2. Revenue
To further depict how the nature, amount, timing and uncertainty of the Company's revenue and cash flows are affected by economic factors, Garmin disaggregates revenue (or “net sales”) by geographic region, major product category, and pattern of recognition.
Disaggregated revenue by geographic region (Americas, EMEA, and APAC) is presented in Note 11 – Segment Information and Geographic Data. Note 11 also contains disaggregated revenue information of the five major product categories identified by the Company (fitness, outdoor, aviation, marine, and auto OEM), which also represent the Company’s operating segments.
A large majority of the Company’s revenue is recognized on a point in time basis, usually once the product is shipped and title and risk of loss have transferred to the customer. Revenue recognized over time relates to performance obligations that are satisfied over the estimated life of the product or contractual service period and is primarily within the outdoor and aviation segments, and, to a lesser extent, within the auto OEM, fitness, and marine segments. Revenue disaggregated by pattern of recognition, based on the timing of transfer of the goods or services, is presented in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13-Weeks Ended |
|
|
26-Weeks Ended |
|
|
|
June 27, 2026 |
|
|
June 28, 2025 |
|
|
June 27, 2026 |
|
|
June 28, 2025 |
|
Point in time |
|
$ |
1,938,804 |
|
|
$ |
1,731,996 |
|
|
$ |
3,607,942 |
|
|
$ |
3,185,350 |
|
Over time |
|
|
83,288 |
|
|
|
82,568 |
|
|
|
167,640 |
|
|
|
164,313 |
|
Net sales |
|
$ |
2,022,092 |
|
|
$ |
1,814,564 |
|
|
$ |
3,775,582 |
|
|
$ |
3,349,663 |
|
Transaction price and costs associated with the Company’s unsatisfied performance obligations are reflected as deferred revenue and deferred costs, respectively, on the Company’s condensed consolidated balance sheets. Such amounts are recognized ratably over the applicable estimated useful life or contractual service period. Changes in deferred revenue and costs during the 26-week period ended June 27, 2026 are presented below:
|
|
|
|
|
|
|
|
|
|
|
26-Weeks Ended
June 27, 2026 |
|
|
|
Deferred
Revenue (1) |
|
|
Deferred
Costs (2) |
|
Balance, beginning of period |
|
$ |
127,923 |
|
|
$ |
21,911 |
|
Deferrals in period |
|
|
168,745 |
|
|
|
28,425 |
|
Recognition of deferrals in period |
|
|
(167,640 |
) |
|
|
(32,733 |
) |
Balance, end of period |
|
$ |
129,028 |
|
|
$ |
17,603 |
|
(1) Deferred revenue is comprised of both deferred revenue and noncurrent deferred revenue per the condensed consolidated balance sheets.
(2) Deferred costs are comprised of both deferred costs and noncurrent deferred costs per the condensed consolidated balance sheets.
Of the $167,640 of deferred revenue recognized in the 26-week period ended June 27, 2026, approximately $73,000 was deferred as of the beginning of the period. Of the $129,028 of deferred revenue as of June 27, 2026, the Company expects to recognize approximately 87% ratably over a total period of three years or less.
The following tables display additional information regarding gross unrealized losses and fair value by major security type for available-for-sale securities in an unrealized loss position as of June 27, 2026 and December 27, 2025.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 27, 2026 |
|
|
|
Less than 12 Consecutive Months |
|
|
12 Consecutive Months or Longer |
|
|
Total |
|
|
|
Gross Unrealized Losses |
|
|
Fair Value |
|
|
Gross Unrealized Losses |
|
|
Fair Value |
|
|
Gross Unrealized Losses |
|
|
Fair Value |
|
U.S. Treasury securities |
|
$ |
(138 |
) |
|
$ |
7,848 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(138 |
) |
|
$ |
7,848 |
|
Agency securities |
|
|
(1,351 |
) |
|
|
101,128 |
|
|
|
(8 |
) |
|
|
6,991 |
|
|
|
(1,359 |
) |
|
|
108,119 |
|
Mortgage-backed securities |
|
|
(254 |
) |
|
|
47,312 |
|
|
|
(640 |
) |
|
|
8,137 |
|
|
|
(894 |
) |
|
|
55,449 |
|
Corporate debt securities |
|
|
(11,366 |
) |
|
|
912,210 |
|
|
|
(1,535 |
) |
|
|
155,985 |
|
|
|
(12,901 |
) |
|
|
1,068,195 |
|
Municipal securities |
|
|
(1,216 |
) |
|
|
104,621 |
|
|
|
(642 |
) |
|
|
69,275 |
|
|
|
(1,858 |
) |
|
|
173,896 |
|
Other |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
(14,325 |
) |
|
$ |
1,173,119 |
|
|
$ |
(2,825 |
) |
|
$ |
240,388 |
|
|
$ |
(17,150 |
) |
|
$ |
1,413,507 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 27, 2025 |
|
|
|
Less than 12 Consecutive Months |
|
|
12 Consecutive Months or Longer |
|
|
Total |
|
|
|
Gross Unrealized Losses |
|
|
Fair Value |
|
|
Gross Unrealized Losses |
|
|
Fair Value |
|
|
Gross Unrealized Losses |
|
|
Fair Value |
|
U.S. Treasury securities |
|
$ |
(3 |
) |
|
$ |
7,981 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(3 |
) |
|
$ |
7,981 |
|
Agency securities |
|
|
(217 |
) |
|
|
54,089 |
|
|
|
(99 |
) |
|
|
6,900 |
|
|
|
(316 |
) |
|
|
60,989 |
|
Mortgage-backed securities |
|
|
(193 |
) |
|
|
15,074 |
|
|
|
(1,315 |
) |
|
|
14,664 |
|
|
|
(1,508 |
) |
|
|
29,738 |
|
Corporate debt securities |
|
|
(1,469 |
) |
|
|
222,514 |
|
|
|
(3,155 |
) |
|
|
301,363 |
|
|
|
(4,624 |
) |
|
|
523,877 |
|
Municipal securities |
|
|
(193 |
) |
|
|
11,094 |
|
|
|
(2,008 |
) |
|
|
147,899 |
|
|
|
(2,201 |
) |
|
|
158,993 |
|
Other |
|
|
(2 |
) |
|
|
301 |
|
|
|
(39 |
) |
|
|
1,004 |
|
|
|
(41 |
) |
|
|
1,305 |
|
Total |
|
$ |
(2,077 |
) |
|
$ |
311,053 |
|
|
$ |
(6,616 |
) |
|
$ |
471,830 |
|
|
$ |
(8,693 |
) |
|
$ |
782,883 |
|
As of June 27, 2026 and December 27, 2025, the Company had not recognized an allowance for credit losses on any securities in an unrealized loss position.
