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 (NASDAQ:GRMN) 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.
Recreational boat manufacturer Brunswick (NYSE:BC) 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.