GRMN — Q2 2026 Earnings Preview

1. Earnings Preview

Key Takeaway: Setup is moderately constructive — consensus is a beatable bar on EPS and Fitness revenue, but the Outdoor recovery trajectory is the single biggest swing factor and remains unproven heading into the print.

Heading into Q2 2026, Garmin's setup is defined by a tale of two segments: Fitness continues to run well above prior expectations while Outdoor faces a second consecutive quarter of year-over-year decline, with management explicitly guiding Q2 Outdoor to be "similar to Q1" — a meaningful headwind given Outdoor's high-margin profile. Consensus for Q2 revenue sits at $1.937B, implying ~7% YoY growth, a step-up from Q1's ~14% growth rate that was almost entirely Fitness-driven; the bar is achievable if Fitness sustains momentum and Aviation/Marine hold, but any further Outdoor deterioration below the already-depressed consensus of $483M could reprise the Q1 stock reaction. Management maintained full-year FY2026 guidance at the Q1 print despite a strong beat — consistent with their conservative posture — and has not revised it since, leaving estimates essentially unchanged from the post-Q1 baseline; this means there is no guidance-driven cushion or risk embedded in current numbers. The stock is up only ~2.4% since the Q1 earnings date versus the S&P 500's +4.1%, suggesting the market has not priced in a beat, and at roughly 25–26x NTM earnings the multiple is full but not stretched. The key wildcard is whether new product launches — including categories entirely new to Garmin — arrive in Q2 or slip to Q3/Q4, as management signaled 2026 would be "in line with or slightly stronger" than the typical ~100 new products per year, and any early launch pull-forward could meaningfully surprise Outdoor to the upside.

2. KPIs & Consensus Expectations

Key Takeaway: Consensus is a beatable bar on EPS ($2.29 vs. $2.17 last quarter actual) and Fitness revenue, but Outdoor ($483M consensus) is the bigger swing factor — any miss there will dominate the reaction, as it did in Q1.

Table 1 — Q2 2026 Current Quarter Snapshot

Sources: Visible Alpha Consensus and Actuals Data. All figures in USD millions except EPS. Q2 2026 consensus as of July 28, 2026. Q1 2026 Actual and Q2 2025 Actual from Visible Alpha reported figures.

Table 2 — Beat/Miss History (Last 8 Quarters, Top 2 KPIs)

KPI 1: Net Sales (Total) | KPI 2: EPS — Diluted Operating

Pattern: Garmin has beaten EPS consensus in 7 of the last 8 quarters (the lone miss was Q3 2025, driven by Outdoor segment weakness), with an average EPS beat of ~12% — the bar is consistently set low, and the market has come to expect outperformance. Revenue beats are also the norm (7 of 8), though the magnitude is smaller. Source: Visible Alpha Consensus and Actuals Data.

3. Guidance & Commentary Evolution

Key Takeaway: Guidance is unchanged since the April 29 Q1 earnings call — management maintained all FY2026 targets despite a strong Q1 beat, consistent with their typical conservative posture. No post-earnings events (8-K, conference, investor day) have revised any metric.

4. Guidance vs. Estimate Revision Tracker

Key Takeaway: Estimates are essentially flat since the Q1 print — the post-earnings baseline has held, meaning there is no revision-driven cushion or risk. Consensus is tracking guidance rather than diverging, which is neutral for the setup.

Source: Visible Alpha Consensus and Actuals Data. As-of date for baseline: May 6, 2026 (5 trading days post Q1 2026 earnings). The flat revision trajectory reflects management's decision to hold guidance unchanged, which anchored sell-side estimates. The absence of any upward revision despite a strong Q1 beat means the Q2 bar has not been raised — a mild positive for the setup.

5. Stock Performance

Key Takeaway: GRMN is up only +2.4% since the Q1 earnings date vs. S&P 500 +4.1% — the stock has underperformed the market despite a strong Q1 beat, reflecting investor skepticism around the Outdoor miss and the decision to hold guidance. The sector ETF (XLY) is down -3.9%, so GRMN has outperformed consumer discretionary peers, suggesting the underperformance is company-specific rather than macro-driven.

GRMN vs. XLY (Consumer Discretionary ETF) vs. S&P 500 (SPY) — Indexed to 100 at April 28, 2026 (day before Q1 2026 earnings). Source: Stock Price Data (Yahoo Finance).

Sector ETF used: XLY (Consumer Discretionary Select Sector SPDR ETF). While Garmin spans multiple end markets, its largest revenue segments (Fitness, Outdoor) are consumer-facing discretionary categories, making XLY the most appropriate broad sector proxy. Note that Garmin's Aviation and Marine segments have industrial/commercial characteristics not captured by XLY.

