[PART I](index=3&type=section&id=PART%20I) [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Avnet, Inc. is a global electronic component distributor and solutions provider, serving diverse customers across over 140 countries through its Electronic Components (EC) and Farnell operating groups - Avnet, Inc. is a leading global electronic component technology distributor and solutions provider, serving customers in over 140 countries for more than a century[15](index=15&type=chunk) - The company operates through two primary groups: Electronic Components (EC) for high/medium-volume customers and Farnell for lower-volume customers needing quick access to components, tools, and test products, primarily via e-commerce[16](index=16&type=chunk)[18](index=18&type=chunk)[24](index=24&type=chunk) 2024 Net Sales by Product Category | Product Category | % of EC Net Sales (2024) | % of Farnell Net Sales (2024) | | :--------------- | :----------------------- | :---------------------------- | | Semiconductors | ~85% | ~16% | | IP&E Components | ~14% | ~45% | | Computers | ~1% | ~5% (Single-board) | | Other Products | - | ~34% | Consolidated Sales by Major Product Category (Fiscal Years) | Product Category | June 29, 2024 (Millions) | July 1, 2023 (Millions) | July 2, 2022 (Millions) | | :--------------- | :----------------------- | :---------------------- | :---------------------- | | Semiconductors | $19,030.3 | $21,366.5 | $18,380.2 | | IP&E | $3,745.9 | $4,150.6 | $4,639.1 | | Computers | $382.8 | $520.8 | $663.2 | | Other | $598.1 | $499.0 | $628.2 | | **Total Sales** | **$23,757.1** | **$26,536.9** | **$24,310.7** | - As of June 29, 2024, Avnet's global workforce totaled approximately **15,462 employees** across 48 countries, with significant presence in EMEA (**6,494**), Asia (**4,674**), and the Americas (**4,294**)[35](index=35&type=chunk) - The company emphasizes competitive and fair compensation, comprehensive benefits via its THRIVE program, career development, health and safety, and Diversity, Equity, and Inclusion (DEI) initiatives, including a Global DEI Council and Employee Resource Groups[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) [Organizational Structure](index=3&type=section&id=Organizational%20Structure) Avnet operates with two primary, globally managed groups: Electronic Components (EC) and Farnell, supported by regional sales and marketing units - Avnet operates with two primary groups: Electronic Components (EC) and Farnell, both having operations in the Americas, EMEA, and Asia/Pacific regions[16](index=16&type=chunk) - Each operating group has its own management and distinct financial reporting, while regional divisions primarily serve as sales and marketing units[16](index=16&type=chunk) [Electronic Components](index=3&type=section&id=Electronic%20Components) The EC group serves high and medium-volume customers, distributing semiconductors and other components with comprehensive lifecycle support for various markets - The EC group primarily serves high and medium-volume customers, distributing semiconductors, IP&E components, and other integrated/embedded components[18](index=18&type=chunk) - EC offers comprehensive support throughout the product lifecycle, including design, supply chain, programming, logistics, and post-sales services for markets like industrial, automotive, defense, and aerospace[18](index=18&type=chunk) EC Net Sales by Product (2024) | Product Category | % of EC Net Sales (2024) | | :--------------- | :----------------------- | | Semiconductor | ~85% | | IP&E Components | ~14% | | Computers | ~1% | [Farnell](index=5&type=section&id=Farnell) Farnell supports lower-volume customers by providing quick access to electronic components, tools, and industrial automation products, primarily through e-commerce - Farnell supports lower-volume customers, providing quick access to electronic components, kits, tools, industrial automation, and test/measurement products, primarily through e-commerce[24](index=24&type=chunk) Farnell Net Sales by Product (2024) | Product Category | % of Farnell Net Sales (2024) | | :---------------------- | :---------------------------- | | Semiconductor | ~16% | | IP&E Components | ~45% | | Single-board computers | ~5% | | Other products/services | ~34% | [Major Products](index=5&type=section&id=Major%20Products) Avnet's competitive strength lies in its broad supplier base, with semiconductors, IP&E, and computers being major product categories contributing to consolidated sales - The breadth and quality of Avnet's supplier base is a competitive strength, with products from one supplier accounting for approximately **10% of consolidated sales** in fiscal years 2024 and 2023[25](index=25&type=chunk) Consolidated Sales by Major Product Category (Fiscal Years) | Product Category | June 29, 2024 (Millions) | July 1, 2023 (Millions) | July 2, 2022 (Millions) | | :--------------- | :----------------------- | :---------------------- | :---------------------- | | Semiconductors | $19,030.3 | $21,366.5 | $18,380.2 | | IP&E | $3,745.9 | $4,150.6 | $4,639.1 | | Computers | $382.8 | $520.8 | $663.2 | | Other | $598.1 | $499.0 | $628.2 | | **Total Sales** | **$23,757.1** | **$26,536.9** | **$24,310.7** | [Competition & Markets](index=7&type=section&id=Competition%20%26%20Markets) The electronic components industry is highly competitive, with key factors including inventory, product selection, pricing, and value-added services - The electronic components industry is highly competitive, with major competitors including Arrow Electronics, Future Electronics, World Peace Group, and WT Microelectronics for EC, and Mouser Electronics, Digi-Key Electronics, and RS Components for Farnell[29](index=29&type=chunk) - Key competitive factors include inventory availability, product selection, pricing, and value-added services like design support, supply chain management, and materials management[30](index=30&type=chunk)[31](index=31&type=chunk) [Seasonality](index=7&type=section&id=Seasonality) Avnet's business is not materially impacted by seasonality, except for geographic sales shifts affecting gross profit and operating income margins - Avnet's business is not materially impacted by seasonality, except for shifts in geographic sales trends from Asia in the first half of a fiscal year to the Americas and EMEA in the second half, affecting gross profit and operating income margins[32](index=32&type=chunk) [Human Capital](index=7&type=section&id=Human%20Capital) Avnet's global workforce of approximately 15,462 employees is supported by competitive compensation, comprehensive benefits, career development, and strong DEI initiatives - As of June 29, 2024, Avnet's global workforce comprised approximately **15,462 employees** across 48 countries, with **4,294** in the Americas, **6,494** in EMEA, and **4,674** in Asia[35](index=35&type=chunk) - The company focuses on competitive and fair compensation, comprehensive benefits through its THRIVE program, career development, health and safety, and Diversity, Equity, and Inclusion (DEI) initiatives[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk)[40](index=40&type=chunk) - DEI efforts are overseen by a Global DEI Council, and the Board of Directors was **30% women** and **50% racially/ethnically diverse** as of June 29, 2024. Executive incentive compensation includes DEI performance goals[40](index=40&type=chunk) - Employee engagement is measured through regular global surveys, achieving a **71.6% participation rate** in fiscal 2024, an increase from fiscal 2023[42](index=42&type=chunk) [Available Information](index=11&type=section&id=Available%20Information) Avnet's financial reports, proxy statements, and corporate governance documents are publicly available through the SEC and the company's investor relations website - Avnet files its annual, quarterly, and current reports, proxy statements, and other documents with the U.S. Securities and Exchange Commission (SEC), available on the SEC's website and Nasdaq[43](index=43&type=chunk) - Company filings and corporate governance information, including Corporate Governance Guidelines, Code of Conduct, and Board committee charters, are also available on Avnet's investor relations website[43](index=43&type=chunk)[44](index=44&type=chunk) [Item 1A. Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) Avnet faces diverse risks including business and operational challenges, international uncertainties, financial constraints, and threats to information systems and data security - Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, and actual results could differ materially from expectations[46](index=46&type=chunk) - Business and operations risks include changes in customer needs and consumption models (e.g., AI technology), semiconductor industry fluctuations, geopolitical uncertainty leading to shortages, and potential disruptions to key supplier and customer relationships[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) Semiconductor Sales as % of Consolidated Sales | Fiscal Year | % of Consolidated Sales | | :---------- | :---------------------- | | 2024 | ~80% | | 2023 | ~81% | | 2022 | ~76% | - International operations, accounting for approximately **77% of sales in fiscal 2024**, are subject to risks like fund repatriation restrictions, foreign currency fluctuations, non-compliance with various international laws, trade restrictions, and economic/political instability[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk)[59](index=59&type=chunk) - Financial risks include inventory value declines due to technological change or oversupply, accounts receivable defaults, liquidity and capital resource constraints, and limitations imposed by financing covenants[66](index=66&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[74](index=74&type=chunk) - General risks encompass negative impacts from economic or geopolitical uncertainty (e.g., military conflicts, inflation), intense competition, and challenges in employee retention and hiring[89](index=89&type=chunk)[91](index=91&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk) [Forward-Looking Statements and Risk Factors](index=13&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The report contains forward-looking statements subject to numerous assumptions, risks, and uncertainties, with no obligation for the company to update them unless legally required - The report contains forward-looking statements subject to numerous assumptions, risks, and uncertainties, and actual results may differ materially from those expressed or implied[46](index=46&type=chunk) - The company does not undertake to update forward-looking statements, except as required by law[46](index=46&type=chunk) [Business and Operations Risks](index=15&type=section&id=Business%20and%20Operations%20Risks) Risks include changes in customer demand, semiconductor industry cycles, supply chain disruptions, and reliance on key supplier relationships impacting financial results - Changes in customer product demands, consumption models, and technology (e.g., AI) could negatively impact billings and financial results[48](index=48&type=chunk) - The semiconductor industry's cyclical fluctuations, geopolitical uncertainties, and supply chain challenges can lead to product shortages, extended lead times, and order cancellations[49](index=49&type=chunk) Semiconductor Sales as % of Consolidated Sales | Fiscal Year | % of Consolidated Sales | | :---------- | :---------------------- | | 2024 | ~80% | | 2023 | ~81% | | 2022 | ~76% | - Disruptions to key supplier relationships, including termination of agreements or changes in contract terms (e.g., price protection, return rights), could adversely affect the company's business and profitability[50](index=50&type=chunk)[51](index=51&type=chunk) [Risks related to international operations](index=17&type=section&id=Risks%20related%20to%20international%20operations) International operations face risks from fund repatriation restrictions, currency fluctuations, regulatory non-compliance, trade restrictions, and geopolitical instability Sales from Operations Outside the United States | Fiscal Year | % of Total Sales | | :---------- | :--------------- | | 2024 | ~77% | | 2023 | ~76% | | 2022 | ~77% | - Risks include restrictions on repatriating funds, foreign currency and interest rate fluctuations, non-compliance with various foreign regulations (data privacy, anti-corruption, import/export), and economic/political instability[54](index=54&type=chunk)[55](index=55&type=chunk)[59](index=59&type=chunk) - Tariffs, trade restrictions, and sanctions (e.g., related to China, Hong Kong, Russia-Ukraine conflict) could lead to losses, increased costs, material shortages, and higher operational expenses[56](index=56&type=chunk)[58](index=58&type=chunk) [Internal information systems failures](index=19&type=section&id=Internal%20information%20systems%20failures) Failures or difficulties in upgrading internal information systems could adversely affect global operations, internal controls, financial reporting, and online sales attractiveness - The company relies on multiple information systems for global operations, and failures or difficulties in upgrading these systems could adversely affect business, internal controls, and financial reporting[60](index=60&type=chunk) - System interruptions and delays, especially for online sales, could reduce the attractiveness of products and services[61](index=61&type=chunk) [Logistics disruptions](index=19&type=section&id=Logistics%20disruptions) Major interruptions at distribution centers or from third-party transportation providers could lead to delays, increased expenses, and negative impacts on business and reputation - Major interruptions at distribution centers or disruptions from third-party transportation providers could cause delays, increased expenses, and adverse impacts on business, operations, and reputation[62](index=62&type=chunk) [Data security and privacy threats](index=21&type=section&id=Data%20security%20and%20privacy%20threats) Increasingly sophisticated cybersecurity threats and non-compliance with data privacy laws pose significant liability, reputational harm, and adverse financial effects - Increasingly frequent and sophisticated cybersecurity threats (e.g., phishing, ransomware, AI-driven attacks) pose significant potential liability and reputational harm, despite implemented security controls[64](index=64&type=chunk)[65](index=65&type=chunk) - Failure to comply with cybersecurity, data privacy, and data protection laws could lead to fines, litigation, and adverse effects on business and financial condition[65](index=65&type=chunk) [Financial Risks](index=21&type=section&id=Financial%20Risks) Financial risks include inventory value declines, accounts receivable defaults, liquidity constraints, financing covenant restrictions, and changes in tax laws - Inventory value declines due to technological change, new products, decreased demand, or oversupply pose a risk, despite supplier protections which may not fully compensate for losses[66](index=66&type=chunk)[69](index=69&type=chunk) - Accounts receivable defaults, especially during economic downturns, could adversely affect the company's business, operating results, financial condition, or liquidity[70](index=70&type=chunk) - Liquidity and capital resources constraints, including reliance on external financing, are subject to market conditions, interest rate fluctuations, and debt ratings, potentially leading to higher financing costs or reduced access to capital[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - Financing covenants and restrictions in credit facilities and indentures limit the company's ability to grant liens, make restricted payments (e.g., dividends, share repurchases), incur additional debt, or engage in certain transactions[74](index=74&type=chunk)[75](index=75&type=chunk) - Changes in tax laws and regulations, including the OECD's Base Erosion and Profit Shifting Project (Pillar Two), could adversely affect cash flow, share buyback costs, and the effective tax rate, with Pillar Two expected to impact taxes in fiscal year 2025[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - Constraints on internal controls, due to human error or circumvention, could lead to material misstatements, harm the company's brand, and result in sanctions or investigations[79](index=79&type=chunk)[81](index=81&type=chunk) - Strategic acquisitions and investments involve risks such as integration difficulties, unexpected costs, and diversion of management attention, potentially impacting profitability[82](index=82&type=chunk) [Legal and Regulatory