The Company has not recorded an allowance for credit losses and charge to other income (expense) for the unrealized losses on U.S. Treasury, agency, mortgage-backed, corporate debt, municipal, and other securities presented above because the Company does not consider the declines in fair value to have resulted from credit losses. The Company has not observed a significant deterioration in credit quality of these securities, which are highly rated with moderate to low credit risk. Declines in value are largely attributable to current global economic conditions. The securities continue to make timely principal and interest payments, and the fair values are expected to recover as they approach maturity. Management does not intend to sell the securities, nor is it more likely than not that the Company will be required to sell the securities, before the respective recoveries of their amortized cost bases, which may be maturity.
The amortized cost and fair value of marketable securities at June 27, 2026, by maturity, are shown below.
|
|
|
|
|
|
|
|
|
|
|
Amortized Cost |
|
|
Fair Value |
|
Due in one year or less |
|
$ |
333,428 |
|
|
$ |
331,955 |
|
Due after one year through five years |
|
|
1,628,983 |
|
|
|
1,618,916 |
|
Due after five years through ten years |
|
|
85,068 |
|
|
|
83,376 |
|
Due after ten years |
|
|
1,812 |
|
|
|
1,388 |
|
Total |
|
$ |
2,049,291 |
|
|
$ |
2,035,635 |
|
5. Income Taxes
The Company recorded income tax expense of $109,141 in the 13-week period ended June 27, 2026, compared to income tax expense of $79,429 in the 13-week period ended June 28, 2025. The effective tax rate was 16.8% in the second quarter of 2026, compared to 16.5% in the second quarter of 2025. The increase in effective tax rate between comparative periods was primarily due to changes in income mix by jurisdiction.
The Company recorded income tax expense of $176,591 in the 26-week period ended June 27, 2026, compared to income tax expense of $135,737 in the 26-week period ended June 28, 2025. The effective tax rate was 15.7% in the first half of 2026, compared to 15.6% in the first half of 2025. The increase in effective tax rate between comparative periods was primarily due to changes in income mix by jurisdiction.
6. Inventories
The details of inventories consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
June 27,
2026 |
|
|
December 27,
2025 |
|
Raw materials |
|
$ |
733,547 |
|
|
$ |
618,228 |
|
Work-in-process |
|
|
269,026 |
|
|
|
259,011 |
|
Finished goods |
|
|
963,488 |
|
|
|
895,018 |
|
Inventories |
|
$ |
1,966,061 |
|
|
$ |
1,772,257 |
|
7. Warranty Reserves
The Company accrues for estimated future warranty costs at the time products are sold. The Company provides standard warranties to its retail partners and end-users. The standard warranty generally provides for products to be free from defects in materials or workmanship, and the warranty period is generally one to two years from the date of shipment, while certain aviation, marine, and auto OEM products have a standard warranty period of two years or more from the date of installation. The Company’s estimates of costs to service its warranty obligations are based on historical experience and management’s expectations and judgments of future conditions, with most claims resolved within a year of the sale. The following reconciliation presents details of the changes in the Company's accrued warranty costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13-Weeks Ended |
|
|
26-Weeks Ended |
|
|
|
June 27, 2026 |
|
|
June 28, 2025 |
|
|
June 27, 2026 |
|
|
June 28, 2025 |
|
Balance - beginning of period |
|
$ |
70,932 |
|
|
$ |
61,142 |
|
|
$ |
72,921 |
|
|
$ |
62,473 |
|
Accrual for products sold (1) |
|
|
25,165 |
|
|
|
31,223 |
|
|
|
41,577 |
|
|
|
53,273 |
|
Expenditures |
|
|
(24,537 |
) |
|
|
(21,168 |
) |
|
|
(42,938 |
) |
|
|
(44,549 |
) |
Balance - end of period |
|
$ |
71,560 |
|
|
$ |
71,197 |
|
|
$ |
71,560 |
|
|
$ |
71,197 |
|
(1) Changes in cost estimates related to pre-existing warranties were not material and are aggregated with accruals for new warranty contracts in the ‘accrual for products sold’ line.
8. Commitments and Contingencies
Commitments
The Company is party to certain commitments that require the future purchase of goods or services (“unconditional purchase obligations”). The Company’s unconditional purchase obligations primarily consist of payments for inventory, capital expenditures, and other indirect purchases in connection with conducting its business. The aggregate amount of purchase orders and other commitments open as of June 27, 2026 that may represent noncancelable unconditional purchase obligations having a remaining term in excess of one year was approximately $589,000.
Certain cash balances are held as collateral in relation to bank guarantees. This restricted cash is reported within other assets on the condensed consolidated balance sheets and totaled $735 and $714 as of June 27, 2026 and December 27, 2025, respectively. The total of the cash and cash equivalents balance and the restricted cash reported within other assets in the condensed consolidated balance sheets equals the total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows.
