Why This Matters to Distributors: Avnet reported growth across its businesses and geographic markets, with demand coming from industrial customers as well as artificial intelligence and data center applications. Its results also show how rapid growth can increase the cash needed to finance inventory and customer purchases.
Avnet’s sales increased 81.7% in its fiscal first quarter as demand strengthened across its electronic components and Farnell businesses. The technology distributor reported higher profits and forecasted further sales growth in the current quarter.
Sales reached $10.72 billion, up from $5.90 billion a year earlier. Net income increased 445.3% to $282.2 million from $51.7 million.
The quarter ended Oct. 3 and included 14 weeks, compared with 13 weeks a year earlier. Excluding the extra week, sales increased 71%, the company said.
“We began fiscal 2027 by delivering another record quarter, reflecting stronger demand and solid execution across all of our businesses,” CEO Phil Gallagher.
Gallagher cited demand from several customer markets, including manufacturers and companies building artificial intelligence infrastructure.
“The fundamental backdrop for our industry remains positive, with continued growth across our core verticals such as industrial, aerospace and defense, transportation and AI and data center applications,” he said.
Avnet’s Electronic Components business generated sales of $10.13 billion, up 84.3% from $5.50 billion a year earlier. Operating income reached $484.5 million, compared with $159 million.
Farnell sales increased 46.2% to a record $583.3 million from $398.9 million.
Growth extended across all three geographic regions. Americas sales increased 108.9% to $2.86 billion, while sales in Europe, the Middle East and Africa rose 64.3% to $2.74 billion. Asia remained Avnet’s largest region, with sales increasing 78.8% to $5.12 billion.
Companywide operating income increased 234.3% to $474.7 million from $142 million.
The expansion also required more cash. Operating activities used $842.4 million during the quarter, compared with $144.6 million a year earlier, as the company financed inventory and amounts owed by customers.
Avnet forecast second quarter sales of $11.1 billion to $11.4 billion. The middle of that range would represent approximately 5% growth from the first quarter.
The forecast assumes suppliers will provide a similar supply of electronic components as in the first quarter.
Do not miss any content from Distribution Strategy Group. Join our list.
Share this article:
