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Here's Why Garmin Is Set Up to Prosper After the Coronavirus Crisis

By Howard Smith – Aug 17, 2020 at 4:03PM

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Trends emerging from the pandemic include sectors that Garmin directly supplies.

While many sectors have been hit hard by impacts from the COVID-19 pandemic, some companies have recently been reporting a strong rebound in demand. Outdoor recreation equipment suppliers have seen increasing demand as people can stay socially distant on vacation with recreational vehicles (RVs), boats, and off-road vehicles. 

Outdoor enthusiasts have long been turning to Garmin (GRMN -1.78%) for high-tech GPS devices used in running, hiking, boating, and flying, among other activities. Growth in those areas has been strong for years for Garmin, and a surge in new users may lead to an even longer runway. 

family on boat in a lake

Image source: Getty Images.

Recreational boat manufacturer Brunswick (BC -1.30%) recently noted strong retail demand as stay-at-home restrictions eased across the U.S. The maker of the Sea Ray, Boston Whaler, and Bayliner brands said demand accelerated into May and June, "with sales to first-time purchasers or returning lapsed boaters representing approximately half of new boat sales."

Garmin's marine segment has grown at a compound annual growth rate (CAGR) of 16.6% between 2017 and 2019. And in the first quarter of 2020, prior to impacts from the pandemic, marine grew 22% compared to the prior-year period.

And marine is just one of Garmin's four main segments with strong growth. Fitness, outdoor, and aviation have also had growth rates of between 15% and 20% in the past few years. With RV manufacturers like Winnebago and Thor Industries recently reporting strong sales trends, the outdoor recreation trend looks like it is here to stay. As a supplier of devices used in virtually every related activity -- including a new RV navigator that also should help the declining auto segment -- Garmin may be a benefactor of a direction that is emerging from the pandemic. 

Howard Smith owns shares of Garmin. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Garmin Ltd. Stock Quote
Garmin Ltd.
$80.31 (-1.78%) $-1.46
Winnebago Industries, Inc. Stock Quote
Winnebago Industries, Inc.
$53.21 (0.07%) $0.04
Brunswick Corporation Stock Quote
Brunswick Corporation
$65.45 (-1.30%) $0.86
Thor Industries, Inc. Stock Quote
Thor Industries, Inc.
$69.98 (1.57%) $1.08

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