Risks](index=27&type=section&id=Legal%20and%20Regulatory%20Risks) Legal proceedings and non-compliance with environmental regulations could result in substantial costs, management distraction, and adverse effects on operations and reputation - Legal proceedings, including intellectual property, commercial, and product liability matters, could result in substantial costs, diversion of management efforts, and adverse effects on operations and reputation[83](index=83&type=chunk)[86](index=86&type=chunk) - Non-compliance with environmental regulations, which may impose liability without fault, could lead to substantial costs, fines, civil/criminal sanctions, and reputational harm[87](index=87&type=chunk)[88](index=88&type=chunk) [General Risk Factors](index=29&type=section&id=General%20Risk%20Factors) General risks include economic and geopolitical uncertainty, inflation, intense competition, and challenges in attracting and retaining qualified employees - Economic or geopolitical uncertainty and health crises can lead to decreased sales, margins, and earnings, increased logistics costs, demand uncertainty, and global supply chain disruptions[89](index=89&type=chunk) - Inflation could affect profitability and cash flows due to higher wages, operating expenses, financing costs, and supplier prices, which may not be passed on to customers[91](index=91&type=chunk)[92](index=92&type=chunk) - Intense competition, including from new competitors and direct sales efforts by suppliers, could cause deterioration of gross profit margins and overall profitability[94](index=94&type=chunk)[95](index=95&type=chunk) - Challenges in identifying, hiring, training, developing, and retaining qualified employees, exacerbated by immigration restrictions and workforce trends, are critical to the company's success[96](index=96&type=chunk) [Item 1B. Unresolved Staff Comments](index=31&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This item is not applicable to the company - The company has no unresolved staff comments to report[97](index=97&type=chunk) [Item 1C. Cybersecurity](index=31&type=section&id=Item%201C.%20Cybersecurity) Avnet's comprehensive cybersecurity program, managed by the GC&C team, aligns with NIST and ISO27001 frameworks, includes third-party risk oversight, and is regularly updated to the Audit Committee - Avnet's Global Cybersecurity & Compliance (GC&C) team manages a comprehensive cybersecurity program, aligning with NIST Cyber Security Framework and ISO27001 standards[98](index=98&type=chunk)[99](index=99&type=chunk)[101](index=101&type=chunk) - The program includes policies for safe data processing, storage, and transmission, and oversees third-party service provider cybersecurity risks through evaluations and certifications[98](index=98&type=chunk)[101](index=101&type=chunk) - The Audit Committee receives quarterly updates on the cybersecurity program, incidents, and threat landscape, with management providing updates to the senior executive team[101](index=101&type=chunk)[102](index=102&type=chunk) - Regular security testing includes external penetration tests and maturity assessments, quarterly self-assessments, and ongoing internal audits. Employee training covers annual tabletop exercises, biennial computer-based training, and monthly phishing simulations[103](index=103&type=chunk) [Item 2. Properties](index=35&type=section&id=Item%202.%20Properties) Avnet owns approximately 2.0 million square feet and leases 4.0 million square feet globally, with key facilities supporting warehousing, value-added operations, and corporate functions - Avnet owns approximately **2.0 million square feet** and leases approximately **4.0 million square feet** of space, with about **25%** located in the United States[105](index=105&type=chunk) Key Facilities and Primary Use | Location | Footage (Approximate) | Ownership | Primary Use | | :------------------- | :-------------------- | :-------- | :----------------------------------------------- | | Bernburg, Germany | 680,000 | Owned | EC warehousing and value-added operations | | Chandler, Arizona | 400,000 | Owned | EC warehousing and value-added operations | | Tongeren, Belgium | 390,000 | Owned | EC warehousing and value-added operations | | Leeds, United Kingdom| 360,000 | Leased | Farnell warehousing and value-added operations | | Poing, Germany | 300,000 | Owned | EC warehousing and value-added operations | | Chandler, Arizona | 230,000 | Leased | EC warehousing, integration, value-added operations | | Gaffney, South Carolina| 220,000 | Owned | Farnell warehousing | | Hong Kong, China | 210,000 | Leased | EC warehousing | | Phoenix, Arizona | 180,000 | Leased | Corporate and EC Americas headquarters | | Taipei, Taiwan | 33,000 | Leased | EC warehousing | [Item 3. Legal Proceedings](index=35&type=section&id=Item%203.%20Legal%20Proceedings) Avnet regularly assesses legal and environmental matters, concluding no specific public disclosure is required, with appropriate accruals made for estimable costs - Avnet regularly assesses legal proceedings and environmental matters, concluding that no specific pending legal proceeding requires public disclosure[108](index=108&type=chunk) - Management believes that estimable costs for environmental and other legal proceedings have been appropriately accrued in the consolidated financial statements[108](index=108&type=chunk) - Resolution of current legal matters is not expected to materially affect financial position or liquidity, but could be material to results of operations in any single reporting period[109](index=109&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - The company has no mine safety disclosures to report[110](index=110&type=chunk) [PART II](index=37&type=section&id=PART%20II) [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=37&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Avnet's common stock trades on Nasdaq, with future dividends determined by the Board, and the company repurchased $162.7 million of common stock in fiscal 2024 under its $600 million plan - Avnet's common stock is listed on the Nasdaq Global Select Market under the symbol AVT[111](index=111&type=chunk) - Future dividends are at the discretion of the Board of Directors, dependent on financial condition, results of operations, and capital requirements, and may be restricted by debt facilities[111](index=111&type=chunk) - As of August 2, 2024, there were **1,309 registered holders** of Avnet's common stock[112](index=112&type=chunk) Issuer Purchases of Equity Securities (Q4 Fiscal 2024) | Period | Total Shares Purchased | Average Price Paid per Share | Value Remaining Under Plan | | :--------------------- | :--------------------- | :--------------------------- | :------------------------- | | March 31 – April 27 | — | — | $232,484,000 | | April 28 – May 25 | 560,000 | $53.17 | $202,707,000 | | May 26 – June 29 | 920,000 | $53.23 | $153,734,000 | - The company repurchased **$162.7 million** of common stock in fiscal 2024 under a **$600 million** share repurchase plan, with **$153.7 million** remaining as of June 29, 2024[116](index=116&type=chunk)[149](index=149&type=chunk)[165](index=165&type=chunk) [Market Information](index=37&type=section&id=Market%20Information) Avnet's common stock is publicly traded on the Nasdaq Global Select Market under the ticker symbol AVT - Avnet's common stock is traded on the Nasdaq Global Select Market under the symbol AVT[111](index=111&type=chunk) [Dividends](index=37&type=section&id=Dividends) Future dividends are at the Board of Directors' discretion, based on financial performance, capital needs, and potential restrictions from debt facilities - Future dividends are subject to the Board of Directors' discretion, based on financial condition, results, capital requirements, and debt facility restrictions[111](index=111&type=chunk) [Record Holders](index=37&type=section&id=Record%20Holders) As of August 2, 2024, there were 1,309 registered holders of Avnet's common stock - As of August 2, 2024, there were **1,309 registered holders** of Avnet's common stock[112](index=112&type=chunk) [Stock Performance Graphs and Cumulative Total Returns](index=37&type=section&id=Stock%20Performance%20Graphs%20and%20Cumulative%20Total%20Returns) The report provides a 5-year cumulative total return comparison of Avnet's stock against the Nasdaq