Performance detail: GRMN opened Q1 earnings day (Apr 29) at $253.08 and closed at $251.14 before declining further to a trough of ~$225.75 on May 15 (down ~9% from the earnings close), driven by the Outdoor segment miss and guidance hold. The stock recovered through June and July, aided by broader market stabilization and a brief spike to $251 on July 16. As of July 27 close ($242.47), GRMN is essentially flat to the pre-earnings close of $247.81, while the S&P 500 has gained ~4%. No material post-earnings events (8-K guidance revisions, investor days) occurred to drive the stock.

6. Material News & Developments

Key Takeaway: The most important development since Q1 earnings is the Q2 2026 earnings call scheduled for July 30, 2026 — no material pre-announcements, guidance revisions, or 8-K filings have occurred since April 29, leaving the print as the primary catalyst.

• July 30, 2026 — Q2 2026 Earnings Call Scheduled: Garmin filed a press release on June 24, 2026 announcing the Q2 2026 earnings call for July 30, 2026. No pre-announcement or guidance update was included. Implication: management has not felt compelled to pre-announce, consistent with a quarter tracking in-line or better than internal expectations.
• April 29, 2026 — Q1 2026 Earnings: Guidance Held Despite Beat: Garmin reported Q1 2026 with revenue of $1.753B (+2.2% vs. consensus) and operating EPS of $2.09 (+13.6% vs. consensus). Management maintained full-year FY2026 guidance unchanged, citing early-year seasonality and the need to see more of the year unfold. The stock declined in pre-market on the Outdoor miss ($418M actual vs. $465M consensus, -10% miss) and guidance hold. Implication: the market's reaction set a low bar for Q2 — any Outdoor improvement could be a positive catalyst.
• Ongoing — Tariff Environment: Garmin noted on the Q1 call that tariff impacts are embedded in guidance at current trends, with significant safety stock buffering most cost impact into 2027. The company has not recorded any tariff refund benefit. Peers (Nike, Lululemon, Deckers) have all flagged tariff headwinds of 100–280bps on gross margins in Q2 2026. Implication: Garmin's safety stock buffer is a competitive advantage in 2026, but investors will watch for any update on the 2027 cost outlook.
• Ongoing — New Product Launches (Including New Categories): Management guided for ~100+ new products in 2026, including "some that represent new categories for Garmin." No specific products have been announced publicly since the Q1 call. Implication: any Q2 launch pull-forward — particularly in Outdoor — could surprise to the upside on segment revenue.
• Ongoing — Auto OEM Transition (BMW Wind-Down / Mercedes Ramp): The BMW program is in its "tail off cycle into phase out" in 2026, with the Mercedes program expected to ramp in 2027 at higher ASPs and complexity. Management described Mercedes as "a more complex unit and higher ASPs than BMW." Implication: Auto OEM will remain a modest drag in 2026 but is not a Q2 surprise risk given well-telegraphed trajectory.
• Ongoing — Subscription Services Expansion: Management highlighted Garmin Connect Plus and inReach connectivity services as growing strategic priorities. No specific subscriber metrics were disclosed. Implication: subscription revenue is a nascent but potentially margin-accretive growth vector that could become a more prominent part of the Q2 narrative.
• Ongoing — Apple WWDC (June 8, 2026) — Competitive Watch: Apple announced enhanced Siri AI integration for watchOS and expanded health app features (perimenopause/menopause cycle tracking) at WWDC. No new hardware was announced. Implication: Apple's software improvements are incremental rather than disruptive; Garmin management has consistently characterized new entrants as market-expanding rather than threatening, and this update does not change that view.
• Ongoing — Consumer Demand Signals: Management cited "strong registration rates" and "no worries for the near term" on demand at the Q1 call. Peers in active lifestyle (On Holding, Deckers/Hoka) reported strong Q2 demand trends, supporting the view that the premium active lifestyle consumer remains resilient. Implication: macro demand is not a headwind heading into Q2.

7. Peer Commentaries — Q2 2026 Read-Throughs

Key Takeaway: Peer commentary since the Q1 2026 earnings season is broadly constructive for Garmin's Q2 setup — the premium active lifestyle consumer remains resilient (positive for Fitness/Outdoor), aviation aftermarket demand is robust (positive for Aviation), and tariff headwinds appear manageable for companies with inventory buffers. The one cautionary note is that Lululemon's traffic disruption and Nike's sportswear weakness suggest the broader consumer is not uniformly strong.

Note: Only commentary from peers reporting after April 29, 2026 (Garmin's Q1 2026 earnings date) that speaks to Q2 2026 or current-quarter conditions is included below. Prior-quarter results commentary is excluded.

