Pockets of opportunity deliver for Tech Data

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Pockets of opportunity deliver for Tech Data

Simon Quicke

Tech Data has warned its next fiscal quarter is going to provide flat to low digit growth causing it to concentrate its firepower on pockets of activity where it can gain sales.

It is also expected to carry on the realignment of resources across Europe in the next quarter to ensure it has the right skills in-house to keep the distributor on track.

Despite the sobering assessment of the next quarter the numbers delivered for this one indicated that Tech Data is getting the strategy right, to concentrate on good margin opportunities, with net sales up by 7% for the three months ended 31 October to $6.59bn and net income up slightly to $53.5m from $50.5m in the same period a year earlier.

Sales in Europe improved by 10% to $3.81bn, representing 58% of worldwide net sales, with the home market of the Americas contributing $2.78bn of turnover.

Bob Dutkowsky, CEO of Tech Data said that it had been a been a difficult trading environment but it's strategy of looking for areas giving a return had paid off.

"Demonstrating the resiliency of our business model, out reams in both regions [Americas and Europe] successfully navigated a moderating demand environment - selecting pockets of opportunity and delivering year-over-year sales and earnings growth," he said.

"For the fourth quarter, we are planning, in both regions, for flat to low single-digit sales growth in local currencies. We will continue our focus on responsible growth and on the quality of the revenue opportunities we pursue, taking into consideration our gross and operating margin goals," said Dutkowsky. 

"In Europe, we are currently realigning our resources to more closely match our cost structure and our skills portfolio with market opportunities, which will result in incremental costs of approximately $15 million in the fourth quarter. Despite this, we still expect a solid fourth quarter and another record-setting year for Tech Data," he added.  

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