The paragraph introduces the earnings call for Garmin Limited's first quarter of 2024 and provides information about accessing the earnings press release and related materials. It also includes a disclaimer about forward-looking statements and introduces the company's president and chief executive officer and chief financial officer and treasurer. The speaker, Cliff Pemble, mentions that Garmin had strong growth in revenue and operating income in the first quarter of 2024.

In the first quarter, the company saw a 20% increase in consolidated revenue, reaching a new record of $1.38 billion. Four segments experienced double-digit growth, leading to a 51% increase in operating income. The fitness segment saw a 40% increase in revenue, driven by strong demand for advanced wearables. The outdoor segment also saw growth, with revenue increasing by 11%. Both segments saw improvements in gross and operating margins, resulting in higher operating income.

Garmin released their annual inReach SOS year-end review, highlighting the importance of their emergency response coordination center and their original docuseries, 7 Days Out. They also experienced growth in their aviation and marine segments, with the addition of new technologies and features, and were recognized as Supplier of the Year by Independent Boat Builders, Inc.

Garmin sponsored angler Justin Hamer won the recent Bassmaster Classic fishing tournament using their ECHOMAP Ultra 2 chartplotters, Force trolling motor, and LiveScope Plus sonar system. The company also launched new products such as the GPSMAP 16 family chartplotters and the Panoptix PS70 deepwater live sonar. In the auto OEM segment, revenue increased by 58% due to increased shipments of domain controllers to BMW. The company also received new business for designing and manufacturing digital instrument clusters and infotainment systems for 2-wheel vehicles and industrial trucks. In the first quarter, Garmin's revenue was $1.382 billion, a 20% increase from the previous year. Gross margin increased by 120 basis points, and operating expense decreased by 330 basis points. Operating income increased by 51%, and GAAP EPS was $1.43.

The company saw double-digit growth in several segments, including auto OEM, fitness, marine, and outdoor. This growth was achieved in all three regions, with the highest growth in EMEA. Operating expenses increased due to higher research and development and SG&A costs. The company ended the quarter with a strong balance sheet and generated free cash flow. Dividends were paid and the effective tax rate increased due to global minimum tax requirements. The call was then opened for Q&A.

Joseph Cardoso asks about the shape of the year and potential differences in revenue seasonality compared to previous years. Clifton Pemble mentions the timing of new product releases and the strong performance of wearables in the fitness and outdoor sectors, which are unique and highly differentiated. He also notes that people appreciate their products for inspiration and wellness.

The speaker discusses the strong sales and inventory levels at Garmin. They mention that they expect inventory to increase by the end of the year and that they are not updating their revenue guidance at this time. The speaker also mentions that gross margins for outdoor and fitness products were up year-over-year and sequentially due to a favorable product mix.

The company's gross margin was up year-over-year due to product mix and lower freight costs. They are constantly looking for ways to lower costs. The auto business is expected to have a high teens gross margin and mid-single digit operating margin. The company has secured significant new business and has more awarded business ahead.

The speaker asks about the company's performance in the second quarter and if there were any one-time events that could affect future performance. The CEO mentions new product releases as a factor and also discusses the company's cash reserves and priorities for using it.

The company has been investing in its business through manufacturing facilities and strategic acquisitions. They also prioritize cash for share repurchases, but were in a blackout for most of Q1. Channel inventory levels are healthy and retailers are not overstocking. The company has seen strong sell-through rates and feels good about the availability of product. The company also expects better fixed cost absorption and operating leverage in the second and third quarters as they rebuild inventory.

In the paragraph, Douglas Boessen and Clifton Pemble from Garmin discuss the company's margin performance and growth in various regions. They mention that inventory rebuild is not a major factor in their margin performance, and that the growth is mostly driven by higher unit volumes. They also note that Europe and Asia have seen strong growth, but this is partly due to higher auto OEM volumes and currency issues. They also mention the strong performance of the marine segment.

The speaker provides an update on JL Audio's performance post-acquisition and mentions that it is in line with expectations. They also discuss the state of the marine market, which has stabilized, and note that boat inventory issues have not significantly impacted them. The full year benefit from JL Audio is expected to be about 15% of the total marine business. The speaker also addresses concerns about consumer caution and confidence, stating that their strong mix and innovation in the marketplace are outweighing any potential negative effects.

The speaker discusses the impact of consumer mix on the company's subscription rates for new products. They mention that their products tend to have high innovation and desirability, and they have seen strong response to both high-end and lower-end products. They do not believe there has been a significant trend of customers "mixing down" to lower-priced products. The Q&A session has ended and the call is now concluded.

This summary was generated with AI and may contain some inaccuracies.