Garmin wearables power another record quarter as 2026 guidance rises

Garmin is still having a very good year. Its latest quarterly numbers are in, and once again watches and wearables are doing a sizeable chunk of the heavy lifting.

The company reported record third-quarter revenue of $1.99 billion, up 12% from a year earlier, while operating income jumped 34% to $612 million. More interesting for us, both Fitness and Outdoor revenue climbed, with Garmin specifically pointing to strong wearable demand and adventure watches as the main drivers.

Wearables remain at the centre of Garmin’s growth

The Fitness segment generated $694 million during the quarter, up from $601 million a year ago. Garmin says growth was led by strong demand for wearables, with the recently launched CIRQA Smart Band getting a mention in the results.

The company moved into the screen-less tracker category a few months ago, with a device that sits somewhere between a traditional fitness band and Whoop. Garmin has also been steadily adding features since launch, including most recently phone notifications.

Outdoor was even stronger. Revenue reached $597 million, up 20% year over year, with Garmin saying the increase was primarily driven by adventure watches. That quarter included the arrival of the Fenix 9 family.

Put Fitness and Outdoor together and Garmin generated about $1.29 billion from the two divisions during the quarter. That’s roughly 65% of the company’s total revenue, although it is worth remembering that both segments include products beyond watches and fitness trackers.

The profitability is arguably even more striking. Fitness produced $231 million in operating income with a 33% operating margin, while Outdoor generated $233 million at a 39% margin. In other words, the two divisions produced almost $464 million of Garmin’s $612 million quarterly operating profit.

Garmin raises its outlook again

The broader numbers were strong as well. Garmin’s gross margin reached 63.3%, compared with 59.1% a year earlier, while its operating margin increased from 25.8% to 30.8%.

There is one detail worth keeping in mind here. Garmin says around $33 million of the gross-margin benefit came from refunds of tariffs it had previously paid. Lower product costs and a more favourable mix also helped, so the improvement was not simply the result of Garmin selling more expensive watches.

The company has now raised its full-year outlook again. Garmin expects 2026 revenue of approximately $8.15 billion and pro forma earnings of $10.80 per share, along with a 29% operating margin.

That is up from the $8.05 billion revenue and $10.00 EPS forecast Garmin issued after its second-quarter results in July. The relatively modest increase in the revenue forecast compared with the much larger EPS upgrade suggests Garmin expects the improved profitability seen this quarter to continue through the end of the year.

Garmin CEO Cliff Pemble says the company is seeing momentum heading into the holiday selling season. The company has already refreshed a large part of its premium watch lineup, and there are signs that its product pipeline is not empty yet.

There could be more useful detail later today. Garmin’s earnings call is scheduled for 10:30 a.m. Eastern, with the analyst Q&A usually providing considerably more colour than the prepared earnings release.