Contingencies
Management of the Company currently does not believe it is reasonably possible that the Company may have incurred a material loss, or a material loss in excess of recorded accruals, with respect to loss contingencies in the aggregate, for the fiscal quarter ended June 27, 2026. The results of legal proceedings, investigations and claims, however, cannot be predicted with certainty. An adverse resolution of one or more of such matters in excess of management’s expectations could have a material adverse effect in the particular quarter or fiscal year in which a loss is recorded, but based on information currently known, the Company does not believe it is likely that losses from such matters would have a material adverse effect on the Company’s business or its consolidated financial position, results of operations or cash flows.
The Company settled or resolved certain matters during the 13-week and 26-week periods ended June 27, 2026 that did not individually or in the aggregate have a material impact on the Company’s business or its consolidated financial position, results of operations or cash flows.
On February 20, 2026, the U.S. Supreme Court ruled that the tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) were unauthorized. During the 13-week period ended June 27, 2026, the Company received refunds of approximately $21 million of previously paid IEEPA tariffs. The Company recognizes the refunds as a reduction of cost of goods sold when amounts become realized or realizable. As of June 27, 2026, there were additional potential refunds related to previously paid IEEPA tariffs, which have not been recognized in the Company’s consolidated financial statements.
9. Stockholders' Equity
Dividends
Under Swiss corporate law, dividends must be approved by shareholders at the annual general meeting of the Company’s shareholders. Approved dividends are payable in four equal installments on dates determined by the Board of Directors. A reduction of retained earnings and a corresponding liability are recorded at the time of shareholder approval and are periodically adjusted based on the number of applicable shares outstanding.
The Company's shareholders approved the following dividends:
|
|
|
|
|
|
|
|
|
Approval Date |
|
Dividend Payment Date |
|
Record Date |
|
Dividend Per Share |
|
Fiscal 2026 |
|
|
|
|
|
|
|
June 5, 2026 |
|
June 26, 2026 |
|
June 15, 2026 |
|
$ |
1.05 |
|
June 5, 2026 |
|
September 25, 2026 |
|
September 11, 2026 |
|
$ |
1.05 |
|
June 5, 2026 |
|
December 24, 2026 |
|
December 11, 2026 |
|
$ |
1.05 |
|
June 5, 2026 |
|
March 26, 2027 |
|
March 12, 2027 |
|
$ |
1.05 |
|
Total |
|
|
|
|
|
$ |
4.20 |
|
|
|
|
|
|
|
|
|
Fiscal 2025 |
|
|
|
|
|
|
|
June 6, 2025 |
|
June 27, 2025 |
|
June 16, 2025 |
|
$ |
0.90 |
|
June 6, 2025 |
|
September 26, 2025 |
|
September 12, 2025 |
|
$ |
0.90 |
|
June 6, 2025 |
|
December 26, 2025 |
|
December 12, 2025 |
|
$ |
0.90 |
|
June 6, 2025 |
|
March 27, 2026 |
|
March 13, 2026 |
|
$ |
0.90 |
|
Total |
|
|
|
|
|
$ |
3.60 |
|
|
|
|
|
|
|
|
|
Fiscal 2024 |
|
|
|
|
|
|
|
June 7, 2024 |
|
June 28, 2024 |
|
June 17, 2024 |
|
$ |
0.75 |
|
June 7, 2024 |
|
September 27, 2024 |
|
September 13, 2024 |
|
$ |
0.75 |
|
June 7, 2024 |
|
December 27, 2024 |
|
December 13, 2024 |
|
$ |
0.75 |
|
June 7, 2024 |
|
March 28, 2025 |
|
March 14, 2025 |
|
$ |
0.75 |
|
Total |
|
|
|
|
|
$ |
3.00 |
|
|
|
|
|
|
|
|
|
Share Repurchase Program
On February 16, 2024, the Board of Directors approved a share repurchase program (the “2024 Program”) authorizing the Company to repurchase up to $300,000 of the common shares of Garmin Ltd., exclusive of the cost of any associated excise tax. The 2024 Program, which had an expiration date of December 26, 2026, was terminated early on February 19, 2026. Share repurchases could be made in the open market or in privately negotiated transactions, including under plans complying with the provisions of Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The timing and volume of share repurchases were subject to market conditions, business conditions and applicable laws, and were at management’s discretion. The 2024 Program did not require the purchase of any minimum number of shares. As of the date of termination, the Company had repurchased 1,375 shares for $274,626 under the 2024 Program.
11. Segment Information and Geographic Data
Garmin is organized in the five operating segments of fitness, outdoor, aviation, marine, and auto OEM, which represent the primary markets served by the Company. These operating segments are also the Company's reportable segments.
The Company’s Chief Executive Officer, who has been identified as the Chief Operating Decision Maker (CODM), uses operating income (loss) as the primary measure of profit or loss to assess segment performance. Operating income (loss) represents net sales less costs of goods sold and operating expenses. Net sales are directly attributed to each segment. Most costs of goods sold and the majority of operating expenses are also directly attributed to each segment, while certain other costs of goods sold and operating expenses are allocated to the segments in a reasonable manner considering the specific facts and circumstances of the costs or expenses being allocated. The accounting policies of the segments are the same as those described in Note 1 - Accounting Policies. There are no inter-segment sales or transfers.
The Company’s segments share many common resources, infrastructures and assets in the normal course of business, and certain assets are therefore not separately tracked by segment. Thus, the Company does not report accounts receivable, inventories, property and equipment, intangible assets, capital expenditures, depreciation expense, or amortization expense by segment to the CODM.
The CODM utilizes operating income (loss) to assess segment performance and make decisions about the allocation of operating and capital resources by analyzing future opportunities and recent operating income (loss) results, trends, and variances of each segment in relation to forecasts and historical performance.
