“We started out 2016 strong with total revenue growth of 7% led by robust double digit growth in our marine and outdoor segments, and high single digit growth in our fitness and aviation segments,” said Cliff Pemble, president and chief executive officer (CEO) of Garmin Ltd. “With the majority of the year still ahead of us, we recognize that there are many challenges and uncertainties yet to be encountered. We will continue to focus on innovation and execution to deliver compelling products to the markets we serve.”
The fitness segment posted revenue growth of 9% in the quarter reflecting strong growth of our Garmin Elevate™ wrist heart rate technology products within our activity tracker and running categories, offset by lower multisport revenues. On a year-over-year basis, gross margin and operating margin declined to 51% and 12%, respectively. The gross margin decline was driven by product mix within the quarter. The operating margin decline reflects the continued investment in advertising and research and development to support our long-term goals in the segment. Our recently launched vívoactive HR and vívofit 3 are shipping and we feel we are well positioned with our 2016 product roadmap.
The outdoor segment posted robust revenue growth of 33% driven by the strength of our fēnix® line of wearables as well as our dog products. Our recently introduced Approach® S20 and G10, and TruSwing™ have brought new energy to our golf product line in a challenging industry. Gross and operating margins were down from a year ago, but remained strong at 61% and 29%, respectively, and resulted in a 17% increase in operating income. Within the quarter, we completed the DeLorme acquisition and will see a full quarter of sales contribution beginning in the second quarter. With the strong start to 2016 we are poised to execute our plan of continued innovations within the outdoor markets.
The marine segment posted robust revenue growth of 29% on the strength of our chartplotter and fish finder product lines. Gross margins declined year-over-year to 53% while operating margin increased to 12% as we leveraged our operating investments resulting in strong operating income growth of 125%. Our recently launched GPSMap® 8400/8600 are the largest plotters we have produced at 17-, 22-, and 24-inch displays and have a resolution of 1920 x 1280, which is the highest screen resolution available on the market. We remain focused on innovation and product portfolio expansion throughout 2016.
The aviation segment posted revenue growth of 8% in the quarter with both OEM and aftermarket contributing to revenue improvement. Both the gross margin and operating margin were strong at 74% and 29%, respectively, and improved compared to the year ago quarter resulting in a 16% increase in operating income. During the quarter we were chosen to provide the avionics to two lifesaving organizations, with the AirEvac’s fleet of Bell helicopters and the U.S. Forest Service’s fleet of Sherpa aircraft. In addition, we introduced two new products for the experimental aviation market bringing quality audio and additional backup displays to the cockpit. We will continue to invest in new products and aircraft certifications for both OEM and aftermarket customers.
The auto segment posted a revenue decline of 11% primarily due to the ongoing PND market contraction and headwinds caused by additional revenue deferrals. Gross and operating margins were 44% and 9%, respectively. We began shipping the Garmin Drive line of PND devices with good initial customer response. Within OEM, we experienced strong growth of our infotainment business within the APAC and Middle East regions, and we delivered production release software for the new 2017 Mercedes E-class.
Additional Financial Information:
Total operating expenses in the quarter were $236 million, a 2% increase from the prior year. Research and development investment increased 2%, with growth primarily focused on aviation and active lifestyle products in fitness and outdoor. Advertising increased 16%, driven primarily by a year-over-year increase in fitness advertising to support wearables. Selling, general and administrative expense decreased by 3%, driven primarily by a decrease in year-over-year litigation related costs.
The effective tax rate in the first quarter of 2016 was 18.1% compared to an effective tax rate of 12.3% in the prior year. The increase in the effective tax rate is primarily due to projected income mix by jurisdiction compared to the prior year.
We continued to return cash to shareholders with our quarterly dividend of approximately $97 million and our share repurchase activity, which totaled approximately $20 million in the first quarter. We have $149 million remaining in the share repurchase program authorized through December 31, 2016, and expect to repurchase as business and market conditions warrant. We ended the quarter with cash and marketable securities of about $2.3 billion.
As announced in February, the Board will recommend to the shareholders
for approval at the annual meeting to be held on June 10, 2016 a cash
dividend in the total amount of $2.04 per share (subject to possible
adjustment based on the total amount of the dividend in Swiss Francs)
payable in quarterly installments.