Composite Index and a customized peer group - The report includes a graph comparing Avnet's 5-year cumulative total return against the Nasdaq Composite Index and a customized peer group (Agilysys Inc., Arrow Electronics Inc., Insight Enterprises Inc., Scansource Inc., and TD Synnex Corporation)[112](index=112&type=chunk) Cumulative 5-Year Total Return (Indexed to $100 on 6/29/2019) | Date | Avnet, Inc. | Nasdaq Composite | Peer Group | | :--------- | :---------- | :--------------- | :--------- | | 6/29/2019 | $100 | $100 | $100 | | 6/27/2020 | $58.93 | $123.12 | $97.85 | | 7/3/2021 | $92.88 | $186.10 | $195.13 | | 7/2/2022 | $100.49 | $142.44 | $173.37 | | 7/1/2023 | $123.19 | $178.08 | $213.64 | | 6/29/2024 | $128.95 | $230.80 | $248.09 | [Issuer Purchases of Equity Securities](index=38&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) The Board approved a $600 million share repurchase plan, under which the company bought back $162.7 million of common stock in fiscal 2024 - The Board of Directors approved a share repurchase plan of up to **$600 million** of common stock[116](index=116&type=chunk) Issuer Purchases of Equity Securities (Q4 Fiscal 2024) | Period | Total Shares Purchased | Average Price Paid per Share | Value Remaining Under Plan | | :--------------------- | :--------------------- | :--------------------------- | :------------------------- | | March 31 – April 27 | — | — | $232,484,000 | | April 28 – May 25 | 560,000 | $53.17 | $202,707,000 | | May 26 – June 29 | 920,000 | $53.23 | $153,734,000 | - During fiscal 2024, the company repurchased **$162.7 million** of common stock under the plan[149](index=149&type=chunk) [Item 6. [Reserved]](index=39&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Avnet's fiscal 2024 saw a 10.5% sales decrease to $23.76 billion and a 35.3% net income drop to $498.7 million due to market downturns, offset by improved operating cash flow of $690.0 million from working capital reductions - The global electronic components market experienced a downturn in the second half of calendar year 2023, marked by decreased sales due to elevated customer inventory and lower underlying demand[125](index=125&type=chunk) Key Financial Highlights (Fiscal Years) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :--------------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Sales | $23,757 | $26,537 | $(2,780) | (10.5)% | | Gross profit | $2,766 | $3,182 | $(416) | (13.1)% | | Operating income | $844 | $1,187 | $(342) | (28.9)% | | Adjusted operating income | $900 | $1,221 | $(321) | (26.3)% | | Net income | $499 | $771 | $(272) | (35.3)% | | Diluted earnings per share | $5.43 | $8.26 | $(2.83) | (34.3)% | | Gross profit margin | 11.6% | 12.0% | (35)bps | (0.4)% | | Operating income margin | 3.6% | 4.5% | (92)bps | (0.9)% | | Adjusted operating income margin | 3.8% | 4.6% | (81)bps | (0.8)% | - Sales for fiscal 2024 decreased by **10.5% to $23.76 billion**, primarily due to reduced sales volume from the market downturn and an unfavorable product mix of lower-priced electronic components[129](index=129&type=chunk) - Net cash provided by operating activities significantly increased to **$690.0 million** in fiscal 2024 from a net cash use of **$713.7 million** in fiscal 2023, driven by improvements in working capital[148](index=148&type=chunk) - The company repaid **$156.5 million** in debt during fiscal 2024 and repurchased **$162.7 million** of common stock[149](index=149&type=chunk) [Industry outlook](index=41&type=section&id=Industry%20outlook) The global electronic components market is experiencing a downturn since mid-2023 due to elevated customer inventory and decreased demand, impacting future sales and earnings - The global electronic components market is experiencing a downturn since the second half of calendar year 2023, characterized by decreased sales due to elevated customer inventory and lower demand[125](index=125&type=chunk) - The company expects sales in the first quarter of fiscal 2025 to be flat to **5% lower** than the fourth quarter of fiscal 2024, negatively impacting operating income and diluted EPS[125](index=125&type=chunk) [Sales](index=41&type=section&id=Sales) Fiscal 2024 sales decreased by 10.5% to $23.76 billion, driven by reduced volumes across all regions and an unfavorable product mix in both EC and Farnell segments Sales Performance (Fiscal 2024 vs. 2023) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | Constant Currency Change (%) | | :----- | :----------------------- | :---------------------- | :----------- | :----------- | :--------------------------- | | Total | $23,757.1 | $26,536.9 | $(2,780) | (10.5)% | (10.9)% | Sales by Operating Group (Fiscal 2024 vs. 2023) | Operating Group | June 29, 2024 (Millions) | % of Total | July 1, 2023 (Millions) | % of Total | Year-Year % Change | Constant Currency Change (%) | | :-------------- | :----------------------- | :--------- | :---------------------- | :--------- | :----------------- | :--------------------------- | | EC | $22,160.0 | 93.3% | $24,802.6 | 93.5% | (10.7)% | (11.0)% | | Farnell | $1,597.1 | 6.7% | $1,734.3 | 6.5% | (7.9)% | (9.3)% | Sales by Geographic Region (Fiscal 2024 vs. 2023) | Geographic Region | June 29, 2024 (Millions) | % of Total | July 1, 2023 (Millions) | % of Total | Year-Year % Change | Constant Currency Change (%) | | :---------------- | :----------------------- | :--------- | :---------------------- | :--------- | :----------------- | :--------------------------- | | Americas | $5,919.2 | 24.9% | $6,807.7 | 25.7% | (13.1)% | (13.1)% | | EMEA | $8,395.0 | 35.3% | $9,229.4 | 34.8% | (9.0)% | (11.4)% | | Asia | $9,442.9 | 39.8% | $10,499.8 | 39.5% | (10.1)% | (9.0)% | - EC sales decreased **10.7%** (**11.0% in constant currency**) due to sales volume decreases across all regions and an unfavorable product mix. Farnell sales decreased **7.9%** due to lower demand, partially offset by increased demand for single-board computers[130](index=130&type=chunk) [Gross Profit](index=42&type=section&id=Gross%20Profit) Gross profit and margin decreased primarily due to lower sales volumes and a product mix shift towards lower-margin electronic components across both operating groups Gross Profit Performance (Fiscal 2024 vs. 2023) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :---------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Gross profit | $2,766.4 | $3,182.1 | $(415.7) | (13.1)% | | Gross profit margin | 11.6% | 12.0% | (35)bps | (0.4)% | - The decrease in gross profit and margin was primarily due to lower sales volumes and an increase in product mix towards lower-margin electronic components[131](index=131&type=chunk)[132](index=132&type=chunk) - EC gross profit margin decreased due to a shift to lower-margin components, while Farnell's margin decreased due to lower sales of higher-margin components and the unwinding of component shortage pricing premiums[134](index=134&type=chunk) [Selling, General and Administrative Expenses](index=44&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) SG&A expenses decreased due to lower variable operating costs and restructuring actions, but increased as a percentage of sales and gross profit, indicating reduced operating leverage SG&A Expenses Performance (Fiscal 2024 vs. 2023) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :----------------------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Selling, general and administrative expenses | $1,869.5 | $1,967.3 | $(97.8) | (5.0)% | | SG&A as % of sales | 7.9% | 7.4% | +0.5% | | | SG&A as % of gross profit | 67.6% | 61.8% | +5.8% | | - The decrease in SG&A expenses was primarily due to lower variable operating expenses associated with decreased sales volumes and restructuring actions, partially offset by inflation and foreign currency impacts[135](index=135&type=chunk) - SG&A as a percentage of sales and gross profit increased due to lower sales and gross profit without a proportional reduction in SG&A, indicating lower operating leverage[136](index=136&type=chunk) [Restructuring, Integration and Other Expenses](index=44&type=section&id=Restructuring%2C%20Integration%20and%20Other%20Expenses) In fiscal 2024, the company incurred $52.55 million in restructuring and integration expenses, including severance for approximately 600 employees, targeting $110 million in annual