Garmin Ltd. shares fell 9.7% to $92.60 Wednesday afternoon after second-quarter revenue fell short of analysts’ expectations and the company lowered guidance.
The navigation, communications and information devices company reported second-quarter revenue of $1.24 billion, a 6% drop from the pandemic-driven prior-year quarter and missing the FactSet consensus for $1.34 billion.
Second-quarter earnings per share came to $1.33. Adjusted EPS for the quarter was $1.44, in line with the FactSet consensus.
The company lowered its full-year revenue guidance to about $5 billion. In April, Garmin backed guidance of $5.5 billion.
The adjusted EPS outlook for the year is $4.90 versus earlier guidance of $5.90.
Chief Executive Cliff Pemble in the company’s conference call pointed to the U.S. dollar strengthening significantly over the prior year, which hit second-quarter revenue by about $57 million.
“From a business segment perspective, underperformance in fitness had a significant impact on our results,” Mr. Pemble said. “And, finally, we continue to experience supply chain constraints which limited the orders we could fill in the quarter, specifically in marine and aviation.”
Chief Financial Officer Douglas Boessen said in the call that assuming the euro will be at parity with the dollar through the remainder of the year, year-over-year unfavorable revenue impact will accelerate in the back half of 2022.
Revenue from the fitness segment dropped 34% in the second quarter, with declines across all categories led by advanced wearables and cycling products.
These are categories which benefited significantly from pandemic-fueled demand in the first half of 2021, Mr. Pemble said.