Tech Data Corp. tallied more than $9 billion in total third quarter sales—a record for any quarter—as the international distributor of electronics and other I.T. products and services continues its “digital transformation.”
“We remain highly confident and excited about the future of our business and the promise that the new Tech Data brings to a rapidly transitioning I.T. market,” CEO Robert Dutkowsky told analysts yesterday on the company’s Q3 earnings call. “We are building the I.T. distributor of the future, one with breadth, specialized skills and extensive capabilities to help our channel partners capitalize on growth opportunities,” he said.
Tech Data, No. 10 in the 2018 B2B E-Commerce 300, has invested in building its digital footprint in recent years and “today we execute over half of our sales and procure greater than 95% of our inventory through digital channels,” Dutkowsky said on the call, according to a transcript from Seeking Alpha.
The company didn’t break out online sales, but using the 50% rate, Q3 online sales accounted for about $4.57 billion of the company’s $9.14 billion in total sales for the quarter.
Tech Data’s digital strategy stems from its view of the I.T. market of the future, Dutkowsky said, which will be built on next-generation technologies and delivery models including cloud, hyper-cloud and hyper-converged infrastructure; solid state storage; analytics; security; and other services “that will support the entire end-to-end I.T. ecosystem.”
And there’s room to digitize Tech Data even further, Dutkowsky told analysts. “The pace of change is accelerating. To keep pace with this change we are investing in automation, advanced analytics and digital marketplaces, all of which will lead to a superior customer experience while also reducing operating expenses and enhancing our efficient, variable low-cost route-to-market for our vendor partners,” he said.
Tech Data defines digital commerce as sales through its e-commerce site, Shop.TechData.com, and through electronic data interchange, or EDI. Total sales reflect Tech Data’s February acquisition of the Technology Solutions business unit from Avnet Inc. for $2.6 billion.
For the third quarter of fiscal 2018 ended Oct. 31, 2017, Tech Data reported:
- Total sales of $9.14 billion, up 40.8% from $6.49 billion in the same quarter last year.
- Sales in the Americas of $4.0 billion, up 53.3% from $2.61 billion.
- Sales in Europe of $4.841 billion, up 24.9% from $3.875 billion.
- Asia-Pacific sales of $296.6 million and came solely from Technology Solutions. Tech Data did not sell in the region before the acquisition.
- Gross profit of $526.1 million, up 66.6% from $315.8 million.
- Net income of $37.3 million, up 2.2% from $36.5 million in the same quarter last year.
The increases in segment sales and gross profit came largely from the addition of Technology Solutions, the company says.
Power and I.T. network outages in September as a result of Hurricane Irma were estimated to cost the company $40 million to $60 million in sales in Q3, chief financial officer Charles Dannewitz noted on the earnings call.
For the first nine months of fiscal 2018 ended Oct. 31, Tech Data reported:
- Total sales of $25.68 billion, up 36.5% from $18.81 billion in the same quarter last year.
- Sales in the Americas of $11.66 billion, up 51.8% from $7.68 billion.
- Sales in Europe of $13.25 billion, up 19.0% from $11.13 billion.
- Asia-Pacific sales were $773.1 million, and came solely from Technology Solutions. Tech Data did not sell in the region before the acquisition.
- Gross profit of $1.50 billion, up 61.1% from $930.9 million.
- Net income of $115.4 million, down 0.8% from $116.3 million in the same period last year.
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