cost reductions Restructuring, Integration and Other Expenses (Fiscal Years) | Expense Category | June 29, 2024 (Millions) | July 1, 2023 (Millions) | | :----------------------------------- | :----------------------- | :---------------------- | | Restructuring, integration, and other expenses | $52.55 | $28.04 | - In fiscal 2024, the company recorded **$39.5 million** in restructuring costs, primarily for severance related to a reduction of approximately **600 employees**, aiming for **$110 million** in annual expense reductions across Farnell, EC, and corporate[137](index=137&type=chunk)[343](index=343&type=chunk) - Integration expenses of **$13.1 million** related to warehouse consolidation, and other expenses of **$5.5 million** were for potential M&A activity. A **$5.5 million** benefit was recorded for environmental remediation reserves[137](index=137&type=chunk) [Operating Income](index=44&type=section&id=Operating%20Income) Operating income and margin decreased significantly due to lower gross profit, a disproportionate SG&A reduction, and higher restructuring and integration expenses Operating Income Performance (Fiscal 2024 vs. 2023) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :--------------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Operating income | $844.4 | $1,186.8 | $(342.4) | (28.9)% | | Operating income margin | 3.6% | 4.5% | (92)bps | (0.9)% | | Adjusted operating income | $900.0 | $1,220.9 | $(320.8) | (26.3)% | | Adjusted operating income margin | 3.8% | 4.6% | (81)bps | (0.8)% | - The decrease in operating income and margin was primarily due to lower gross profit from reduced sales and an unfavorable gross margin, without a proportionate decrease in SG&A expenses, and higher restructuring/integration expenses[141](index=141&type=chunk) - EC operating income decreased **19.7% to $947.6 million**, and Farnell operating income decreased **60.8% to $64.8 million**, both due to lower sales and gross margin without proportional SG&A reductions[142](index=142&type=chunk) [Interest and Other Financing Expenses, Net and Other (Expense) Income, Net](index=46&type=section&id=Interest%20and%20Other%20Financing%20Expenses%2C%20Net%20and%20Other%20%28Expense%29%20Income%2C%20Net) Interest and other financing expenses increased due to higher borrowings and rates, while other income shifted to an expense primarily from foreign currency translation losses Interest and Other Financing Expenses, Net (Fiscal Years) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :--------------------------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Interest and other financing expenses, net | $282.9 | $250.9 | $32.0 | 12.8% | - The increase in interest and other financing expenses was due to higher outstanding borrowings and increased average borrowing rates[143](index=143&type=chunk) Other (Expense) Income, Net (Fiscal Years) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :------------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Other (expense) income, net | $(15.7) | $9.9 | $(25.6) | (258.8)% | - The shift to other expenses was primarily due to foreign currency translation losses[143](index=143&type=chunk) [Gain on Legal Settlements and Other](index=46&type=section&id=Gain%20on%20Legal%20Settlements%20and%20Other) The company recorded significant gains from capacitor manufacturer settlements in fiscal 2024 and 2023, with a non-cash pension settlement expense in fiscal 2023 Gain on Legal Settlements and Other (Fiscal Years) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :------------------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Gain on legal settlements and other | $86.5 | $37.0 | $49.5 | 133.5% | - The company recorded gains of **$86.5 million** in fiscal 2024 and **$74.4 million** in fiscal 2023 from settlements of claims against capacitor manufacturers[144](index=144&type=chunk)[328](index=328&type=chunk) - In fiscal 2023, a non-cash settlement expense of **$37.4 million** was recognized related to a pension liability de-risking strategy[144](index=144&type=chunk) [Income Tax](index=46&type=section&id=Income%20Tax) Income tax expense decreased due to lower pre-tax income, and the effective tax rate slightly declined due to a favorable income mix in lower tax foreign jurisdictions Income Tax Expense and Effective Tax Rate (Fiscal Years) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Income tax expense | $133.6 | $212.0 | $(78.4) | (37.0)% | | Effective tax rate | 21.1% | 21.6% | (45)bps | (0.5)% | - The decrease in the effective tax rate was primarily due to the mix of income in lower tax foreign jurisdictions, partially offset by increases to unrecognized tax benefit reserves[145](index=145&type=chunk) [Net Income](index=46&type=section&id=Net%20Income) Net income and diluted earnings per share significantly decreased in fiscal 2024, reflecting the overall market downturn and reduced profitability Net Income and Diluted EPS (Fiscal Years) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | Variance ($) | Variance (%) | | :------------------------- | :----------------------- | :---------------------- | :----------- | :----------- | | Net income | $498.7 | $770.8 | $(272.1) | (35.3)% | | Diluted earnings per share | $5.43 | $8.26 | $(2.83) | (34.3)% | [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow significantly improved to $690.0 million in fiscal 2024, driven by working capital improvements, enabling debt repayments and share repurchases while maintaining strong compliance with financing covenants - Net cash provided by operating activities increased by **$1.40 billion** year-over-year to **$690.0 million** in fiscal 2024, primarily due to improvements in cash used for working capital[148](index=148&type=chunk) - The company made net debt repayments of **$156.5 million** and repurchased **$162.7 million** of common stock in fiscal 2024[149](index=149&type=chunk) - Avnet uses diverse financing arrangements, including public debt, bank loans, a revolving credit facility, and an accounts receivable securitization program, to fund operations and manage costs[151](index=151&type=chunk) - As of June 29, 2024, the company was in compliance with all covenants under its Credit Facility and Securitization Program, which include limitations on debt, share repurchases, dividends, and a required leverage ratio[155](index=155&type=chunk)[156](index=156&type=chunk) Cash and Cash Equivalents (Fiscal Year End) | Metric | June 29, 2024 (Millions) | July 1, 2023 (Millions) | | :---------------------- | :----------------------- | :---------------------- | | Total Cash & Equivalents | $310.9 | $288.2 | | Held outside U.S. | $179.6 | $194.5 | - Combined availability under the Credit Facility and Securitization Program was **$844.5 million** as of June 29, 2024[161](index=161&type=chunk) Contractual Obligations as of June 29, 2024 (Millions) | Contractual Obligations | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :--------------------------- | :--------- | :--------------- | :-------- | :-------- | :---------------- | | Long-term debt obligations | $2,910.9 | $492.7 | $550.0 | $1,245.5 | $622.7 | | Interest expense on long-term debt | $493.9 | $134.9 | $211.0 | $78.2 | $69.8 | | Operating lease obligations | $266.8 | $60.0 | $81.0 | $41.8 | $84.0 | [Critical Accounting Policies](index=54&type=section&id=Critical%20Accounting%20Policies) Avnet's critical accounting policies involve significant judgments and estimates, particularly concerning inventory valuation and the complex accounting for income taxes - Avnet's critical accounting policies involve significant judgments and estimates, particularly for the valuation of inventories and accounting for income taxes[169](index=169&type=chunk) - Inventories are recorded at the lower of cost or estimated net realizable value, with regular evaluations for demand, obsolescence, and market prices, considering supplier protections[170](index=170&type=chunk)[171](index=171&type=chunk) - Accounting for income taxes requires judgment in determining tax expense, unrecognized tax benefit liabilities, deferred tax assets/liabilities, and valuation allowances, based on future taxable income and tax planning strategies[172](index=172&type=chunk)[173](index=173&type=chunk)[176](index=176&type=chunk) [Recently Issued Accounting