AVT earnings analysis
What we found in AVT's 10-K: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Avnet delivered a strong fiscal 2026 recovery, with sales up 24.5% to $27.63 billion, diluted EPS up to $4.01 from $2.75, and operating margin improving to 2.6%. Growth was broad-based but led by Asia and Electronic Components, while Farnell provided the largest profitability inflection. The main offsets are negative operating cash flow of $280.9 million, higher debt of $3.21 billion, a 31-basis-point gross-margin decline to 10.4%, and execution risk from the German distribution-center closure. Management expects approximately 10% sequential sales growth in fiscal Q1 2027, supporting a bullish trajectory despite liquidity and margin risks.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Broad-Based Revenue Recovery
- Fiscal 2026 sales increased 24.5% to $27.63 billion from $22.20 billion, with reported growth across every region and both operating groups. This represents a strong recovery from fiscal 2025 sales of $22.20 billion, though sales remained below fiscal 2024's $23.76 billion only in the prior-year comparison context.
- Earnings and Operating Leverage Improved
- Diluted EPS rose to $4.01 from $2.75, while operating income increased 40.9% to $724.8 million and operating margin improved to 2.6% from 2.3%. Adjusted operating income margin also improved to 3.1% from 2.8%, indicating operating leverage on higher volumes.
- Farnell Drives Margin Inflection
- Electronic Components generated $25.852 billion of sales, up 24.6%, and operating income of $898.5 million, up 26.9%. Farnell was the sharper profit inflection: sales grew 23.2% to $1.781 billion, while operating income increased 221.7% to $105.7 million and operating margin expanded to 5.9% from 2.3%.
- Asia Led Geographic Growth
- Asia was the primary geographic growth engine, with sales up 28.0% to $13.427 billion and representing 48.5% of company sales. Taiwan sales increased to $6.713 billion from $4.676 billion, while China including Hong Kong increased to $3.796 billion from $3.521 billion.
- Broad Distribution and Service Platform
- Avnet describes EC as serving high- and medium-volume customers with components from leading manufacturers, plus design, supply-chain, programming, logistics, and customized services. Farnell focuses on lower-volume customers through e-commerce and distributes kits, tools, components, automation, and test-and-measurement products.
- Lower Capex; Continued Shareholder Returns
- Capital expenditures declined to $73.6 million from $147.5 million, while the company repurchased $138.3 million of stock and paid $114.4 million in dividends, or $1.40 per share. The board authorization had $225.8 million remaining at fiscal year-end.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Growth Consumes Significant Cash
- Working-capital intensity materially weakened cash generation: operating cash flow was negative $280.9 million versus positive $724.5 million in fiscal 2025. Cash used for working capital and other was $802.4 million, driven primarily by higher inventory purchases, timing of inventory payments, and higher receivables.
- Higher Debt and Variable-Rate Exposure
- Leverage and refinancing exposure increased. Total debt carrying value was $3.21 billion at June 27, 2026 versus $2.66 billion a year earlier, including $1.462 billion of floating-rate debt; the company also subsequently borrowed $375 million under a variable-rate term loan on August 12, 2026.
- Uncertain Tariff and Trade Environment
- The trade-policy risk profile became more uncertain after the February 2026 Supreme Court ruling invalidated certain tariffs, while the global tariff landscape continued to shift. Customer billings related to tariffs were less than 1% of fiscal 2026 sales, but management stated that future trade-policy escalations could materially affect sales and results and that no potential tariff refunds were recorded because the impact could not be reasonably estimated.
- Distribution-Center Restructuring Risk
- Fiscal 2026 included $134.7 million of restructuring, integration, and other expenses, including $87.7 million of severance and restructuring costs. The planned closure of a German distribution center affects approximately 350 employees and is expected to be completed in the third quarter of fiscal 2027, creating execution and transition risk.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $4.01
- Gross margin
- 10.4%
- Operating margin
- 2.6%
- Segment
- Electronic Components: $25.852 billion, 93.6% of sales, up 24.6% year over year
- Segment
- Farnell: $1.781 billion, 6.4% of sales, up 23.2% year over year
- Segment
- Americas: $6.481 billion, up 22.3%
- Segment
- EMEA: $7.725 billion, up 20.5%
- Segment
- Asia: $13.427 billion, up 28.0%
What they said about what is next.
The 10-K does not provide an EPS outlook or a formal revenue range. Management expects fiscal Q1 2027 sales to grow approximately 10% versus fiscal Q4 2026 sales of $8.295 billion, implying approximately $9.12 billion, with growth expected across all Electronic Components regions and Farnell.
The filing reads better than the one before it.
What came before.
- 10-Q · April 30, 2026
- Avnet's Q3 2026 results show substantial growth with revenue at $7.12 billion, a 34% increase from Q3 2025, and EPS of $1.14, surpassing expectations. Despite positive sales growth across all segments and geographies,…
- 10-Q · January 31, 2025
- Avnet reported second quarter sales of $5,663,384,000 and diluted EPS of $0.99. Revenue and margins declined year-over-year (sales down vs $6,204,914,000; gross profit down to $596,052,000 and operating income down to…
- 10-K · August 14, 2024
- Avnet presents a two-pronged distribution strategy through its Electronic Components (EC) and Farnell operating groups and a global footprint serving customers in more than 140 countries. The company reported FY2024…
- 10-Q · November 3, 2023
- Avnet's Q1 FY2024 results showed a decline in revenue and margins compared to the previous year, but net income rose significantly due to a legal settlement gain. The company reported revenue of $6.34 billion, down from…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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