Net sales, cost of goods sold, gross profit, significant segment expenses, and operating income (loss) for each of the Company’s five reportable segments are presented below.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The discussion set forth below, as well as other portions of this Quarterly Report on Form 10-Q, contain statements concerning potential future events. Such forward-looking statements are based upon assumptions by management, as of the date of this Quarterly Report on Form 10-Q, including assumptions about risks and uncertainties faced by the Company. Readers can identify these forward-looking statements by their use of such words as "future", "expects", "anticipates", "believes", “estimates”, “would”, “could”, “can”, “may,” or other similar words or other comparable terms. If any of the Company’s assumptions prove incorrect or should unanticipated circumstances arise, actual results could materially differ from those anticipated by such forward-looking statements. The differences could be caused by a number of factors or combination of factors including, but not limited to, those factors identified in Part II, Item 1A of this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the year ended December 27, 2025. Readers are strongly encouraged to consider those factors when evaluating any forward-looking statement concerning the Company. These forward-looking statements are made as of the date hereof, and the Company disclaims any obligation to update any forward-looking statements in this Quarterly Report on Form 10-Q to reflect future events or developments, except as required by law.
The information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Condensed Consolidated Financial Statements and Notes thereto included in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 27, 2025. Unless the context otherwise requires, references in this document to "we", "us", "our", the "Company" and similar terms refer to Garmin Ltd. and its subsidiaries.
Unless otherwise indicated, amounts set forth in the discussion below are in thousands.
Company Overview
The Company is a leading worldwide provider of wireless devices, many of which feature location technology such as Global Positioning System (GPS), and applications that are designed for people who live an active lifestyle. Garmin is organized in the five operating segments of fitness, outdoor, aviation, marine, and auto OEM, which represent the primary markets served by the Company. Garmin designs, develops, manufactures, markets, and distributes a diverse family of GPS-enabled products and other navigation, communications, sensor-based and information products and services for these markets, as well as products installed by original equipment manufacturers (OEMs) and for aftermarket applications. Garmin products are sold through a variety of indirect distribution channels, including a large worldwide network of independent retailers, dealers, distributors, installation and repair shops, and OEMs. Garmin also sells its products and services directly through the Garmin online webshop (garmin.com), subscriptions for connected services, and Garmin retail stores.
Business Environment Update
Global economic and geopolitical conditions impact our operations and financial results, although we believe our vertically integrated and diversified business model enables us to be resilient and flexible in a dynamic business environment. Recent global supply constraints of memory chips have increased operational complexities and costs, which may unfavorably impact our future gross margin. Foreign currency fluctuations and rapidly changing global trade policies, particularly those affecting the United States (“U.S.”), increase the economic and operational uncertainties that could significantly impact our business and results of operations.
Refer to Part II, Item 1A, “Risk Factors” of this Quarterly Report for further discussion of the risks and uncertainties facing our Company.
Results of Operations
The following tables and discussion provide an analysis of our results of operations for the second quarter of 2026 compared to the second quarter of 2025 and the first half of 2026 compared to the first half of 2025.
Comparison of 13-Weeks Ended June 27, 2026 and June 28, 2025
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
13-Weeks Ended
June 27, 2026 |
|
|
Year-over-Year Change |
|
|
13-Weeks Ended
June 28, 2025 |
|
Fitness |
|
$ |
756,823 |
|
|
|
25 |
% |
|
$ |
605,425 |
|
Percentage of Total Net Sales |
|
|
37 |
% |
|
|
|
|
|
33 |
% |
Outdoor |
|
|
482,740 |
|
|
|
(2 |
%) |
|
|
490,357 |
|
Percentage of Total Net Sales |
|
|
24 |
% |
|
|
|
|
|
27 |
% |
Aviation |
|
|
268,749 |
|
|
|
8 |
% |
|
|
249,366 |
|
Percentage of Total Net Sales |
|
|
13 |
% |
|
|
|
|
|
14 |
% |
Marine |
|
|
341,369 |
|
|
|
14 |
% |
|
|
299,262 |
|
Percentage of Total Net Sales |
|
|
17 |
% |
|
|
|
|
|
17 |
% |
Auto OEM |
|
|
172,411 |
|
|
|
1 |
% |
|
|
170,154 |
|
Percentage of Total Net Sales |
|
|
9 |
% |
|
|
|
|
|
9 |
% |
Total |
|
$ |
2,022,092 |
|
|
|
11 |
% |
|
$ |
1,814,564 |
|
Net sales (or “revenue”) increased 11% for the 13-week period ended June 27, 2026 when compared to the year-ago quarter. Total unit sales in the second quarter of 2026 increased by approximately 9% to 5,686 when compared to total unit sales of 5,203 in the second quarter of 2025, which differs from the percent increase in revenue primarily due to shifts in segment and product mix. Fitness was the largest portion of our revenue mix in the second quarter of 2026 at 37% compared to 33% in the second quarter of 2025.
The increase in fitness revenue was driven by growth across all product categories, led by strong demand for advanced wearables. The increase in aviation revenue was driven by growth in OEM and aftermarket product categories. The increase in marine revenue was driven by growth across multiple product categories. The increase in auto OEM revenue was primarily driven by growth in domain controllers. The outdoor revenue decrease was primarily due to declines in consumer auto and adventure watches.