Pronouncements](index=56&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) New accounting standards, ASU No. 2023-09 (Income Taxes) and ASU No. 2023-07 (Segment Reporting), will enhance disclosures and improve segment reporting in future fiscal years - ASU No. 2023-09 (Income Taxes) will be effective for the company in fiscal year 2026, requiring enhanced tax disclosures[177](index=177&type=chunk) - ASU No. 2023-07 (Segment Reporting) will be effective for the company in fiscal year 2025, improving segment disclosure requirements[178](index=178&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Avnet manages interest rate and foreign currency exchange rate risks through financial arrangements, including economic hedges and short-term forward contracts, maintaining a mix of fixed and floating rate debt - Avnet uses financial arrangements, including economic hedges, to reduce earnings and cash flow volatility from changes in interest rates and foreign currency exchange rates[179](index=179&type=chunk)[184](index=184&type=chunk) Scheduled Debt Maturities as of June 29, 2024 (Millions) | Liabilities | 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | Total | | :---------------- | :----- | :----- | :--- | :----- | :--- | :--------- | :--------- | | Fixed rate debt | $2.7 | $550.0 | $— | $500.0 | $— | $622.7 | $1,675.4 | | Floating rate debt| $490.0 | $— | $— | $745.5 | $— | $— | $1,235.5 | Debt Carrying and Fair Values with Average Interest Rates (Millions) | Liabilities | Carrying Value (June 29, 2024) | Fair Value (June 29, 2024) | Average Interest Rate (June 29, 2024) | | :---------------- | :----------------------------- | :------------------------- | :------------------------------------ | | Fixed rate debt | $1,675.4 | $1,621.1 | 5.0% | | Floating rate debt| $1,235.5 | $1,235.5 | 5.5% | - Foreign currency exposure is managed through natural hedging and derivative financial instruments, primarily forward foreign currency exchange contracts with maturities typically less than 60 days[184](index=184&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=59&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Avnet's consolidated financial statements for fiscal years 2024, 2023, and 2022, with an unqualified opinion from KPMG LLP on both financial statements and internal control effectiveness - The section includes Avnet's Consolidated Financial Statements: Balance Sheets, Statements of Operations, Comprehensive Income, Shareholders' Equity, and Cash Flows for fiscal years 2024, 2023, and 2022[187](index=187&type=chunk) - KPMG LLP, the independent registered public accounting firm, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of June 29, 2024[188](index=188&type=chunk)[189](index=189&type=chunk) - The critical audit matter identified was the evaluation of accounting for income taxes, requiring complex auditor judgment and specialized tax professionals[197](index=197&type=chunk)[198](index=198&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=67&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with accountants on accounting and financial disclosure - The company reports no changes in or disagreements with accountants on accounting and financial disclosure[347](index=347&type=chunk) [Item 9A. Controls and Procedures](index=67&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of June 29, 2024, with no material changes in Q4 fiscal 2024 - The CEO and CFO concluded that Avnet's disclosure controls and procedures were effective as of June 29, 2024[348](index=348&type=chunk) - Management assessed and concluded that the company maintained effective internal control over financial reporting as of June 29, 2024, based on the 2013 COSO framework[349](index=349&type=chunk) - KPMG LLP audited and confirmed the effectiveness of the company's internal controls over financial reporting[350](index=350&type=chunk) - No material changes to internal control over financial reporting occurred during the fourth quarter of fiscal 2024[351](index=351&type=chunk) [Item 9B. Other Information](index=67&type=section&id=Item%209B.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 29, 2024 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 29, 2024[352](index=352&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=67&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - The company has no disclosures regarding foreign jurisdictions that prevent inspections[352](index=352&type=chunk) [PART III](index=106&type=section&id=PART%20III) [Item 10. Directors, Executive Officers and Corporate Governance](index=106&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance, including the updated Insider Trading Policy, is incorporated by reference from the November 22, 2024, proxy statement - Information for this item is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Stockholders on November 22, 2024[353](index=353&type=chunk) - The company has an Insider Trading Policy, updated as of June 1, 2024, designed to ensure compliance with insider trading laws and exchange listing standards[353](index=353&type=chunk) [Item 11. Executive Compensation](index=106&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Stockholders on November 22, 2024 - Information for this item is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Stockholders on November 22, 2024[354](index=354&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=106&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership of beneficial owners and management is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Stockholders on November 22, 2024 - Information for this item is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Stockholders on November 22, 2024[354](index=354&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=106&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Shareholders on November 22, 2024 - Information for this item is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Shareholders on November 22, 2024[355](index=355&type=chunk) [Item 14. Principal Accounting Fees and Services](index=106&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Stockholders on November 22, 2024 - Information for this item is incorporated by reference from the company's definitive proxy statement for the Annual Meeting of Stockholders on November 22, 2024[356](index=356&type=chunk) [PART IV](index=106&type=section&id=PART%20IV) [Item 15. Exhibits and Financial Statement Schedules](index=106&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements, supplementary data, and a comprehensive index of exhibits including organizational documents, debt instruments, and compensation plans - The financial statements and supplementary data are listed under Item 8 of this Report[357](index=357&type=chunk) - Exhibits include the Restated Certificate of Incorporation, By-laws, Description of Registrant's Securities, various Indentures for Notes, and forms of Officer's Certificates for debt terms[357](index=357&type=chunk)[358](index=358&type=chunk)[359](index=359&type=chunk)[360](index=360&type=chunk) - Executive compensation plans and arrangements, such as letter agreements, change of control agreements, severance plans, and stock compensation plans, are also listed as exhibits[361](index=361&type=chunk)[362](index=362&type=chunk)[363](index=363&type=chunk)[365](index=365&type=chunk) - Bank agreements, including the Securitization Program and the Credit Facility, along with their amendments, are detailed[366](index=366&type=chunk)[367](index=367&type=chunk)[368](index=368&type=chunk) - Other exhibits include the Insider Trading Policy, List of Subsidiaries, Consent of KPMG LLP, Power of Attorney, and various certifications (e.g., Sarbanes-Oxley Act)[369](index=369&type=chunk)[370](index=370&type=chunk) [Item 16. Form 10-K Summary](index=113&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - The company states that Item 16, Form 10-K Summary, is not applicable[370](index=370&type=chunk)

Have you evaluated the performance of Avnet's (AVT) international operations during the quarter that concluded in June 2024? Considering the extensive worldwide presence of this distributor of electronic components, analyzing the patterns in international revenues is crucial for understanding its financial resilience and potential for growth.In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial he ...

