GRMN - Earnings call transcript Q2 2021

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Operator

Thank you for standing by, and welcome to the Garmin Ltd.

Second Quarter 2021 Earnings Conference Call. [Operator Instructions] as a reminder today’s conference call is being recorded. I would now like to hand the conference over to your host, Teri Seck, Manager of Investor Relations. Please go ahead.

Teri Seck

everyone. morning, Good to like to Ltd. Garmin We welcome would you second quarter call. earnings XXXX at release the Relations slides internet that note and site earnings the Investor Please Garmin’s press related at are on www.garmin.com/stock. available and related archive on website. the An transcript our of also be will available webcast earning other statements Ltd. projections regarding and includes call Garmin This forward-looking and its business. forward-looking market financial and future introduction, demand our products our Any earnings, margins, product statements future regarding operating shares, gross and statements. objectives are plans revenues, position, margins, future dividends, for on various this actual discussed call Garmin. The may materially and forward-looking circumstances events occurred earnings results as have and a factors differ could result of affecting Information concerning Commission. risk is Exchange filed XX-Q Form contained in these and Form XX-K and factors the Securities with our there’s significant about particular, and uncertainty pandemic. impact duration In COVID-XX the of the anytime, at and the today’s estimate as change could date. any COVID-XX about based available impact is results that business on means company’s the the on of and of results outlook best information statement the This Presenting on Garmin Ltd. behalf of are Financial Executive this morning and Doug and Officer Boessen, Chief and Officer; Treasurer. Cliff Pemble, President Chief this turn like over call to the I’d Pemble. Cliff to At time,

Cliff Pemble

Teri. Good everyone. morning, you, Thank

record digit performance. important earlier business to expanded was income five the and exceeded two announced at billion. and prior reported segments. million. strong XX% second revenue consider revenue Profitability all Garmin today, the year operating also in when operating the income margin XX% things over QX experienced We to $X.X growth quarter. $XXX Consolidated our in are As quarter There and strong. Operating double increased to for looking XX% increased

consumer retail onset which negatively XXXX the of the demand partners. COVID-XX disrupted reduced was QX and First, our of by pandemic, impacted

the comparable year. the prior the attributable As a current growth from period is result, unusual to of portion a

initiative to the recent for that and rate production in our during the opportunities capacity. quarters by growing products, This ahead. impacted compound from grow. new this our phase and approximately believe is These plan warehouse to fourth building XX% our office with we prepare our very improve of report the expansion space. will for multi-year entered that is Also to less capacity this former underlying that pandemic. later a which XXXX To we of of lie Olathe additional the facility into the part I’m convert a for production Second, auto the trends continues projects facility auto much of expansion our our fall, in recent facility healthy We facility new line meet indicates growth the of to OEM include was Taiwan, facility other annual and to trainers, a which including market Europe dynamics the pleased follow to Olathe Tacx demand the double OEM notable period, production. new completion cycling investments, XXXX a production is for open to in

and Given performance led results $XXX to increased our I’ll few on moment, with the digit of updated $X.X of and the strong our our a In five remarks guidance. brief and across million financial provide provide our all growth the revenue wearables. cycling XX% But segments. more business details on fitness, with our categories advance products first Starting outlook a by XX% we’re updating segments. double We expected of performance with billion, full year, of first year anticipate will business guidance. over revenue approximately half prior in Doug each year the in growth up now

because built-in it and launch Day two Forerunner of includes During the running GEOS quarter, is LTE. a our safety noteworthy XXX The we watches Forerunner and the celebrated with monitoring Global conductivity Forerunner LTE the new the recent leverages Running capability XX XXX of acquisition.

devices the across of range sizes, which these two in appeal enhance smartwatch X of Venu the launched broader also a We will customers.

the Fitness performance the year. to revenue for growth XX% raising strong our estimate segment, we’re the of Given

growth led across with Moving by $XXX watches. to adventure outdoor. Revenue all increased categories million to XX%

the use. modes, everyday dive features multi-sport During our and for training we watch, launched smartwatch multiple Dive featuring smallest MkXS Descent quarter

performance we the our segment, for of Given to the the are strong Outdoor raising revenue estimate year. growth XX%