Gross Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
13-Weeks Ended
June 27, 2026 |
|
|
Year-over-Year Change |
|
|
13-Weeks Ended
June 28, 2025 |
|
Fitness |
|
$ |
480,723 |
|
|
|
32 |
% |
|
$ |
364,670 |
|
Percentage of Segment Net Sales |
|
|
64 |
% |
|
|
|
|
|
60 |
% |
Outdoor |
|
|
332,319 |
|
|
|
2 |
% |
|
|
324,429 |
|
Percentage of Segment Net Sales |
|
|
69 |
% |
|
|
|
|
|
66 |
% |
Aviation |
|
|
201,971 |
|
|
|
9 |
% |
|
|
185,472 |
|
Percentage of Segment Net Sales |
|
|
75 |
% |
|
|
|
|
|
74 |
% |
Marine |
|
|
208,964 |
|
|
|
27 |
% |
|
|
164,338 |
|
Percentage of Segment Net Sales |
|
|
61 |
% |
|
|
|
|
|
55 |
% |
Auto OEM |
|
|
38,045 |
|
|
|
35 |
% |
|
|
28,103 |
|
Percentage of Segment Net Sales |
|
|
22 |
% |
|
|
|
|
|
17 |
% |
Total |
|
$ |
1,262,022 |
|
|
|
18 |
% |
|
$ |
1,067,012 |
|
Percentage of Total Net Sales |
|
|
62 |
% |
|
|
|
|
|
59 |
% |
Gross profit dollars in the second quarter of 2026 increased 18% when compared to the year-ago quarter primarily due to the increase in net sales as described above. Consolidated gross margin as a percent of net sales increased 360 basis points when compared to the year-ago quarter with higher margins across all segments. The consolidated gross margin increase was primarily attributable to favorable product mix within certain segments and a favorable 100 basis point impact related to approximately $21 million in refunds of previously paid tariffs, of which approximately $14 million was attributable to marine.
The fitness and outdoor gross margin percentage increases of 330 basis points and 270 basis points, respectively, were primarily attributable to favorable product mix when compared to the year-ago quarter. The aviation gross margin percentage remained relatively flat with an 80 basis point increase when compared to the year-ago quarter. The marine gross margin percentage increase of 630 basis points when compared to the year-ago quarter was primarily attributable to refunds of previously paid tariffs and favorable product mix. The auto OEM gross margin percentage increase of 560 basis points when compared to the year-ago quarter was primarily attributable to year-to-date cost recoveries recognized as revenue during the current quarter.
Operating Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expense |
|
13-Weeks Ended
June 27, 2026 |
|
|
Year-over-Year Change |
|
|
13-Weeks Ended
June 28, 2025 |
|
Research and development expense |
|
|
303,940 |
|
|
|
10 |
% |
|
|
276,663 |
|
Percentage of Total Net Sales |
|
|
15 |
% |
|
|
|
|
|
15 |
% |
Selling, general and administrative expenses |
|
|
342,574 |
|
|
|
8 |
% |
|
|
318,054 |
|
Percentage of Total Net Sales |
|
|
17 |
% |
|
|
|
|
|
18 |
% |
Total |
|
$ |
646,514 |
|
|
|
9 |
% |
|
$ |
594,717 |
|
Percentage of Total Net Sales |
|
|
32 |
% |
|
|
|
|
|
33 |
% |
Total operating expense in the second quarter of 2026 increased 9% in absolute dollars and decreased 80 basis points as a percent of revenue when compared to the year-ago quarter. Operating expense, as a percent of segment net sales, decreased in the fitness, aviation, marine, and auto OEM segments by 70 basis points, 70 basis points, 190 basis points, and 170 basis points, respectively, when compared to the year-ago quarter primarily due to increased revenue and greater leverage of expenses. Operating expense, as a percent of segment net sales, increased in the outdoor segment by 100 basis points when compared to the year-ago quarter as decreased revenue and increased expenses were offset by improved gross margin percentage.
Research and development expense increased 10% in absolute dollars when compared to the year-ago quarter. The absolute dollar expense increase was primarily due to higher engineering personnel-related expenses.
Selling, general and administrative expenses increased 8% in absolute dollars when compared to the year-ago quarter. The absolute dollar expense increase was primarily due to higher personnel-related expenses.
Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) |
|
13-Weeks Ended
June 27, 2026 |
|
|
Year-over-Year Change |
|
|
13-Weeks Ended
June 28, 2025 |
|
Fitness |
|
$ |
277,039 |
|
|
|
40 |
% |
|
$ |
197,630 |
|
Percentage of Segment Net Sales |
|
|
37 |
% |
|
|
|
|
|
33 |
% |
Outdoor |
|
|
163,583 |
|
|
|
4 |
% |
|
|
157,881 |
|
Percentage of Segment Net Sales |
|
|
34 |
% |
|
|
|
|
|
32 |
% |
Aviation |
|
|
72,166 |
|
|
|
14 |
% |
|
|
63,383 |
|
Percentage of Segment Net Sales |
|
|
27 |
% |
|
|
|
|
|
25 |
% |
Marine |
|
|
99,848 |
|
|
|
59 |
% |
|
|
62,921 |
|
Percentage of Segment Net Sales |
|
|
29 |
% |
|
|
|
|
|
21 |
% |
Auto OEM |
|
|
2,872 |
|
|
NM |
|
|
|
(9,520 |
) |
Percentage of Segment Net Sales |
|
|
2 |
% |
|
|
|
|
|
(6 |
%) |
Total |
|
$ |
615,508 |
|
|
|
30 |
% |
|
$ |
472,295 |
|
Percentage of Total Net Sales |
|
|
30 |
% |
|
|
|
|
|
26 |
% |
NM - Represents that the percentage change is not meaningful.
Total operating income in the second quarter of 2026 increased 30% in absolute dollars and increased 440 basis points as a percent of revenue when compared to the year-ago quarter. The increase in operating income as a percent of revenue was driven by gross margin improvements and lower operating expenses as a percent of revenue, as described above. Operating performance improved across all segments when compared to the year-ago quarter.
Other Income (Expense)
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
13-Weeks Ended
June 27, 2026 |
|
|
13-Weeks Ended
June 28, 2025 |
|
Interest income |
|
$ |
38,173 |
|
|
$ |
31,724 |
|
Foreign currency losses |
|
|
(2,492 |
) |
|
|
(23,512 |
) |
Other (expense) income |
|
|
(128 |
) |
|
|
(256 |
) |
Total |
|
$ |
35,553 |
|
|
$ |
7,956 |
|
The average interest rate return on cash and investments during the second quarter of 2026 was 3.5%, compared to 3.2% during the same quarter of 2025.
