Avnet — First Quarter 2027 Earnings Summary

Financial Performance:

• Record quarterly sales of $10.7 billion, an 82% increase year-over-year and 29% sequentially; excluding the extra week of sales, growth was 71% year-over-year and 21% sequentially.
• Diluted earnings per share (EPS) of $3.28, up 437.7% from $0.61 in the prior-year quarter.
• Record adjusted diluted EPS of $3.63, a 332% increase year-over-year.
• Operating income margin of 4.4%, expanding 202 basis points year-over-year; adjusted operating income margin of 4.7%, expanding 210 basis points year-over-year.
• Adjusted operating income grew approximately three times faster than sales year-over-year.
• Return on working capital improved to 25% from 19% in the prior quarter and 10% a year ago.
• Inventory days remained relatively flat at 72 days quarter-over-quarter.
• Net working capital days declined 5 days to 64 days quarter-over-quarter.
• GAAP operating income was $474.7 million compared to $142.0 million in the prior year.
• Net income was $282.2 million compared to $51.7 million in the prior year.

Guidance and Future Outlook:

• Provided guidance for the second quarter of fiscal 2027 (ending January 2, 2027) with sales of $11.1 billion to $11.4 billion (midpoint $11.25 billion).
• Provided adjusted diluted EPS guidance of $3.90 to $4.10 (midpoint $4.00).
• The second quarter guidance implies approximately 5% sequential sales growth at the midpoint, or 12% when adjusting for the extra week of sales in Q1.
• Guidance assumes similar supply of electronic components from suppliers as the first quarter.
• Guidance excludes restructuring, integration, other expenses, foreign currency gains/losses, and certain income tax adjustments.
• Assumes similar interest expense to Q1 and an adjusted effective tax rate between 21% and 25%.
• Assumes 87 million average diluted shares outstanding.
• Assumes currency exchange rates of $1.12 for Euro to U.S. Dollar and $1.33 for GBP to U.S. Dollar.

Business Segments and Product Lines:

• Electronic Components (EC) achieved record operating income of $484 million with an operating margin of 4.8%, up 189 basis points year-over-year; sales were $10.1 billion, up 84.3% year-over-year.
• Farnell achieved record sales of $583 million, up 46.2% year-over-year, with an operating margin of 10.1%, up 576 basis points year-over-year.
• Sales growth was sequential and year-over-year across all EC regions and Farnell.
• Americas sales were $2.86 billion, up 108.9% year-over-year.
• EMEA sales were $2.74 billion, up 64.3% year-over-year.
• Asia sales were $5.12 billion, up 78.8% year-over-year.
• Core verticals driving demand include industrial, aerospace and defense, transportation, and AI and data center applications.

Market and Competitive Landscape:

• Management stated the fundamental backdrop for the industry remains positive with continued growth in core verticals.
• The company noted strong demand and solid execution across all businesses.
• No specific market share data or competitor names were provided in the release.

Risks and Challenges:

• Forward-looking statements are subject to risks including geopolitical events, military conflicts, pandemics, and competitive pressures.
• Risks include industry down-cycles in semiconductors, supplier relationships, and product allocations.
• International operations face risks related to foreign currency fluctuations, inflation, tariffs, sanctions, and trade restrictions.
• Supply chain risks include disruptions from military conflicts, natural disasters, and warehouse modernization efforts.
• Cybersecurity attacks, privacy incidents, and information systems failures pose potential risks.
• Risks also include employee retention constraints and legislative or regulatory changes.

Management Commentary and Tone:

• CEO Phil Gallagher described the quarter as "another record quarter" reflecting "stronger demand and solid execution."
• Management expressed confidence in a "robust" outlook and a focus on "executing our strategy, driving profitable growth and creating long-term value."
• The tone was positive, citing momentum across the business and diligent management of expenses and working capital.

Other Key Points:

• The first quarter of fiscal 2027 contained 14 weeks, compared to 13 weeks in the first quarter of fiscal 2026.
• Avnet returned $30 million to shareholders in dividends during the quarter.
• Cash and cash equivalents increased to $236.8 million from $155.4 million at the beginning of the period.
• Total assets increased to $18.5 billion from $15.4 billion at the beginning of the period.
• Short-term debt increased to $861.5 million from $734.0 million; long-term debt increased to $3.3 billion from $2.5 billion.
• The company hosted a conference call and webcast on November 4, 2026, to discuss results.
• Non-GAAP financial measures, including adjusted operating income and adjusted diluted EPS, are provided to exclude restructuring, integration, and amortization expenses.