XX% in Revenue aviation. in And both ADS-B achieved Looking which XXXX we $XXX Revenues aftermarket to the the was considering categories. growth in second and experienced quarter increased OEM million. the to on significant comparable performance. the is had of next XXXX, at levels quarter impact

is the J. Robert system certified to autonomous the the year’s aircraft During of without or an in as human astronautics. land prestigious fly quarter, achievement to awarded emergency greatest designed during the Autoland the activate intervention. Autoland Collier Trophy the aeronautics was safely and fields first

the of XXX than forward acquisition broadens for commercial look commercial, announced we our to building and AeroData provider aircraft also success. their a of in performance airlines worldwide. more information on leading AeroData, We serving presence

We’re how the the has mandate. impact to full of pandemic approximately the and aviation the year completion pleased with from the recovered expect revenue XX%. We segment ADS-B now of increase

growth with by Turning categories the to led XX% segment, increased across next to Marine chartplotters. $XXX multiple million revenue

announced of Mercury’s support engines, quarter, engines expanding we During compatible list for systems. display our with the SmartCraft

to launched magnetic heading We new finally, revenue marine without mind, position year. systems. increased increase provides our and expect continue XX%. And interference in which strong the categories compass also revenue information the million to the both compass, The growth the expect that demand we OEM to challenges looking be throughout will is off XXXX, segment programs. XX we full year start With satellite contributions consumer a $XXX from XX% precise associated and auto great with and to marine MSC in remainder this of with traditional approximately

View dash During cam subscription Live the and cloud based monitoring premium storage. quarter, our we launched connected first with

to to approximately gives for strong we’re which so our auto pleased increase now In to expect summary, confidence very far, the segment we raise our with the performance year, Given XX%. us year. start the guidance the

for capacity In production facilities. both office future the expanding by are addition, investing we and our

positioned remarks. well are lie that ahead. concludes we opportunities That seize So to my

guidance. our will Doug? walk and details Doug additional on updated results Next, our you through financial

Doug Boessen

second flow statement, year-over-year. updated the of Gross margin $X.XXX cash second quarter, sheet, revenue our begin Good and We comments morning, posted taxes everyone. quarter our Cliff. on point was results, guidance. a Thanks, representing increase was as by prior for XX.X%, decrease balance XX% XX% reviewing make billion I’ll sales the Operating the XXX basis XXX Operating million, to margin XX.X%, basis quarter. basis increase. Operating was income prior increase. a expense percentage quarter. was point of decrease XX%, XX financial $XXX point

forma Our EPS pro $X.XX GAAP and was was EPS $X.XX.

quarter Next segment we at second geography. and by look our will revenue

remaining contributing We at we during our XX%, set quarter, have double-digit in single highly of product coming by followed markets opportunities our all diverse We with and geography, Fitness EMEA the segment in reduce contributed second in achieved model of the America’s XX% second XX% our rich outdoor growth lines. in By growth reliance provide which auto Americas a XX% segments, sales the double-digit the largest followed of achieved is of EMEA. led in XX% half quarter, APAC. our strong three APAC, and and about from XX% all growth regions on and business by growth. by by region led revenue,

second compared costs the related XX%. expenses, operating by percentage in a as decrease SG&A decreased of $XX of approximately receivable primarily and sequentially technology Advertising highlights cash Increase Accounts quarter primarily taxes. approximately to Looking increased sales; in to year-over-year, at to segments. outdoor point SG&A $XX and due the to cash to year. next, million and in balance sales to information $XXX requirements. costs. with expense XXX $X.X prior few marketable engineering quarter or personnel but quarter, prior was expenses; material ended increased strong due increased to to $XX flow to sheet, to million, and basis our increased due raw and million year-over-year spend XX.X%, the and second the compared increases segments. all higher We million, Research of across billion. sequentially million fitness personnel balance A operating $XX quarter increased due increased primarily development on statement expenses million securities year-over-year due Inventory $XXX