Avnet (AVT) shares gained nearly 7% on Thursday after the company reported better-than-expected fourth-quarter fiscal 2024 results. Its non-GAAP earnings were $1.22 per share, which came way above the Zacks Consensus Estimate of 95 cents as well as management’s guidance range of 90 cents-$1.00.However, the reported figure came 41% lower than the year-ago quarter’s non-GAAP earnings of $2.06 per share, mainly due to lower revenues.Revenues declined 15% year over year to $5.56 billion but came above the Zacks ...

Avnet, Inc. (NASDAQ:AVT) Q4 2024 Earnings Conference Call August 8, 2024 12:00 PM ET Company Participants Joe Burke - Vice President, Treasurer & Investor Relations Phil Gallagher - Chief Executive Officer Ken Jacobson - Chief Financial Officer Conference Call Participants William Stein - Truist Securities Matt Sheerin - Stifel Melissa Fairbanks - Raymond James Joe Quatrochi - Wells Fargo Ruplu Bhattacharya - Bank of America Operator Welcome to the Avnet Fourth Quarter Fiscal Year 2024 Earnings Call. I woul ...

For the quarter ended June 2024, Avnet (AVT) reported revenue of $5.56 billion, down 15.1% over the same period last year. EPS came in at $1.22, compared to $2.06 in the year-ago quarter.The reported revenue represents a surprise of +3.75% over the Zacks Consensus Estimate of $5.36 billion. With the consensus EPS estimate being $0.95, the EPS surprise was +28.42%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectatio ...

Avnet (AVT) came out with quarterly earnings of $1.22 per share, beating the Zacks Consensus Estimate of $0.95 per share. This compares to earnings of $2.06 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 28.42%. A quarter ago, it was expected that this distributor of electronic components would post earnings of $1.11 per share when it actually produced earnings of $1.10, delivering a surprise of -0.90%.Over the last four quar ...

[Executive Summary and Key Highlights](index=1&type=section&id=Executive%20Summary%20and%20Key%20Highlights) Summarizes Avnet's fiscal Q4 and full year 2024 financial performance, key metrics, and CEO commentary [Fiscal Fourth Quarter 2024 Highlights](index=1&type=section&id=Fiscal%20Fourth%20Quarter%202024%20Highlights) Avnet's Q4 FY24 sales decreased to **$5.6 billion**, with diluted EPS **$0.91** and adjusted EPS **$1.22**, generating **$274 million** operating cash flow - Fourth quarter sales were **$5.6 billion**, a **15.1% decrease** from **$6.6 billion** in the prior year quarter[3](index=3&type=chunk) - Diluted EPS was **$0.91** (vs. **$1.68** prior year) and adjusted diluted EPS was **$1.22** (vs. **$2.06** prior year)[3](index=3&type=chunk) - Operating income margin was **3.0%** (adjusted **3.5%**), down from **4.3%** in the prior year quarter[3](index=3&type=chunk) - Generated **$274 million** in cash flow from operations[3](index=3&type=chunk) - Returned **$107 million** to shareholders, comprising **$79 million** in share repurchases (**1.6%** of shares outstanding) and **$28 million** in dividends[3](index=3&type=chunk) [Fiscal Year 2024 Highlights](index=1&type=section&id=Fiscal%20Year%202024%20Highlights) Avnet's FY24 sales were **$23.8 billion**, diluted EPS **$5.43**, adjusted EPS **$5.34**, and **$690 million** operating cash flow - Sales were **$23.8 billion**, a **10.5% decrease** from **$26.5 billion** in the prior year[2](index=2&type=chunk) - Diluted earnings per share (EPS) of **$5.43**, compared with **$8.26** in the prior year, and adjusted diluted EPS of **$5.34**, compared with **$8.06** in the prior year[2](index=2&type=chunk) - Operating income margin of **3.6%** (adjusted **3.8%**), compared with **4.5%** in the prior year[2](index=2&type=chunk) - Electronic Components operating income margin was **4.3%** and Farnell operating income margin was **4.1%**[2](index=2&type=chunk) - Generated **$690 million** of cash flow from operations[4](index=4&type=chunk) - Returned **$277 million** to shareholders, including **$165 million** from share repurchases (**3.6%** of shares outstanding) and **$112 million** in dividends[4](index=4&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Phil Gallagher highlighted strong FY24 execution despite market challenges, exceeding Q4 guidance, and expressed confidence for FY25 - Avnet is satisfied with its fiscal 2024 performance, demonstrating strong execution despite challenging market conditions[1](index=1&type=chunk) - The team prioritized supporting partners, growing market share, controlling costs, and managing working capital to enhance operating cash flow[1](index=1&type=chunk) - Exceeded the upper range of fourth-quarter sales and earnings guidance[1](index=1&type=chunk) - Avnet is well-positioned for fiscal year 2025 with a robust team and strategy to capitalize on an eventual market recovery[1](index=1&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) Details Avnet's GAAP and non-GAAP financial results, covering segment and geographical performance [Fourth Quarter 2024 Financial Results (GAAP & Non-GAAP)](index=2&type=section&id=Fourth%20Quarter%202024%20Financial%20Results%20(GAAP%20%26%20Non-GAAP)) Avnet's Q4 FY24 GAAP sales decreased **15.1%** to **$5.56 billion**, diluted EPS **$0.91**; adjusted non-GAAP operating income **$193.4 million**, EPS **$1.22** Fourth Quarter Results (GAAP) | Metric | Jun – 24 | Jun – 23 | Change Y/Y | Mar – 24 | Change Q/Q | | :-------------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Sales | $5,563.0 | $6,554.6 | (15.1)% | $5,653.6 | (1.6)% | | Operating Income | $164.2 | $283.7 | (42.1)% | $190.2 | (13.7)% | | Operating Income Margin | 3.0% | 4.3% | (138)bps | 3.4% | (41)bps | | Diluted EPS | $0.91 | $1.68 | (45.8)% | $0.97 | (6.2)% | Fourth Quarter Results (Non-GAAP) | Metric | Jun – 24 | Jun – 23 | Change Y/Y | Mar – 24 | Change Q/Q | | :-------------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Adjusted Operating Income | $193.4 | $312.6 | (38.1)% | $202.7 | (4.6)% | | Adjusted Operating Income Margin | 3.5% | 4.8% | (129)bps | 3.6% | (11)bps | | Adjusted Diluted EPS | $1.22 | $2.06 | (40.8)% | $1.10 | 10.9% | [Fiscal Year 2024 GAAP Financial Results](index=5&type=section&id=Fiscal%20Year%202024%20GAAP%20Financial%20Results) Avnet's FY24 GAAP sales were **$23.76 billion** (down from FY23), operating income **$844.4 million**, and diluted EPS **$5.43** Fiscal Year 2024 GAAP Financial Results | Metric | FY 2024 | FY 