--- title: "Avnet Earnings Call Signals Broad-Based Recovery" type: "News" locale: "en" url: "https://longbridge.com/en/news/296056413.md" description: "Avnet reported record Q4 sales of $8.3 billion and adjusted EPS of $2.28, signaling a broad-based recovery driven by strong demand across regions and segments. Management highlighted expanding operating margins, improved working capital efficiency, and Farnell's profitability gains. Despite risks from memory-driven pricing and tighter supply chains, the company remains optimistic, guiding for continued growth in Q1 fiscal 2027 with sales expected between $9.0–$9.3 billion." datetime: "2026-08-17T00:25:27.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/296056413.md) - [en](https://longbridge.com/en/news/296056413.md) - [zh-HK](https://longbridge.com/zh-HK/news/296056413.md) generator: "portal-rs" --- # Avnet Earnings Call Signals Broad-Based Recovery Avnet ((AVT)) has held its Q4 earnings call. Read on for the main highlights of the call. ### Summer Sale - Claim 70% Off TipRanks - Unlock powerful investing tools with TipRanks Premium to make smarter, more confident investment decisions - Subscribe to TipRanks Smart Investor Newsletter, and discover new investing opportunities with data-backed stock picks Avnet’s latest earnings call painted a picture of a broad-based recovery, with management emphasizing record sales, record earnings per share, and expanding margins. While they acknowledged risks from memory-driven pricing, higher inventory dollars, and a tightening supply backdrop, executives argued these issues reflect real demand and remain manageable, keeping the overall tone clearly optimistic. ## Record Sales Underscore Demand Rebound Avnet reported fourth-quarter sales of $8.3 billion, the highest in its history and up 48% from a year earlier. Revenue also climbed 17% sequentially, signaling not just a one-off spike but a strong ongoing recovery across the company’s end markets. ## Earnings Power Surges Past Revenue Growth Adjusted diluted EPS hit a quarterly record of $2.28, while adjusted operating income reached $318 million, both rising much faster than sales. EPS grew roughly 3.8 times the pace of revenue versus last year, and operating income about 2.6 times, highlighting powerful operating leverage. ## Margins Expand As Operating Discipline Pays Off Avnet’s adjusted operating margin widened to 3.8%, up about 70 basis points from the prior quarter, as profitability improved across the portfolio. Electronic Components hit roughly 4.0–4.1% operating margin, and Farnell reached 9%, while SG&A dropped to 63% of gross profit from 76% a year ago. ## Broad-Based Strength Across Regions And Segments Sales growth was strong in every major geography, with the Americas up 55%, Asia up 46%, and EMEA up 44% year over year. By business line, Electronic Components grew 49% year over year and 17% sequentially, while Farnell posted 29% annual and 10% sequential growth, with all EC regions growing double digits. ## Working Capital Efficiency And Inventory Quality Improve Inventory days dropped to 71, the lowest level in nearly four years, with Electronic Components inventory days below 65 and overall working capital days falling to 69. Return on working capital climbed to 19%, topping the company’s 16% near-term target and underscoring better capital efficiency. ## Farnell’s Turnaround Gains Visible Traction Farnell posted its strongest profitability in years, with gross margin expanding about 400 basis points year over year and operating margin hitting 9%. Management reiterated confidence in pushing Farnell to double-digit operating margins before the end of fiscal 2027, framing this as a key driver of future earnings. ## Strategic Capabilities Extend Beyond Components Management highlighted strategic wins that showcase Avnet’s move up the value chain, including recognition from General Motors as a creative supplier. The expansion of Avnet Integrated Solutions for data center customers positions the company not just as a distributor but as a system assembly and supply chain partner. ## Capital Allocation Backs Growth And Shareholder Returns For the first quarter of fiscal 2027, Avnet guided sales to $9.0–$9.3 billion and adjusted EPS to $2.80–$2.90, implying around 10% sequential growth at the midpoint. The company ended the year with gross leverage at 3.2x, returned $138 million via buybacks and $114 million in dividends, and maintained about $1.2 billion in available borrowing capacity. ## Subtle Pressure On Gross Margins Despite strong earnings, Avnet’s overall gross profit margin slipped 14 basis points year over year to 10.4%, even though it improved slightly sequentially. Electronic Components gross margin was flat quarter over quarter and down around 25 basis points from a year earlier, pointing to some mix and pricing pressures. ## Memory Pricing Fuels A Portion Of Growth Management noted that about one-third of both sequential and year-on-year sales growth was driven by price increases in the memory category. More than half of the increase in inventory dollars was also tied to pricing, largely in memory, indicating part of the growth reflects higher prices rather than pure volume expansion. ## Higher Inventory Dollars And Near-Term Cash Use Inventory dollars rose 11%, or about $600 million, while working capital increased $559 million, mainly due to higher accounts receivable from the $1.2 billion sales jump. Avnet used $291 million of operating cash in the quarter and expects further cash use in the next quarter to support the ongoing sales ramp. ## Rising SG&A And Cost Pressures SG&A expenses climbed to $548 million, up $96 million year over year and $29 million sequentially, reflecting incentive compensation, freight, and logistics costs tied to higher volumes. Even so, with SG&A falling sharply as a share of gross profit, management signaled that efficiency gains continue to offset much of the cost inflation. ## Tighter Supply, Longer Lead Times, And Pricing Risk The supply environment is tightening, with lead times stretching across most component categories and price increases spreading beyond memory into semiconductors and IP&E. Management flagged the risk of supplier shortages and order volatility but said it sees no clear evidence of double-ordering and is monitoring customer behavior closely. ## Guidance Points To Further Earnings Acceleration Avnet’s guidance calls for first-quarter fiscal 2027 sales of $9.0–$9.3 billion and EPS of $2.80–$2.90, with management expecting EPS to grow roughly three times and operating income about twice the rate of sales. The company aims to push SG&A below 60% of gross profit before fiscal 2027 ends, target leverage near 3x by year-end, and continue funding growth and dividends while carefully managing working capital. Avnet’s earnings call signaled a company firmly back on the front foot, combining record results with disciplined capital and working capital management. While tighter supply, cost inflation, and memory-driven pricing add complexity, investors heard a confident message that structural margin gains, Farnell’s turnaround, and strategic solutions should sustain earnings momentum. ### Related Stocks - [AVT.US](https://longbridge.com/en/quote/AVT.US.md) - [GM.US](https://longbridge.com/en/quote/GM.US.md) ## Related News & Research - [$100 Invested In Avnet 5 Years Ago Would Be Worth This Much Today](https://longbridge.com/en/news/297668596.md) - [Avnet raises dividend by 5% to $0.37](https://longbridge.com/en/news/296567525.md) - [Don't Miss These 3 Companies Delivering Strong Guidance Updates](https://longbridge.com/en/news/297536361.md) - [Strong Quarter, Buybacks and Higher Guidance Could Be A Game Changer For Avnet (AVT)](https://longbridge.com/en/news/295658003.md) - [Top Avnet Insider Executes Major Multimillion-Dollar Stock Move](https://longbridge.com/en/news/296663076.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**