During $XX prior the decrease flow cash we with of million free quarter. quarter $XXX the second a XXXX, million, of generated

quarter million. capital expenditures second Our for $XXX were

million capital expenditures flow invest that approximately $XXX mentioned. $XXX expansion We in expect XXXX be approximately to Cliff cash full million free year to and previously projects

of X.X%, tax quarter During second effective rate XX%. of XX.X% quarter to we prior tax of tax gap rate forma year compared XXXX, rate pro reported the

we to approximately of our of next billion, for XX% our segments. the of year increase estimate revenue in prior an each $X.X Turning full double-digit growth guidance, with year

gross margin to than due approximately is expect lower higher supply which We be of to guidance XX.X%, our XX.X% costs. chain previous

Q&A. of We our approximately jurisdiction, if operating in XX.X%, which pro effective also please of the formal in of previous than line per the mix This you by share Valerie, rate XX.X% approximately tax higher guidance earnings open is forma $X.XX. pro which our expect expect results for income forma concludes remarks. XX.X% margin

Operator

question first Our Instructions] JPMorgan. Paul of [Operator from you. Chung Thank comes

Your line is open.

Paul Chung

taking Hi, and great question quarter. my thanks for

the out? expand what of LTE expand have can customers are subscription margin there product you watches how are to on other shake the of the is and opting percent give strategy LTE, Phoenix is And I and to insights for repeat service? new? how And contract, is on of function just then kind monthly So follow-up. LTE versus the that on LTE customers some a Forerunner profile percent doing? the XXX What the And and that

Cliff Pemble

Yes, for XXX I early days LTE. Paul, good morning. think it’s the

of our say in product a not that us ability solution with there results end-to-end offers of I terms interested now specifically help recently subsidiary and some but we about the GEOS it the the and the acquired, the story they category offer buy Garmin people that’s kind that don’t say results to is it. product time customer safety the that really integration their connectivity this need activities that want a will by in if yet lot safety, we with the and also for So would provide of in to anyway real allows to customer monitoring with

product. early and safety compatible kind speak roadmap it’s taken with right is the it’s but the our can’t that that InReach of line to something And would customer take for that’s monitoring really again, in with now, terms I we’ve the of active So approach product that days lifestyles.

Paul Chung

very contribution on this north of or of there as finally year XXXX Should of much about then different talk be the great. benefit navigate revenue of Okay, ASPs this then operating should opportunity? how expect of on product. we the approaching cross very of and see with AeroData, we less going see base. dynamics are margins And with and Autoland, another through seen and for aviation, in you kind balance mix some And hit to existing kind we rebound customer any high type margins. ADS-B product there you’re selling that ADS-B XX% expect opportunities can on nice then I’ve on operating levels of

AeroData does kind not penetration adoption fit the in rate of assume improving as think let’s of in goes Thank large here an of the of performance So is overall what this you and terms feature. but you. that there,

Cliff Pemble

Yes.

aviation we will So we that leverage depend come on than the operating really the future. expect managing aviation. of period of sales that forecast operating the But in pretty new the have be to say, that very expenses in doing strive and that in has, hard of the our it’s have said, to we’re investments margin, challenge Other that make for course It face. to we we we be that up programs worked on a the and products difficult margin profitable. and in team very during terms this we because additional don’t

that a of also small escape engine out very In it’s that it’s provide done because for contribution, for conserve safety are an adder, commercial fuel, airlines important calculation and a AeroData terms important flights procedures takeoff. performance but help during one

then from expand well. it’s as business that required and a aviation, that’s Autoland. to models course commercial Piper. of think critical Autoland And function XXX%. And delivering so the can we MXXX we TBMs, Cirrus on SF something models, and from a then three right on now, finally, those aviation it’s the And in that’s in is the

not So this is an option.

rapidly. growing very delivery those popular is there they’re of number of with growing market models. the The and is the models So aircraft out

but se, of aircraft from of the closely a an AeroData, enhancer in AeroData that performance to Autoland connected and terms they part business aren’t In of would view. that’s be point something per that, safety

Paul Chung

very you helpful. Thank

Operator

you. Thank

Our next comes of Ben question from Cleveland Bollin Research.

