Key Highlights

• Record quarterly sales of $10.7 billion, an 82% increase year over year and 29% sequentially

• Diluted EPS of $3.28 compared to $0.61 in the prior-year quarter; adjusted diluted EPS of $3.63

• Electronic Components achieved Operating Margin of 4.8% on record Operating Income of $484 million

• Q2 fiscal 2027 guidance calls for sales of $11.1 billion to $11.4 billion and adjusted diluted EPS of $3.90 to $4.10

Avnet, Inc.(NASDAQ:AVT), a global technology distributor, reported financial results for its first fiscal quarter of 2027 ended October 3, 2026, delivering record quarterly sales of $10.7 billion. This represents an 82% increase year over year and a 29% rise sequentially. Adjusting for an extra week of sales in the quarter, year-over-year growth was 71% and sequential growth was 21%. Diluted Earnings per Share came in at $3.28, compared to $0.61 in the prior-year quarter. On an adjusted basis, diluted EPS reached a record $3.63, a 332% increase year over year.

Segment Performance

Both of Avnet's operating segments delivered notable results. The Electronic Components (EC) segment generated sales of $10.1 billion, up 84.3% year over year and 30.0% sequentially. EC operating income margin expanded 189 basis points year over year to 4.8%, reflecting disciplined cost management alongside Revenue growth. Farnell, the company's higher-margin distribution business, posted sales of $583.3 million, a 46.2% increase year over year and 16.6% sequentially. Farnell operating income margin reached 10.1%, an improvement of 576 basis points year over year and 109 basis points sequentially.

Geographic Mix and Demand Drivers

Sales growth was broad-based across all geographies. The Americas led with a 109% year-over-year increase to $2.9 billion, while Asia posted a 79% rise to $5.1 billion. EMEA grew 64% to $2.7 billion. The company attributed the demand environment to continued growth across core verticals including industrial, aerospace and defense, transportation, and AI and Data Center applications.

Profitability and Capital Allocation

Operating income for the quarter was $474.7 million, compared to $142.0 million a year ago, with operating income margin expanding 202 basis points to 4.4%. On an adjusted basis, operating income was $498.1 million with a margin of 4.7%, up 210 basis points. Adjusted operating income grew approximately three times faster than sales year over year. Return on Working Capital improved to 25%, compared to 19% last quarter and 10% a year ago. Inventory days held relatively stable at 72, while net working capital days declined 5 days sequentially to 64. The company returned $30 million to shareholders in dividends during the quarter.

Second Quarter Outlook

For the second quarter of fiscal 2027, ending January 2, 2027, Avnet provided guidance for sales of $11.1 billion to $11.4 billion, with a midpoint of $11.25 billion. The midpoint implies sequential sales growth of approximately 5%, or 12% when adjusting for the extra week in the first quarter. Adjusted diluted EPS is guided at $3.90 to $4.10, with a midpoint of $4.00. The guidance assumes similar Supply of electronic components from suppliers compared to Q1, similar interest expense, and an adjusted effective tax rate of 21% to 25%.

Looking Ahead

Avnet's fiscal first quarter of 2027 underscores the scale of the current demand cycle in electronic components distribution, particularly in AI and data center-related applications. The 82% year-over-year revenue increase and the acceleration in operating margins suggest the company is benefiting from both Volume and pricing dynamics. With Q2 guidance pointing to continued sequential growth and further EPS expansion, the near-term trajectory remains upward. CEO Phil Gallagher described the fundamental backdrop for the industry as positive, citing sustained demand across core verticals and the company's focus on expense and working capital management.