Garmin Fenix Segment Sales Fall 5% in Q3: Is This Peak Pricing?
Garmin CEO Clifford PEMBLE had some bad news today for shareholders. Despite highly positive overall results, the OUTDOOR segment of the business, with its flagship Fenix watch model, had issues.
…expectations were a little bit too high to begin with…[CEO, Pemble]
Garmin had hoped to deliver back-to-back years of double-digit revenue growth in its Outdoor Segment but found the goal ‘more challenging than expected‘.
Analysis: Garmin expects key models to initially sell well and then tail off over time. Thus, its strategy to counter that is to continually release replacement models. Last year’s Fenix 8 sold well and was augmented this year with the improved Fenix 8 Pro. Sales of the latter ‘did not fully close the gap’.
(Fenix 8 Pro) did not full close the gap [CEO, Pemble]
Garmin has said in previous earnings calls that Fenix is a key driver of the sales and profits of the outdoor segment, and the bottom line today is that the Outdoor segment saw a 5% decrease in third-quarter revenues (YOY), likely driven in the most part by Fenix.
Take Out
Is this peak Fenix pricing?
Other figures released today show good growth figures elsewhere in the company. The market fundamentals thus seem strong. Is Garmin’s never-ending quest to raise prices of its flagship watch reaching a point that the market can no longer bear?
Garmin’s share prices dropped 8% more than the NASDAQ fall over the same period, indicating negative market sentiment. Analysts are worried about aspects of Garmin’s future.
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Core brand promise features of the fenix 8 pro are worse than the fenix 8. The cutting edge features are really suburban functionality not backwoods functionality — but isn’t really comparable to the Apple LTE capability either. The price is really pushing the envelope and even charging for emergency features that everyone else offers at no extra charge. Meanwhile the US economy is taking a bruising from tariffs and mass layoffs.
I’m not surprised it was a miss.
quite a few Bounce 1 owners were complaining about coverage.
maybe not even a suburban feature?
I meant it’s only plausible as a suburban feature for LiveTrack or for LiveTrack for a big city marathon or triathlon. The txting stuff is demo quality. I wonder how much anyone uses Garmin messenger outside of the context of hiking and hunting in the back of beyond.
Given the LiveTrack without tethering is THE feature of the pro it’s baffling that they didn’t make a version of the 42mm size for the women who would probably be the most prime target for such a safety feature. (Even if you have to drop the useless satellite demo feature.) Baffling.
Even more so as the grown of Garmin purchasers seems to be fitness-oriented women.