Your line is open.

Ben Bollin

the components? situation current question. a was tell of taking what was that did lot that influence Good little a everyone. on like the about How’d for Thanks I how you characterize you for it the us fiscal that year? bit could Inventory obviously follow-up. about you availability supplies influence how have would Doug, looks And materials, morning, do but then a of the think raw XQ? could remainder

Doug Boessen

The inventory. reason flavor I’ll Yes. inventory a on requirements. that you is raw is little year-over-year to give due the up material

raw relates the daily we’re that effectively meet sure say the managing requirements to we’re the looking something make to have supply it on is our we demand. that material do making very as that just components We’re I’d situation that increased meeting securing that to at appropriate making sure chain a basis, to demand. to

of sure said, number, on billion team that are we have on a we’re of the $X As increased rest than sales probably end to will what is to I year. that rough That’s making by think relates the – Probably more situation, close probably basis the inventory and be than even I daily it more it have with managing a something that. our I like going the today. some we we focused probably increase year about as think the all the level to just is what

Ben Bollin

now Okay. the fourth through existing could bring Thank right on approximate you that are helpful. timing timing facility facility the think where other be for your the online go, you. the fourth you to utilization facility this item when be as to for on will and of double ready then just And footprint talk with you or Taiwan potential you expansion, and production, the would us the

Cliff Pemble

Ben. Yes,

I think a would manufacturing, say, consumer bursting up of demand. we’ve and seams existing of footprint, with the especially our growth specifically utilization at at keeping talking in almost I XXX% we’re market mean, our I this capacity. been about terms

timing us. our of there So products constraints. alleviate start will new facility, very and of And terms produce for help step a capacity opening targeting important to we’re the in fall a to it’s that overall

Ben Bollin

Thank you.

Operator

Thank you.

Jeffrey comes Our next question from Deutsche Rand of Bank.

open. Your line is

Jeffrey Rand

congrats strong and on the Hi. quarter. Thanks

business products? appear auto driving, quarter, think business is Your older is forward? back do you the about And new bounce nicely or this about how consumer going this to can what talk in you

Cliff Pemble

about all We and specialty been talking Jeffrey, for saw, the opportunity in while growth business. categories We’ve in in our strength a the of consumer auto growth the products.

Of traditional back. course, well very and the they bounced did also P&D

the in well. did demand those of less simply categories of is last had products. and as that year, demand general, of pent traveled all for Some up the less people course, But

Jeffrey Rand

like is by driven based comps of of last the year-over-year And is half Great. your revised second just on second Are year? any kind to signs looks the slowing growth outlook, demand? of of seeing revenue the in year. it of Or this decelerate hard going half being you the

Cliff Pemble

I a our Yes, there’s to think, things few really in consider guide.

very last the that of all, and believe of because First challenging really year, half. the first first half portion of second to the impact the was the was shifted a we in pandemic half

So was were And first even weren’t And do I earlier doors. due not our them those the second we mentioned consumers in by what pandemic. pullback half there open many from benefited that of to able to a the partners retail their factors half then initially. disrupted,

look a timing chain potential of at outlook our exists. year then year. last that also That’s we versus So factor our a product finally and as in our supply this look at uncertainties still factor around And we guide. is that’s release

than at lower So and believe the that’s experienced much but I into by the factors we that what yes went is what guide of first mentioned. a just that it the explained half, is in we rate

Jeffrey Rand

you. Thank Great.

Operator

you. Thank

Power of Our from Will next Baird. question comes

Your line is open.