Foreign currency gains and losses for the Company are driven by movements of a number of currencies in relation to the U.S. Dollar. The Taiwan Dollar is the functional currency of Garmin Corporation, the Euro is the functional currency of several subsidiaries, and the U.S. Dollar is the functional currency of Garmin (Europe) Ltd., although some transactions and balances are denominated in British Pounds. Other notable currency exposures include the Polish Zloty and Swiss Franc. The majority of the Company’s consolidated foreign currency gain or loss is typically driven by the significant cash, receivables and payables held in a currency other than the functional currency at a given legal entity.
The $2.5 million currency loss recognized in the second quarter of 2026 was primarily due to the U.S. Dollar strengthening against the Euro and weakening against the Taiwan Dollar, partially offset by the U.S. Dollar strengthening against the Swiss Franc, within the 13-week period ended June 27, 2026. During this period, the U.S. Dollar strengthened 1.1% against the Euro and weakened 0.6% against the Taiwan Dollar, resulting in losses of $3.8 million and $2.7 million, respectively, while the U.S. Dollar strengthened 1.8% against the Swiss Franc, resulting in a gain of $4.6 million. The remaining net currency loss of $0.6 million was related to the impacts of other currencies, each of which was individually immaterial.
The $23.5 million currency loss recognized in the second quarter of 2025 was primarily due to the U.S. Dollar weakening against the Taiwan Dollar, partially offset by the U.S Dollar weakening against the Euro and British Pound Sterling, within the 13-week period ended June 28, 2025. During this period, the U.S. Dollar weakened 14.1% against the Taiwan Dollar, resulting in a loss of $67.7 million, while the U.S Dollar weakened 8.2% against the Euro and 6.0% against the British Pound Sterling, resulting in gains of $36.5 million and $2.9 million, respectively. The remaining net currency gain of $4.8 million was related to the impacts of other currencies, each of which was individually immaterial.
Income Tax Provision
The Company recorded income tax expense of $109.1 million in the 13-week period ended June 27, 2026, compared to income tax expense of $79.4 million in the 13-week period ended June 28, 2025. The effective tax rate was 16.8% in the second quarter of 2026, compared to 16.5% in the second quarter of 2025. The increase in effective tax rate between comparative periods was primarily due to changes in income mix by jurisdiction.
Net Income
As a result of the above, net income for the 13-week period ended June 27, 2026 was $541.9 million compared to $400.8 million for the 13-week period ended June 28, 2025, an increase of $141.1 million.
Comparison of 26-Weeks Ended June 27, 2026 and June 28, 2025
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
26-Weeks Ended
June 27, 2026 |
|
|
Year-over-Year Change |
|
|
26-Weeks Ended
June 28, 2025 |
|
Fitness |
|
$ |
1,303,646 |
|
|
|
32 |
% |
|
$ |
990,147 |
|
Percentage of Total Net Sales |
|
|
35 |
% |
|
|
|
|
|
30 |
% |
Outdoor |
|
|
900,270 |
|
|
|
(3 |
%) |
|
|
928,853 |
|
Percentage of Total Net Sales |
|
|
24 |
% |
|
|
|
|
|
28 |
% |
Aviation |
|
|
532,590 |
|
|
|
13 |
% |
|
|
472,481 |
|
Percentage of Total Net Sales |
|
|
14 |
% |
|
|
|
|
|
14 |
% |
Marine |
|
|
696,385 |
|
|
|
13 |
% |
|
|
618,699 |
|
Percentage of Total Net Sales |
|
|
18 |
% |
|
|
|
|
|
18 |
% |
Auto OEM |
|
|
342,691 |
|
|
|
1 |
% |
|
|
339,483 |
|
Percentage of Total Net Sales |
|
|
9 |
% |
|
|
|
|
|
10 |
% |
Total |
|
$ |
3,775,582 |
|
|
|
13 |
% |
|
$ |
3,349,663 |
|
Net sales increased 13% for the 26-week period ended June 27, 2026 when compared to the year-ago period. Total unit sales in the first half of 2026 increased by approximately 9% to 10,451 when compared to total unit sales of 9,565 in the first half of 2025, which differs from the percent increase in revenue primarily due to shifts in segment and product mix. Fitness was the largest portion of our revenue mix in the first half of 2026 at 35% compared to 30% in the first half of 2025.
The increase in fitness revenue was driven by growth across all product categories, led by strong demand for advanced wearables. The increase in aviation revenue was driven by growth in OEM and aftermarket product categories. The increase in marine revenue was driven by growth across multiple product categories. The increase in auto OEM revenue was primarily driven by growth in domain controllers. The outdoor revenue decrease was primarily due to declines in adventure watches.
Gross Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
26-Weeks Ended
June 27, 2026 |
|
|
Year-over-Year Change |
|
|
26-Weeks Ended
June 28, 2025 |
|
Fitness |
|
$ |
819,246 |
|
|
|
40 |
% |
|
$ |
584,813 |
|
Percentage of Segment Net Sales |
|
|
63 |
% |
|
|
|
|
|
59 |
% |
Outdoor |
|
|
610,261 |
|
|
|
1 |
% |
|
|
606,964 |
|
Percentage of Segment Net Sales |
|
|
68 |
% |
|
|
|
|
|
65 |
% |
Aviation |
|
|
399,279 |
|
|
|
13 |
% |
|
|
353,374 |
|
Percentage of Segment Net Sales |
|
|
75 |
% |
|
|
|
|
|
75 |
% |
Marine |
|
|
406,340 |
|
|
|
17 |
% |
|
|
348,271 |
|
Percentage of Segment Net Sales |
|
|
58 |
% |
|
|
|
|
|
56 |
% |
Auto OEM |
|
|
69,184 |
|
|
|
19 |
% |
|
|
58,135 |
|
Percentage of Segment Net Sales |
|
|
20 |
% |
|
|
|
|
|
17 |
% |
Total |
|
$ |
2,304,310 |
|
|
|
18 |
% |
|
$ |
1,951,557 |
|
Percentage of Total Net Sales |
|
|
61 |
% |
|
|
|
|
|
58 |
% |
Gross profit dollars in the first half of 2026 increased 18% when compared to the year-ago period primarily due to the increase in net sales as described above. Consolidated gross margin as a percent of net sales increased 280 basis points when compared to the year-ago period with higher margins across all segments. The consolidated gross margin increase was primarily attributable to favorable product mix within certain segments.
