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Tech Data results lifted by currency

Distributor Tech Data’s first quarter results show the effect of the acquisition of Avnet TS. Europe still accounts for 55% of worldwide net sales and growth in the region was higher than in the Americas, at 26% compared to 15%. Both were dwarfed by the rise in AsiaPac – at 48%, though the region has only 3% of total sales.

Overall, net sales were $8.5bn, an increase of 22% compared to the prior-year quarter. The increase in net sales year-over-year is primarily attributed to changes in foreign currency exchange rates and an additional month of Avnet TS sales. On a constant currency basis, net sales increased 13%. 

Margins are being squeezed in Europe: operating income was $17.3m, or 0.37 percent of net sales, compared to $24.8m, or 0.67 percent of net sales in the prior-year quarter.

“During Q1, our teams capitalized on upside demand, prudently controlled costs and effectively managed through vendor program changes. The result was topline growth and operating results that exceeded our expectations. Our performance is a testament to the flexibility of our business model, our strong relationships with channel partners, and to our teams’ ability to execute and deliver a solid performance,” said Robert M. Dutkowsky, chairman and chief executive officer. “Our end-to-end solutions model has set the standard for IT distribution and we are prepared and excited to enter our next chapter as the IT Distributor of the Future. Tech Data’s success story is built on our ability over the years to evolve and transform with the IT market. By following this path, we ensure that we strengthen our role as the vital link in the IT ecosystem for our channel partners and, in turn, create value for our shareholders.”