strong demand for wearables. Outdoor segment revenue increased 20%, mainly supported by adventure watches. In the marine segment, revenue rose 16%, led by sonar products, while aviation revenue increased 5%, mainly due to OEM product categories. Automotive OEM segment revenue fell 20%, a decline the company attributed mainly to domain controllers.
Garmin's new outlook was above analyst estimates cited by Investing.com, where the consensus forecast for annual revenue was $8.097 billion and the consensus earnings-per-share estimate was $10.13. For the quarter, the site said adjusted earnings per share of $2.76 exceeded analysts' estimate of $2.39. It reported that the stock rose 2.99% in premarket trading on October 28 after the results were announced. Garmin had linked the higher outlook to results so far and momentum heading into the holiday season, while memory costs remain a headwind for the expected full-year gross margin. The company pointed to the holiday selling season as the next phase of the season, without giving a specific subsequent date in its statement.