> ## Content Index > Fetch the complete content index at: https://www.bullished.co/llms.txt > Use this file to discover other available public pages before exploring further. # Garmin Raises 2026 Outlook, But Memory Costs Will Pull Margins Back To 'Historical Range' - URL: https://www.bullished.co/garmin-raises-2026-outlook-but-memory-costs-will-pull-margins-back-to-historical-range-66c931b4/ - Published: 2026-10-28T15:36:53.000Z - Updated: 2026-10-28T15:36:53.000Z - Description: The CEO said it is too early for a full 2027 outlook, while third-quarter free cash flow fell $132 million on inventory. - Author: Matteo Parrino - Tags: Earnings, GRMN, Industry: Technology [Garmin](https://www.bullished.co/tag/grmn/) raised its full-year revenue forecast to [$8.15 billion](https://seekingalpha.com/news/4658764-garmin-gaap-eps-of-2%5F80-beats-by-0%5F46-revenue-of-1%5F99b-beats-by-10m?ref=bullished.co), but CEO Clif Pemble said on the company's earnings call Wednesday that [higher memory costs](https://finance.yahoo.com/markets/stocks/articles/garmin-grmn-reports-q3-earnings-123003307.html?.tsrc=rss&ref=bullished.co) will bring its gross margin back to a "historical range." Garmin shares fell 6.79% to $269.69 in Wednesday trading, from a prior close of $289.34, though nothing on the call ties the drop to the margin comments. ## A cushion that is running out Garmin, which makes GPS-enabled fitness, outdoor, aviation, marine and automotive devices, has so far benefited from memory chips it bought at lower prices as safety stock. Pemble said new supplies are being bought "at current market prices, which are significantly higher than last year," a headwind that also pushes up inventory on the balance sheet. He said "it's too early to offer a comprehensive outlook for 2027," but expects the consolidated gross margin to return to a historical range "primarily due to higher memory costs." Garmin will lean on "vertical integration and scale of operations" to offset it, he said. Asked about pricing power, he called price one tool among several. CFO Doug Boessen said memory costs had a small effect in the third quarter, with more in the fourth, and that this is built into full-year gross margin guidance of about 61%. That is 130 basis points above the prior guidance and 230 basis points above 2025. ## Record quarter, higher guidance Third-quarter revenue rose 12% to [$1.986 billion](https://www.benzinga.com/markets/earnings/26/10/62657775/garmin-raises-2026-outlook-ahead-of-crucial-holiday-shopping-season?ref=bullished.co), with gross margin of 63.3%. Operating income climbed 34% to $612 million, and adjusted earnings per share rose 39% to $2.76. Margins got help from favorable segment mix, lower product costs and about $33 million in refunds of previously paid tariffs. Boessen said the majority of expected refunds have been received, and guidance includes only those already recorded. For the year, Garmin now expects operating margin of about 29% and adjusted earnings per share of about [$10.80](https://www.benzinga.com/markets/earnings/26/10/62657775/garmin-raises-2026-outlook-ahead-of-crucial-holiday-shopping-season?ref=bullished.co), up from $10.00\. Revenue guidance was $8.05 billion before. ## Inventory eats into cash Free cash flow was $293 million in the quarter, down $132 million from a year earlier, mainly because of more inventory on hand and prepayments to secure strategic components. Inventory stood at about $2.3 billion. Boessen said the prepayments are negotiated supplier by supplier because of memory supply constraints. Full-year free cash flow is now expected at about $1.1 billion, lower than the prior estimate for the same reason. Capital spending was $101 million in the quarter. ## Segments and capacity Outdoor revenue rose 20% to $597 million and fitness rose 16% to $694 million. Marine rose 16% to $310 million, aviation 5% to $253 million, and auto OEM fell 20% to $132 million. Pemble said the new Thailand factory is on track to begin production in the first quarter of 2027, adding that volumes have "basically reached our capacity." He expects a Mercedes-Benz domain controller program to drive significant auto growth in 2027. Garmin has said it will give a fuller picture of gross margin when it builds its 2027 plan. ### Sources - [Garmin (GRMN) Reports Q3 Earnings: What Key Metrics Have to Say](https://finance.yahoo.com/markets/stocks/articles/garmin-grmn-reports-q3-earnings-123003307.html?.tsrc=rss&ref=bullished.co) — Yahoo Finance - [Garmin GAAP EPS of $2.80 beats by $0.46, revenue of $1.99B beats by $10M (GRMN:NYSE)](https://seekingalpha.com/news/4658764-garmin-gaap-eps-of-2%5F80-beats-by-0%5F46-revenue-of-1%5F99b-beats-by-10m?ref=bullished.co) — seekingalpha.com - [Garmin Gears Up to Report Q3 Earnings: How to Play the Stock](https://finance.yahoo.com/markets/stocks/articles/garmin-gears-report-q3-earnings-133600941.html?ref=bullished.co) — Yahoo Finance - [Garmin Ltd. (GRMN) Stock Price, News, Quote & History - Yahoo Finance](https://ca.finance.yahoo.com/quote/GRMN/?ref=bullished.co) — Yahoo Finance - [Garmin Raises 2026 Outlook Ahead of Crucial Holiday Shopping Season](https://www.benzinga.com/markets/earnings/26/10/62657775/garmin-raises-2026-outlook-ahead-of-crucial-holiday-shopping-season?ref=bullished.co) — benzinga.com ### More on Garmin - [Garmin's Record 63.3% Gross Margin Includes A $33 Million Tariff Refund, And Memory Costs Are Coming](https://www.bullished.co/garmins-record-63-3-gross-margin-includes-a-33-million-tariff-refund-and-memory-costs-are-8a0b0e7b/) - [Garmin Raises 2026 Outlook To About $8.15 Billion In Sales After Record Quarter](https://www.bullished.co/garmin-raises-2026-outlook-to-about-8-15-billion-in-sales-after-record-quarter-36f47f32/) [All Garmin (GRMN) coverage →](https://www.bullished.co/tag/grmn/)