The fitness and outdoor gross margin percentage increases of 380 basis points and 240 basis points, respectively, were primarily attributable to favorable product mix when compared to the year-ago period. The aviation gross margin percentage remained relatively flat with a 20 basis point increase when compared to the year-ago period. The marine gross margin percentage increase of 210 basis points when compared to the year-ago period was primarily attributable to refunds of previously paid tariffs. The auto OEM gross margin percentage increase of 310 basis points when compared to the year-ago period was primarily attributable to year-to-date cost recoveries recognized as revenue during the current period.
Operating Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expense |
|
26-Weeks Ended
June 27, 2026 |
|
|
Year-over-Year Change |
|
|
26-Weeks Ended
June 28, 2025 |
|
Research and development expense |
|
$ |
599,758 |
|
|
|
10 |
% |
|
$ |
544,783 |
|
Percentage of Total Net Sales |
|
|
16 |
% |
|
|
|
|
|
16 |
% |
Selling, general and administrative expenses |
|
|
657,379 |
|
|
|
9 |
% |
|
|
601,655 |
|
Percentage of Total Net Sales |
|
|
17 |
% |
|
|
|
|
|
18 |
% |
Total |
|
$ |
1,257,137 |
|
|
|
10 |
% |
|
$ |
1,146,438 |
|
Percentage of Total Net Sales |
|
|
33 |
% |
|
|
|
|
|
34 |
% |
Total operating expense in the first half of 2026 increased 10% in absolute dollars and decreased 90 basis points as a percent of revenue when compared to the year-ago period. Operating expense, as a percent of segment net sales, decreased in the fitness, aviation, marine, and auto OEM segments when compared to the year-ago period by 180 basis points, 300 basis points, 110 basis points, and 130 basis points, respectively, due to increased revenue and greater leverage of expenses. Operating expense, as a percent of segment net sales, increased in the outdoor segment by 190 basis points when compared to the year-ago period as decreased revenue and increased expenses were offset by improved gross margin percentage.
Research and development expense increased 10% in absolute dollars when compared to the year-ago period. The absolute dollar expense increase was primarily due to higher engineering personnel-related expenses.
Selling, general and administrative expense increased 9% in absolute dollars when compared to the year-ago period. The absolute dollar expense increase was primarily due to higher personnel-related expenses.
Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) |
|
26-Weeks Ended
June 27, 2026 |
|
|
Year-over-Year Change |
|
|
26-Weeks Ended
June 28, 2025 |
|
Fitness |
|
$ |
434,659 |
|
|
|
58 |
% |
|
$ |
275,344 |
|
Percentage of Segment Net Sales |
|
|
33 |
% |
|
|
|
|
|
28 |
% |
Outdoor |
|
|
282,373 |
|
|
|
(1 |
%) |
|
|
286,668 |
|
Percentage of Segment Net Sales |
|
|
31 |
% |
|
|
|
|
|
31 |
% |
Aviation |
|
|
143,100 |
|
|
|
28 |
% |
|
|
111,739 |
|
Percentage of Segment Net Sales |
|
|
27 |
% |
|
|
|
|
|
24 |
% |
Marine |
|
|
190,606 |
|
|
|
27 |
% |
|
|
149,785 |
|
Percentage of Segment Net Sales |
|
|
27 |
% |
|
|
|
|
|
24 |
% |
Auto OEM |
|
|
(3,565 |
) |
|
NM |
|
|
|
(18,417 |
) |
Percentage of Segment Net Sales |
|
|
(1 |
%) |
|
|
|
|
|
(5 |
%) |
Total |
|
$ |
1,047,173 |
|
|
|
30 |
% |
|
$ |
805,119 |
|
Percentage of Total Net Sales |
|
|
28 |
% |
|
|
|
|
|
24 |
% |
NM - Represents that the percentage change is not meaningful.
Total operating income in the first half of 2026 increased 30% in absolute dollars and increased 370 basis points as a percent of revenue when compared to the year-ago period. The increase in operating income as a percent of revenue was driven by gross margin improvements and lower operating expenses as a percent of revenue, as described above. Operating performance improvements, when compared to the year-ago period, in fitness, aviation, marine, and auto OEM were partially offset by a decline in outdoor.
Other Income (Expense)
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
26-Weeks Ended
June 27, 2026 |
|
|
26-Weeks Ended
June 28, 2025 |
|
Interest income |
|
$ |
74,147 |
|
|
$ |
62,231 |
|
Foreign currency gains |
|
|
630 |
|
|
|
1,248 |
|
Other income |
|
|
1,640 |
|
|
|
730 |
|
Total |
|
$ |
76,417 |
|
|
$ |
64,209 |
|
The average interest returns on cash and investments during the 26-week periods ended June 27, 2026 and June 28, 2025 were 3.4% and 3.2%, respectively.
Foreign currency gains and losses for the Company are driven by movements of a number of currencies in relation to the U.S. Dollar. The Taiwan Dollar is the functional currency of Garmin Corporation, the Euro is the functional currency of several subsidiaries, and the U.S. Dollar is the functional currency of Garmin (Europe) Ltd., although some transactions and balances are denominated in British Pounds. Other notable currency exposures include the Polish Zloty and Swiss Franc. The majority of the Company’s consolidated foreign currency gain or loss is typically driven by the significant cash, receivables and payables held in a currency other than the functional currency at a given legal entity.