Active Lifestyle / Wearables / Fitness (Fitness & Outdoor Segment Read-Through)

• On Holding (ONON) — Q1 2026 Earnings (May 12, 2026) | POSITIVE READ-THROUGH FOR GARMIN FITNESS. On reported exceptional Q1 demand with "incredibly broad-based" consumer interest in premium active lifestyle products. Critically, the share of 18–24-year-olds in On's DTC customer base "significantly increased" in Q1 and "this trend has accelerated into early Q2" — a direct forward-looking signal for Q2 2026 demand. Average selling prices rose from ~$145 to over $170, indicating consumers are trading up. On reiterated full-year constant currency net sales growth guidance of "at least 23%" with confidence.
• Implication for GRMN: The premium active lifestyle consumer is healthy and spending on performance products heading into Q2. Garmin's Fitness segment, which drove the Q1 beat, should continue to benefit from the same secular tailwind. On's commentary that "consumers are choosing to spend where products are truly differentiated" directly supports Garmin's premium positioning.
• Deckers Brands / Hoka (DECK) — Q1 FY2027 Earnings (July 23, 2026) | POSITIVE READ-THROUGH FOR GARMIN FITNESS & OUTDOOR. Deckers reported strong underlying demand for Hoka and UGG despite a "pressured consumer backdrop," with management noting "people showing up for the brands they love." For Q2 FY2027 (calendar Q2 2026), Deckers guided consolidated revenue up ~5% with Hoka contributing high single-digit growth. Inventories are tight (down 5%), supporting full-price selling. Management noted "consumers are responding to newness and innovation" and saw no cancellations to the order book.
• Implication for GRMN: Hoka's continued momentum in performance running and trail (gaining share above $120 price point) is a positive read-through for Garmin's Outdoor segment, which targets the same active outdoor consumer. Deckers' commentary that "even in times of challenge, consumers gravitate to premium brands" supports Garmin's thesis that its customer base is more resilient than average.
• Lululemon (LULU) — Q1 2026 Earnings (June 4, 2026) | MIXED / CAUTIONARY READ-THROUGH. Lululemon reported a traffic disruption in late Q1 and early Q2 driven by negative social media commentary and underperforming product launches. The company guided Q2 2026 revenue down 2–3% and cut full-year guidance to flat-to-down 1%. North America is expected to decline low double digits in Q2. Importantly, management noted the disruption was "brand-specific" and that the broader athletic space showed "relative stability in trend."
• Implication for GRMN: Lululemon's weakness is idiosyncratic (brand controversy + product misses) rather than a macro signal. The company's own acknowledgment that the athletic category is stable is actually reassuring for Garmin. However, the North America consumer softness and elevated markdowns are a mild caution for any discretionary spend.
• Fossil Group (FOSL) — Q1 2026 Earnings (May 13, 2026) | MILDLY POSITIVE READ-THROUGH FOR WEARABLES MARKET. Fossil noted a "tailwind in the industry, particularly in the America region where a lot of younger consumers are coming back to the space" for traditional watches. The company is selling at higher AURs and seeing better gross margins. Fossil has exited the smartwatch business (280bps headwind from smartwatch exit), which is a market share opportunity for Garmin.
• Implication for GRMN: Fossil's smartwatch exit removes a low-end competitor and validates Garmin's premium positioning. The broader watch/wearable category tailwind from younger consumers is a positive signal for Garmin's Fitness segment.
• Ralph Lauren (RL) — Q4 FY2026 Earnings (May 21, 2026) | POSITIVE READ-THROUGH FOR PREMIUM CONSUMER. Ralph Lauren reported strong premium consumer demand with AUR up 16% in Q4, added 1.4M new DTC customers (low double-digit increase), and guided FY2027 constant currency revenue growth of mid-single digits. The core consumer "remained resilient exiting fiscal '26 and into the start of fiscal '27." Management noted the shift toward a "more elevated, younger, and less price-sensitive consumer base."
• Implication for GRMN: The premium consumer — Garmin's core customer — is healthy and spending. Ralph Lauren's commentary on resilient full-price selling and new customer acquisition supports Garmin's own observation that registration rates are "the strongest we've been experiencing in the near term."