Will Power

as congratulations there my quarter. sell you’re on across that outlook? and in demand guess And probably taking provide the kind channel Thanks looks inventory guess love to what impacting that I any be broader wanted, I’d how color categories maybe situation is not great. strong the so for question. of it I soon on channel echo the broadly, inventory Yes, you Okay, sell any or feel versus it strong like. you like color through the may may just forward as do where able like imbalanced

Cliff Pemble

Yes. Thanks, Will.

inventory to areas think to that inventory, channel of than in in of the there’s but and scramble lean on it’s has continue past, fill. depending segment I product been still we terms it better

of we right deliveries ability been Garmin that we products the lot making. we’re products especially that with registrations up keep through the line shipping, the see, now those have sell connect. order air our observe with sell through The that. to in through in on has We’re And to in

inventory need where the not So a still be. better, but we bit little situation to

Will Power

of here. trends just might be broader M&A for parameters ask and barrier Okay. from generate that much what look mean, obviously how wanted areas given some to And kind here, then to and areas outlook Just I of the of targeting? you interest any you demand is on valuation continue color like the cash flow? on a some strong of

Cliff Pemble

is M&A something at. looking we’re I where think continually

or looking usually time. in interested share kind things very is given anyone are There’s terms nuanced We ever really that interesting products our few a technology of and in segments of to complements are adjacent don’t challenge, are opportunities exuberance in, right what at I but would expectations. I the is, that different obviously are market say a at of we’re us. lot anything now. Valuations specifically a

So out aren’t that things and of line. are we don’t certainly interested to, those in simply want

so we don’t And on typically engage those.

Will Power

Okay. Thank you.

Operator

question next Longbow Research. Nik from Todorov Our comes of

is Your line open.

Nik Todorov

wonder, it the R&D that morning, from leverage Good your took change? came like OpEx year Yes. for And I and operating gross or component credits of receiving or look is meaningfully OEM down you what’s if reflecting, guide looks the R&D the sequentially, has took specifically the margins is Doug, driving thanks that? I have, your margin cost. Hi. by But or guidance, plans because out at because down for OEMs you questions. that up. everyone. driven I

Doug Boessen

full flavor sequential for what’s there. of a you as for just on percentage the sales overall going and I of to the give Yes. year kind want OpEx

expenses about relatively year-over-year, we basis. up of percentage one be of a our basis So basis to for the percentage is on of year operating a year XX each expect a sales advertising, on full that to goal looking at sales, of as flat keep points categories full

it sales Now spend. increase will increase co-op absolute and media on as dollars,

points XX that to our to we roadmap. do count expect relates about sales there it basis year-over-year R&D, support and be product As head increased up of to just percentage

on et sales little in percentage full flavor OEM, a on basis. year about SG&A, Then investing talking there, of cetera. We’re auto a

of that expect and slightly support operations. product to IT XX also maybe driving up due that’s as increased as points, We some different about costs, be and to areas sales, that well volume such basis to really as the

As it an lower to in is on a there change reimbursement reduction change the get to of or second R&D basis relates partners. a whenever some reimbursed OEM gives partner due and request, R&D. in that for shown as The sequential is that situation is or quarter situation our requests OEM from that the we

bit be the may little bumpy there So there quarters a standpoint. my between from

Nik Todorov

aviation Okay. aviation as Cliff, sequentially should back I meaningfully And What and Got guidance half operating related it margins Very down here? also it. think from that be driving speak investors normalized would normal? the kind as look implies once aviation, goes Thanks. to revenue. helpful. sales in go aviation about of at lower if how And second to business

Cliff Pemble

it. deliveries timing outlook of of and bit second our try that. in of a for think the and up with products that to of certain bit goes the of little we second that can quite But analyze all we there’s half to half to in is a And terms related science some into of factors the customers. art I again, coming Nik,

the one because thing delivery. accelerated some some that’s half benefited in of So we first

of it. So that’s part

there’s typically of a real lot that difficult effort above they the countries. developing for levels aviation In for projections rates, the know those at grow lot to are and terms happen. can a growth market, mean, or they long-term, of very long-term on And based put I and are GDP people frankly, it’s studies so studies that into normalized of everything how

pandemics As know, the course the growth of whole change can we trajectory.

and interest growth. Aviation that our we view and and of of to want only look share a platforms to terms at probably grow from both we market on say continue point penetration we generally segment passing market in with So that

Nik Todorov

Thank it. you, luck. guys. Got Good

Cliff Pemble

you. Thank

Operator

Thank you.

comes Feinseth Ivan Our Tigress of next from question Financial.

is line open. Your

Ivan Feinseth

congratulations my Thank taking you for quarter. question another and incredible on

Cliff Pemble

Thanks, Ivan.