The $0.6 million currency gain recognized in the 26-week period ended June 27, 2026 was primarily due to the U.S. Dollar strengthening against the Taiwan Dollar and Swiss Franc, partially offset by the U.S. Dollar strengthening against the Euro, within the 26-week period ended June 27, 2026. During this period, the U.S. Dollar strengthened 1.5% against the Taiwan Dollar and 2.8% against the Swiss Franc, resulting in gains of $8.5 million and $8.1 million, respectively, while the U.S. Dollar strengthened 3.3% against the Euro, resulting in a loss of $14.6 million. The remaining net currency loss of $1.4 million was related to the impacts of other currencies, each of which was individually immaterial.
The $1.2 million currency gain recognized in the 26-week period ended June 28, 2025 was primarily due to the U.S. Dollar weakening against the Euro, British Pound Sterling, and Polish Zloty, offset by the U.S. Dollar weakening against the Taiwan Dollar, within the 26-week period ended June 28, 2025. During this period, the U.S. Dollar weakened 12.4% against the Euro, 9.0% against the British Pound Sterling, and 12.8% against the Polish Zloty, resulting in gains of $49.1 million, $4.4 million, and $3.6 million, respectively, while the U.S. Dollar weakened 12.8% against the Taiwan Dollar, resulting in a loss of $61.6 million. The remaining net currency gain of $5.7 million was related to the impacts of other currencies, each of which was individually immaterial.
Income Tax Provision
The Company recorded income tax expense of $176.6 million in the first half of 2026, compared to income tax expense of $135.7 million in the first half of 2025. The effective tax rate was 15.7% in the first half of 2026, compared to 15.6% in the first half of 2025. The increase in effective tax rate between comparative periods was primarily due to changes in income mix by jurisdiction.
Net Income
As a result of the above, net income for the 26-week period ended June 27, 2026 was $947.0 million compared to $733.6 million for the 26-week period ended June 28, 2025, an increase of $213.4 million.
Liquidity and Capital Resources
We primarily use, and expect to use, cash flow from operations to fund our capital expenditures, support our working capital requirements, pay dividends, fund share repurchases, and fund strategic acquisitions. We believe that our existing cash balances and cash flow from operations will be sufficient to meet our short- and long-term projected working capital needs, capital expenditures, and other cash requirements.
Cash, Cash Equivalents, and Marketable Securities
As of June 27, 2026, we had approximately $4.4 billion of cash, cash equivalents and marketable securities. Management invests idle or surplus cash in accordance with the Company's investment policy, which has been approved by the Company’s Board of Directors. The investment policy’s primary objectives are to preserve capital, maintain an acceptable degree of liquidity, and maximize yield within the constraint of low credit risk. Garmin’s average interest rate returns on cash and investments during the first two quarters of 2026 and 2025 were 3.4% and 3.2%, respectively. The fair value of our securities varies from period to period due to changes in interest rates, in the performance of the underlying collateral, and in the credit performance of the underlying issuer, among other factors. See Note 4 – Marketable Securities in the Notes to Condensed Consolidated Financial Statements for additional information regarding marketable securities.
Cash Flows
Cash provided by operating activities totaled $939.5 million for the first half of 2026, compared to $594.0 million for the first half of 2025. The increase in cash received from customers, primarily driven by higher net sales, was partially offset by increases in cash paid for cost of goods sold and operating expenses in the first half of 2026 compared to the first half of 2025.
Cash used in investing activities totaled $396.7 million for the first half of 2026, compared to $246.1 million for the first half of 2025. This increase was primarily due to an increase in net purchases of marketable securities and an increase in purchases of property and equipment in the first half of 2026 compared to the first half of 2025.
Cash used in financing activities totaled $473.2 million for the first half of 2026, compared to $415.7 million for the first half of 2025. This increase was primarily due to higher cash dividend payments in the first half of 2026 compared to the first half of 2025.
Use of Cash
Operating Leases
The Company has lease arrangements for certain real estate properties, vehicles, and equipment. Leased properties are typically used for office space, distribution, data centers, and retail. As of June 27, 2026, the Company had fixed lease payment obligations of $258.8 million, with $48.9 million payable within 12 months.
Inventory Purchase Obligations
The Company obtains various raw materials and components for its products from a variety of third party suppliers. The Company’s inventory purchase obligations are primarily noncancelable commitments. As of June 27, 2026, the Company had inventory purchase obligations of $1,533.7 million, with $1,170.1 million payable within 12 months.
Other Purchase Obligations
The Company’s other purchase obligations primarily consist of noncancelable commitments for capital expenditures and other indirect purchases in connection with conducting our business. As of June 27, 2026, the Company had other purchase obligations of $540.4 million, with $277.9 million payable within 12 months.
Critical Accounting Policies and Estimates
General
Our discussion and analysis of financial condition and results of operations are based upon the Company’s condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The presentation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to customer sales programs and incentives, product returns, bad debts, inventories, investments, intangible assets, income taxes, warranty obligations, and contingencies and litigation. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
For a description of the significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements, refer to Note 1 – Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements in Part II, Item 8 and “Critical Accounting Policies and Estimates” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2025. There were no significant changes to the Company’s critical accounting policies and estimates in the 13-week and 26-week periods ended June 27, 2026.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There are numerous market risks that can affect our future business, financial condition and results of operations. In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended December 27, 2025. There have been no material changes during the 13-week and 26-week periods ended June 27, 2026 in the risks described in our Annual Report on Form 10-K related to market sensitivity, inflation, foreign currency exchange rate risk and interest rate risk.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures. The Company maintains a system of disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be timely disclosed, is accumulated and communicated to management in a timely fashion. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. As of June 27, 2026, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded as of June 27, 2026 that our disclosure controls and procedures were effective such that the information relating to the Company, required to be disclosed in our Securities and Exchange Commission (SEC) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company’s management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
(b) Changes in internal control over financial reporting. There has been no change in the Company’s internal controls over financial reporting that occurred during the Company’s fiscal quarter ended June 27, 2026 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.