Aviation (Aviation Segment Read-Through)

• RTX (Raytheon Technologies) — Q2 2026 Earnings (July 23, 2026) | STRONGLY POSITIVE READ-THROUGH FOR GARMIN AVIATION. RTX reported "exceptional demand" across commercial and defense markets, with a record backlog of $289B (up 22% YoY). Commercial aftermarket sales grew 10% at Collins and 25% at Pratt & Whitney. RTX raised full-year commercial aftermarket guidance to "low double digits" from "high single digits." Passenger air travel "remains resilient for the year" and global RPKs are expected to grow in all regions outside the Middle East. Airframers "continue to cite strong demand, with further growth expected in the second half."
• Implication for GRMN: Strong commercial aviation aftermarket demand and continued OEM production ramp are directly positive for Garmin's Aviation segment, which sells avionics to both OEM and aftermarket channels. RTX's raised guidance and record backlog suggest the aviation cycle remains in a multi-year upcycle. The Middle East disruption (RPKs down 50%+ for Middle East carriers) is a modest watch item but is not expected to materially impact Garmin's primarily North American and European aviation customer base.
• GE Aerospace (GE) — Q2 2026 Earnings (July 16, 2026) | STRONGLY POSITIVE READ-THROUGH FOR GARMIN AVIATION. GE raised full-year 2026 guidance across all metrics, with overall revenue now expected to grow "high teens" (up from "low double digits"). Commercial services growth raised to "low 20s" from "mid-teens." LEAP engine deliveries up 41% in H1. CEO Larry Culp stated: "We do not have a demand problem" — the challenge is supply-side. GE noted "aftermarket demand has been resilient" despite first-half departures being "roughly flat," and expects "a gradual return to modest departures growth in the second half."
• Implication for GRMN: GE's raised guidance and supply-constrained (not demand-constrained) aviation market is a strong positive for Garmin Aviation. The expectation for H2 departure growth acceleration supports Garmin's own guidance for "solid growth throughout the remainder of the year" in Aviation.
• TransDigm (TDG) — Q2 FY2026 Earnings (May 5, 2026) | POSITIVE READ-THROUGH FOR GARMIN AVIATION. TransDigm reported Q2 results "ahead of expectations" and raised full-year guidance. Commercial OEM revenue grew ~12% and commercial aftermarket grew 16% (excluding biz jet). Q2 commercial aftermarket bookings were an "all-time high." Boeing and Airbus are "continuing to ramp production rates" with airline demand "remaining high with backlogs increasing." The Middle East conflict caused a step-back in March/April flight activity, but TransDigm noted "no significant change in commercial aftermarket ordering activity" and expressed confidence in Q3 given no meaningful April impact.
• Implication for GRMN: Record aftermarket bookings and continued OEM production ramp are positive for Garmin's avionics business. TransDigm's commentary that the supply chain has "largely returned to where it was pre-COVID" reduces execution risk for Garmin's OEM customers.

Tariff / Macro Context (Cross-Segment)

• Tariff Read-Through Summary: Across peers, tariff headwinds in Q2 2026 range from 100–280bps on gross margins (Lululemon: 150bps gross impact; On Holding: ~100bps; Deckers: down due to tariffs and freight). Garmin's safety stock buffer is expected to shield most tariff cost impact in 2026, with more impact in 2027. Peers that have not recorded tariff refund benefits (Nike received a $986M one-time refund; Garmin and most others have not) are in a similar position to Garmin. The current tariff environment (10% incremental rate following court ruling) is lower than the Liberation Day peak, which is a mild positive for the consumer backdrop.
• Consumer Resilience Summary: The premium active lifestyle consumer is broadly resilient across peers (On Holding, Deckers, Ralph Lauren all confirm), while the mass-market consumer faces more pressure (Nike sportswear down double digits, Lululemon traffic disruption). Garmin's customer base — health-focused, active lifestyle, higher income — aligns with the resilient cohort. Management's own characterization of their customer as "a little more resilient than what the average reporting out there is" is supported by peer data.

8. Insider Transaction Activity

Key Takeaway: Insider activity since the Q1 earnings date is dominated by routine trust/GRAT restructuring transactions by Director Jonathan Burrell and gift transfers by Executive Chairman Min Kao — none of these are open-market buys or sells. The only open-market transactions are a small 10b5-1 planned sale by CFO Douglas Boessen (2,000 shares) and a minor open-market sale by Director Joseph Hartnett (643 shares). No clustered open-market buying or unusual discretionary selling stands out.

Source: Insider Transaction Data (SEC Form 4 filings). Open-market transactions only: CFO Boessen's 10b5-1 sale (2,000 shares) and Director Hartnett's small open-market sale (643 shares) are the only true market-facing transactions. All Burrell and Kao activity is GRAT/trust restructuring (Form 4 code G), which represents estate planning and carries no informational signal about management's view of the stock. No open-market buying has occurred since the Q1 earnings date. The absence of insider buying is neutral — not a negative signal given the estate-planning context of most activity.