Ivan Feinseth

increased What your from tremendously for increased to On driving XX%. guidance, growth? is you XX% marine that the guidance

Cliff Pemble

our a many market build even very marine as closing saying boats continues and the boating, XXXX, Well, into that the The to that’s strong. interest of be people well. are boating now lot some There’s are OEMs. in backlogs

lot in So of interest a there’s boating. just

Our retail partners of in people upgrading interest also their see lot a existing boats.

and the there to hard So working the of the needs is we’re market. very momentum simply satisfy

Ivan Feinseth

And doing aftermarket well, from equal let’s seeing as demand better? has products which OEMs you’re been say, and

Cliff Pemble

course, involved accelerating. But I tends some just taken it they’re lot in very generally, Because up time say complex have they and spin to go The a would and production. of they’re their down. strong, of both up very definitely to what OEMs materials it’s do.

from We’re in still seeing promotions product meanwhile in lot retail, and our sales of a and partners the the that future. there’s retail our interest plan OEM for of a products lot

Ivan Feinseth

equipment. people all A and use the would of just buy lot then marine of say, and boats upgrading

Cliff Pemble

When boat Yes. go is the incredibly one their so of can tight, boats. is the they find market letting used no

Ivan Feinseth

on working auto with then but autonomous not Nvidia autonomous of Cruise. and some capability the OEM and OEM glide, And OEM your some are in then, Qualcomm, Waymo control, the and say seeing – smart with manufacturers, and side of land GM and computer like incredible the you incorporating for autonomous that only aviation also innovation manufacturers like automotive, of

Cliff Pemble

so there’s I overlap in little would and say are that the aviation different, auto we’re terms doing those very technologies areas. between what in of autonomous

to So comment really nothing there.

Ivan Feinseth

capabilities, But capabilities OEM you what camera some have in AI about cameras. your your

Cliff Pemble

for But features most work kind autonomous they sensor fusion on strategies sensor view have point from their using those that partners auto they’re Yes. want. for the and sure I and their building OEMs technology, can be that are of things mean, blocks of of that the part a applied. to

technology. plan, a their overall doing their but we’re are the of so And not part necessarily that ones

Ivan Feinseth

on opportunities things then you do and you kind made of integration in Connect last app had growing one Garmin say, wellness comments into What see your area, let’s some like the there. corporate that. wellness, And opportunities corporate

Cliff Pemble

we to on Well, opportunities. continue press those

wellness to think I benefit programs there. and interesting we that Each is level on of we about our any It the product some in one are requires part offering have we’ve of that the have a on different. wellness those vívofit. opportunities kind especially some that out end And almost served down of applied customization, anywhere The opportunity. is of entry-level what’s partners. corporate line broad opportunities be that very can Phoenix to highest the from

to on that So those for more we in continue work and we continue to opportunities look space.

Ivan Feinseth

Thank you and again. congratulations

Cliff Pemble

Ivan. Thanks,

Operator

you. next from Instructions] Our question comes Thank Derek Soderberg Colliers Securities. [Operator of

is line Your open.

