Financials: Garmin Q1 sales up on fitness, outdoor products; Big 5’s winter woes linger

Garmin continued to see great gains from its fitness and outdoor products in the first quarter. Meanwhile, sporting goods retailer Big 5 felt lingering negative effects from a weak winter. SNEWS has the latest outdoor and fitness financial results from Wall Street.
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Fitness and outdoor products continued to generate great gains for GPS maker Garmin (NYSE:GRMN), which reported overall first-quarter 2012 revenue up, despite a slight slip in profit.

Garmin’s fitness segment led the growth, gaining 26 percent to $71 million in the first quarter thanks to the start of shipments of the company’s new Forerunner910XT, designed for multi-sport operation, officials said.

“We believe the fitness category remains under-penetrated at both the high-end and low-end, which represent significant growth opportunities going forward,” Garmin CEO Min Kao said in a statement. “We intend to continue to innovate in both running and cycling to drive broader adoption of GPS technology across the price spectrum.”

Garmin’s outdoor segment grew 16 percent to $77 million due to gains in the company’s golf, dog-tracking and training products, Kao said.

Overall, the company’s revenue, which still primarily relies on its automotive and mobile sector, grew 10 percent to $557 million in the first quarter, compared to a year ago. Garmin’s quarterly net income slipped to $86.9 million, or 44 cents per diluted share, versus a net income of $95.5 million, or 49 cents per diluted share, a year ago.

Company officials noted that 2012 will be a year of investment for the company, reflecting lower margins, to drive further growth in revenue and profit for 2013.

While not every specialty retailer may sell GPS units, the results from Garmin signal sectors where consumers have been willing to spend extra money for luxury items. Cardio fitness with running and cycling remains a strong area and so does the pet category for outdoor.



Big 5 same-store sales fall nearly 3%

Big 5 Sporting Goods (Nasdaq: BGFV) reported its first-quarter 2012 same-store sales down 2.9 percent, along with declines in overall revenue and profit as it continued to feel lingering effects from a weak winter.

The outdoor, fitness and sporting goods retailer with stores in a dozen Western states reported total revenue down 1.2 percent to $218.5 million. Big 5’s quarterly net income slipped to $156,000, or 1 cent per diluted share, versus a profit of $2.8 million a year ago.

“Our results for the first quarter reflect the challenging economic conditions in our Western markets and, most significantly, highly unfavorable winter weather conditions in most of our major geographic areas, which led to an over 25 percent decrease in winter-related product sales for the period,” Big 5 President and CEO Steven Miller said in a statement.

Big 5 officials had projected the weak first-quarter results following its fourth-quarter 2011 report earlier this year. Further insight from the sector will come from Dick’s Sporting Goods and Hibbett Sports, which report their first-quarter results within the next two weeks. Both of those retailers were a bit more optimistic for the first quarter based on projections of strong spring sales with the continued warm weather.

Looking ahead to the second quarter at Big 5, Miller said that excluding winter-related products, sales were up and the trend was looking brighter for the second quarter. “Our same store sales are currently running in the positive low single-digit range for the second quarter to date,” Miller said.

--David Clucas

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