01-05-2025
Garmin's $100 Million Tariff Impact Could Mean Higher Watch Prices For All
Garmin recently held a shareholder earnings call during which the company announced it expects Trump tariffs could impact the company to the tune of $100 million in 2025 alone.
Garmin Forerunner 965
'Our guidance assumes a modest reduction of demand moving forward,' said Garmin CEO Clifton Pemble.
'Using these assumptions, we estimate the gross impact from tariffs on our 2025 results prior to any mitigations will be approximately $100 million of increased cost.'
Garmin's stock value dropped by almost 10% in recent days, despite overall strong reporting in the company's Q1 2025 figures.
While Garmin has not announced any clearly tariff-related price rises in recent weeks, Pemble does say more mitigations are planned.
'We are pursuing mitigations, some of which have already been established, while others will take more time. We are not ruling anything out and we intend to be strategic and selective with these actions,' Pemble said.
One key juncture will be Garmin's next big watch release, which is expected to be the Forerunner 970, potentially heading for a reveal within weeks.
Garmin's last notable release was the Instinct 3 Tactical, which sells for $549 in its Solar edition, $599 in the AMOLED variant. That's a $100 leap over the standard version, where in the last generation the Tactical model of the Instinct 2 came at a $50 premium.
The Forerunner 970 will be a more important case study in how Garmin will deal with tariffs through consumer pricing going forward. Not only is that a fresh line, rather than a sub-set of an existing one, it's the successor to one of the most strongly recommended Garmin watches of recent years, the Forerunner 965. Garmin needs to get this one right.
Garmin's watches are not primarily, as some might assume, assembled in China, but Taiwan. While higher-rate U.S. tariffs are currently on pause, Taiwan is due to revert to 32%.
However, Garmin's current planning is based on Taiwan sticking at the current lower 10% level.
'It's important to note that approximately 25% of our revenue is generated in the U.S. market from products manufactured outside of the U.S., primarily in Taiwan,' said Pemble.
'Our assumptions include a 10% baseline tariff on all products manufactured outside of the U.S. including those manufactured in Taiwan.'
Garmin's Q1 2025 financial reporting included a 20% increase in its Outdoor segment revenues, to $438 million, and a 12% increase in its Fitness category, to $385 million.
