Avnet Q3 Sales Climb 32%; Farnell Up 18%

Avnet Q3 sales grew 32% to $6.5 billion from $4.9 billion year on year. Sequentially sales rose 10.6%.

Farnell sales increased 18.4% to $469 million year on year and were up 6.4% on the previous quarter.

In the EMEA region sales advanced 38% to $2.2 billion, an 18.7% increase sequentially.

North America sales climbed 40% on last year to $1.62 billion. Asia-Pacific sales  of $2.67 billion were up 23.3% on 2021.

Commented Phil Gallagher  (pictured), Avnet CEO, “We are pleased to report another strong quarter of sales and operating margin growth. Farnell achieved record operating margin as our continued investments in inventory breadth and e-commerce capabilities continue to pay off. Supported by increased sales, the Americas expanded operating margins for the fifth consecutive quarter. Growing demand for supply chain orchestration is driving strong financial performance across our global business. Looking ahead to the fourth quarter, amid the backdrop of geopolitical uncertainty, we continue to anticipate a favourable demand environment and expect to sustain strong margins from our recently implemented operating improvements.”

In a call with financial analysts he added, “We are competing favourably across the board and are pleased to see continued improvement in our Americas business, where strong demand and expanded supply chain orchestration opportunities helped us grow revenue by over 40% year-over-year and achieved our fifth consecutive quarter of operating margin growth.

We are also especially pleased with strong results from Farnell, which has proven to be an important needle mover for total Avnet and is now responsible for 7% of our sales and 23% of our adjusted operating income.”

“Robust demand was again widespread across our end markets,” Gallagher continued. “We continue to see strength in the Automotive, Transportation and Industrial segments. And we expect the Aerospace and Defence segments to remain elevated over the coming quarters. Overall, we continue to forecast favourable demand conditions to hold throughout the second half of this calendar year.”

Gallagher also noted expanded opportunities in the Americas and EMEA to engage directly with Tier 1 automotive and transportation companies.

“Very exciting,” he remarked. “This broad engagement speaks to the value add it brings with our deep expertise in supply chain orchestration and is exemplary of the new contracts we are winning across our business.

“Our book-to-bill ratio at the end of the quarter remained strong. Lead times remain consistently extended at this point in time,” Gallagher added. “We continue to tightly manage our backlog and are satisfied with our inventory levels as we support strong demand across our operating regions.”

Turning to Farnell, Gallagher observed, “Sales were up over 18% year-over-year, a reflection of the impact of our investments in Farnell inventory and its e-commerce capabilities. We added over 19,400 SKUs in the quarter, which gets us well on our way toward our plans to add 250,000 SKUs through 2022. Our sustained investment in Farnell’s e-commerce platform and improving the user experience has yielded meaningful results. 56% of our total sales and 72% of the total transactions were placed through Farnell’s e-commerce platform this quarter, and we expect that to continue to see increased traffic and new customer acquisitions in quarters to come.”

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