Tech Data Corp., an international distributor of electronics and other I.T. products that generates about half its sales online, recorded strong Q1 sales.
Total sales were $7.66 billion for the first quarter, up 29% from $5.96 billion in the prior-year period. Tech Data doesn’t break out online sales, but e-commerce accounts for more than half of all sales, a Tech Data spokesman said, which equates to more than $3.83 billion in the first quarter.
Tech Data defines e-commerce as sales through its e-commerce site, Shop.TechData.com, and through electronic data interchange, or EDI.
Total sales reflected the benefits of Tech Data’s February acquisition of the Technology Solutions business unit from Avnet Inc. for $2.6 billion. That business accounted for $1.6 billion in March and April, Tech Data said.
“The increase is primarily due to approximately $1.6 billion, or two months of sales, attributed to the TS (Technology Solutions) business,” Charles Dannewitz, chief financial officer, told analysts on Tech Data’s Q1 earnings call last week. “Excluding TS, Tech Data worldwide sales were up approximately 5% on a constant-currency basis,” Dannewitz said, according to a transcript of the call provided by Seeking Alpha.
For the first quarter of fiscal 2018 ended April 30, 2017, Tech Data also reported:
- Sales in the Americas of $3.47 billion, up 45.2% from $2.39 billion in the same quarter last year. The increase in net sales was primarily due to about $1.0 billion in sales Tech Data attributed to Technology Solutions. Excluding those sales in the Americas, total sales increased about 5%, Tech Data said.
- Sales in Europe of $4.01 billion, up 12.0% from $3.58 billion. The increase was attributed mainly to about $500 million of sales from Technology Solutions. Excluding Technology Solutions’ net sales in Europe, sales increased about 5%.
- Asia-Pacific sales were $188.3 million, and came solely from Technology Solutions. Tech Data did not sell in the region before the acquisition.
- Net income of $30.7 million, down 8.1% from $33.4 million in Q1 2016.
“The Americas growth was fueled by solid sales of PCs, networking products, and software subscriptions as well as sales of next generation technologies including cloud and security,” Dannewitz said. “This growth was partially offset by lower sales of tablets, legacy storage and consumer electronic products.”
In the U.S., Tech Data public sector sales grew by double-digits and its U.S. small and mid-size sales division also recorded its sixth consecutive quarter of double-digit growth, Dannewitz said. Excluding Technology Solutions, Tech Data’s sales lift came from smartphones, security, networking and software subscriptions. Those gains were partially offset by lower sales of PCs, storage and traditional software products, he said.
Asia-Pacific region sales growth came from networking and next-generation products, such as converged infrastructure and security, while sales of storage and servers declined in the region, Dannewitz told analysts.
Tech Data, No. 57 in the B2B E-Commerce 300, won the top online B2B award, and shared the top award for B2B website design with manufacturer PacknWood in the annual Internet Retailer Excellence Awards.
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