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Instead of growing by 5 percent, Garmin's 2017 fitness segment revenue is now expected to drop by 5 percent. CEO Cliff Pemble attributed the downturn to the decline of the basic activity tracker market.

Garmin Reports 15 Percent Drop in Q2 2017 Fitness Revenue, Cites 'Market Declines'

Garmin CEO Cliff Pemble attributed the company's fitness segment downturn to the "timing of product introductions" and general market declines. Moving forward, the segment will focus on developing and marketing advanced wearable devices.

Garmin, Schaffhausen, Switzerland, reported $181 million in second-quarter revenue, a 15 percent decrease from $212.8 million during the same period last year.

Twenty-six weeks into 2017, the company has reported $318.8 million in fitness revenue, a 10 percent drop year-over-year. CEO Cliff Pemble attributed the downturn to the "timing of product introductions" and general market declines.

“The demand for advanced wearables was particularly strong, but was partially offset by negative trends in the activity tracker market," Pemble said in the report. "Our results thus far give us confidence in raising our outlook for the remainder of the year.”

Pemble has adjusted the company's year-end guidance due to lower expectations. The fitness segment was originally projected to grow by five percent but is now expected to decline five percent. Moving forward, Pemble anticipates ongoing declines for basic activity trackers, while other products should experience market "refreshes" into the second half of the year. The fitness segment's current long-term goal is to focus on developing and marketing advanced wearable devices, according to the report.

Garmin's fitness segment brought in $818.5 million in year-end 2016 revenue, which was a 24 percent increase from 2015. Earlier this year, Pemble had projected that the fitness segment would be the company's "largest revenue contributor" in 2017.

Following disappointing fiscal quarters from other wearables vendors such as Fitbit, financial analysts at L&F Capital Management have speculated that consumer boredom and added competition have convoluted the greater market

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