Derek Soderberg

thanks Doug, conclude some questions. sort on margins. margins or Hey maybe short want and with of you’re those as transitioned think gross my over follow-up. there I guys, start for should taking how margins trajectory the operating of curious about to side we investments you to a OEM have I’m And term? the that making I automotive medium

Doug Boessen

Sure.

of And some gross overall. related, auto margin decreasing our becoming business year-over-year seeing our OEM, more to new have it be you’re overall as auto. that are margins As also gross since down those that bigger it seeing lower gross programs basis primarily, BMW, you’re auto OEM also piece come a margin of auto, on a a relates hardware within specifically

of kind margin a in on to segment in into to from a of become and So business overall of of piece it’s function mix it as really standpoint the relates there actually newer what’s our basis. piece on as play just that, be a of gross an there, a those those margin gross going type a larger

consumer OEM. we the the to is investment relates it auto well. As margins there, to are so in stage business yes, that relating doing operating standpoint, auto the From

standpoint. So we R&D that a with have high

couple we’ll So standpoint. in a till production we here of that years into for probably get be

Derek Soderberg

then gross was curious if prior impact to And one then does How Day year? Prime Thanks. the had it. a Got typically any just relative on how rest well. Prime you And your margin years? quickly wondering impact for for Day, the of a And on guidance as quick that on guys? just that that

Doug Boessen

Yes.

standpoint. with So Prime shift the year-over-year, the there was that Day a from

the last So quarter. year year, third in was this in second that the – quarter

that as So talked Cliff have. about that did comparable impact, we do

gross standpoint to are that’s margins whole a overall a promotional – lot. As didn’t there an year probably it from relates kind that of but for us business the standpoint, full impact in it more

Derek Soderberg

Great. Thanks.

Operator

you. Thank

Our next Stanley. from question of Morgan comes Erik Woodring

line open. Your is

Erik Woodring

the Good Congrats morning, guys. on quarter.

Just want to start.

stronger your upside XXXX, into new the of seeing you’re obviously implies guidance some XQ second range and also the can a So continue half.

so component you can you help new embedding from – then impact over follow-up. perspective And maybe three are that what And has forecast? into your component you just last understand I the guidance gives And just a then in us that Thanks. targets? your months constraint confidence any changed from constraints any have

Cliff Pemble

driven to it by consumer backlog even don’t we we of they a the have see kind mentioned, we a that’s beginning because Erik, when a business the as into customers Yes. what guidance forecast lot our at book, it’s lot year, times from not our of of create goes I demand there’s a of want. and a and we’re that project art

with more reach By course, of time point had what we’ve the of take we So account that to year. and in back to this beginning the much the promotions. market year, picture place in will the at what’s happening. half And time see of take of also dynamics a into the we the we the evaluate start

more half of strong the sense So And at year of guidance saw first transpiring we end have clarity it what’s as the time, in that’s our our for us why now the of finish. year. this we to might And we a of gives looked expectations. then better because update we’ve able been ahead trends the half, how second the

Erik Woodring

of margins, your incremental then, And you. headwind seeing pressures? unrelated Thank also you’re maybe you And margin, that component maybe pressures be second assumed helpful. Maybe autos into That’s cost and new Okay. mix? your can that half one. where those in would believe And of so, kind costs what we the a to you together also guidance of how if all Thanks. but I facility? gross mix margins, the on from impacts shift talk are manufacturing then touch terms to about pressures embedding in gross to some

Cliff Pemble

Yes.

account. simple. and it’s at we very things think into on mean, other those component trends trends I we’re all terms look seeing of of look We what really we promotions, at I supply chain in of pressures. margins take the based general

that that of into been all and factored do year. our outlook has we So every

Erik Woodring

to maybe that, I I saying And are you on expect second more cost is or pressure just make that. related if sure more logistics? it the understand half, clarify you to Just component want

Cliff Pemble

would say supply the that’s been so year. far seen our increase that than Generally guide the And half in provided. we’ve what this built into chain will second have I costs we more

Erik Woodring

Okay. Super. Congrats guys. so you much, Thank again.

Cliff Pemble

Thank you.

Operator

Thank I’d further at any to no time. you. showing turn the I’m call Seck closing Teri like remarks. for over to this back questions

Teri Seck

you great much for a and Bye-bye. your Thank so day. have time

Operator

Ladies and gentlemen, this day. conference. a Have you participating. all Thank great does for conclude today’s

You may all disconnect.

Garmin (GRMN) 28 Jul 212021 Q2 Earnings call transcript