2023 | | :------------------------------------------ | :----------- | :----------- | | Sales | $23,757,129 | $26,536,881 | | Cost of sales | 20,990,687 | 23,354,738 | | Gross profit | 2,766,442 | 3,182,143 | | Operating income | 844,367 | 1,186,800 | | Income before taxes | 632,263 | 982,876 | | Net income | $498,699 | $770,828 | | Diluted EPS | $5.43 | $8.26 | [Segment and Geographical Performance (Q4 & FY24)](index=2&type=section&id=Segment%20and%20Geographical%20Performance%20(Q4%20%26%20FY24)) Q4 FY24: EC sales declined **15.1%** to **$5.19 billion**, Farnell sales **15.8%** to **$375.2 million**, Americas and EMEA saw significant declines Q4 FY24 Sales by Segment | Segment | Jun – 24 | Jun – 23 | Change Y/Y | Mar – 24 | Change Q/Q | | :-------------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Electronic Components (EC) Sales | $5,187.8 | $6,109.2 | (15.1)% | $5,245.8 | (1.1)% | | Farnell Sales | $375.2 | $445.4 | (15.8)% | $407.8 | (8.0)% | Q4 FY24 Operating Income Margin by Segment | Segment | Jun – 24 | Jun – 23 | Change Y/Y | Mar – 24 | Change Q/Q | | :-------------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | | EC Operating Income Margin | 4.1% | 5.1% | (103)bps | 4.1% | (8)bps | | Farnell Operating Income Margin | 4.0% | 8.1% | (406)bps | 4.0% | 3 bps | Q4 FY24 Sales by Geographic Area | Region | Jun – 24 | Jun – 23 | Change Y/Y | Mar – 24 | Change Q/Q | | :-------------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Americas Sales | $1,353.8 | $1,732.7 | (21.9)% | $1,403.4 | (3.5)% | | EMEA Sales | $1,920.3 | $2,450.6 | (21.6)% | $2,053.1 | (6.5)% | | Asia Sales | $2,288.9 | $2,371.3 | (3.5)% | $2,197.1 | 4.2% | [Financial Outlook](index=2&type=section&id=Financial%20Outlook) Outlines Avnet's financial projections for Q1 FY25, including sales and diluted EPS guidance [First Quarter Fiscal 2025 Guidance](index=3&type=section&id=First%20Quarter%20Fiscal%202025%20Guidance) Avnet projects Q1 FY25 sales between **$5.25 billion** and **$5.55 billion**, diluted EPS **$0.80** to **$0.90**, anticipating regional sales shifts Q1 Fiscal 2025 Guidance | Metric | Guidance Range | Midpoint | | :-------------------------- | :--------------- | :------- | | Sales | $5.25B – $5.55B | $5.40B | | Diluted EPS | $0.80 – $0.90 | $0.85 | - Guidance implies sequential sales change of flat to down approximately **5%**, with anticipated declines in western regions and growth in Asia[6](index=6&type=chunk) - Guidance assumes interest expense similar to Q4 FY24 and an effective tax rate between **21%** and **25%**[6](index=6&type=chunk) Q1 Fiscal 2025 Average Currency Exchange Rates | Currency | Q1 Fiscal 2025 Guidance | Q4 Fiscal 2024 | Q1 Fiscal 2024 | | :-------------------------- | :---------------------- | :------------- | :------------- | | Euro to U.S. Dollar | $1.08 | $1.08 | $1.09 | | GBP to U.S. Dollar | $1.27 | $1.27 | $1.27 | [Company Information](index=3&type=section&id=Company%20Information) Provides an overview of Avnet, conference call details, and forward-looking statement disclosures [About Avnet](index=4&type=section&id=About%20Avnet) Avnet is a global technology distributor and solutions provider with over a century of experience, accelerating product lifecycle stages - Avnet is a leading global technology distributor and solutions provider, serving customers for over a century[12](index=12&type=chunk) - Supports customers across the entire product lifecycle, from initial concept to design, prototype, and production[12](index=12&type=chunk) - Its unique position in the technology value chain accelerates design and supply, enabling faster revenue realization for customers[12](index=12&type=chunk) [Conference Call and Webcast Details](index=3&type=section&id=Conference%20Call%20and%20Webcast%20Details) Avnet held a conference call and webcast on **August 8, 2024**, to discuss financial results, with replay and webcast details - Avnet hosted a conference call and webcast on **August 8, 2024**, at **9:00 a.m. PT / Noon ET**[9](index=9&type=chunk) - Live conference call details: **877-407-8112** (domestic) or **201-689-8840** (international)[9](index=9&type=chunk) - Conference call replay was available through **August 15, 2024**, using Conference ID: **13747493**[9](index=9&type=chunk) - Live and archived webcast is accessible via Avnet's Investor Relations web page at: https://ir.avnet.com[9](index=9&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This document contains forward-looking statements subject to various risks and uncertainties, with no obligation to update - This document contains forward-looking statements as defined by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934[10](index=10&type=chunk) - These statements are subject to numerous assumptions, risks, and uncertainties that could cause future results to differ materially[10](index=10&type=chunk) - Key risk factors include geopolitical events, competitive pressures, semiconductor industry down-cycles, supplier relationships, international operational risks, acquisitions, supply chain disruptions, cybersecurity, economic conditions, and regulatory changes[10](index=10&type=chunk) - The Company assumes no obligation to update any forward-looking statement to reflect subsequent events or circumstances, except as legally required[11](index=11&type=chunk) [Consolidated GAAP Financial Statements](index=5&type=section&id=Consolidated%20GAAP%20Financial%20Statements) Presents Avnet's consolidated GAAP financial statements: operations, balance sheets, and cash flows [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Avnet's GAAP statements show declines in Q4 and FY24 sales, gross profit, operating income, and net income; FY24 sales **$23.76 billion** Consolidated Statements of Operations (GAAP) | Metric | Q4 FY24 | Q4 FY23 | FY24 | FY23 | | :------------------------------------------ | :----------- | :----------- | :----------- | :----------- | | Sales | $5,562,977 | $6,554,608 | $23,757,129 | $26,536,881 | | Cost of sales | 4,920,097 | 5,736,586 | 20,990,687 | 23,354,738 | | Gross profit | 642,880 | 818,022 | 2,766,442 | 3,182,143 | | Selling, general and administrative expenses | 450,274 | 506,322 | 1,869,525 | 1,967,305 | | Restructuring, integration, and other expenses | 28,417 | 28,038 | 52,550 | 28,038 | | Operating income | 164,189 | 283,662 | 844,367 | 1,186,800 | | Income before taxes | 101,324 | 190,393 | 632,263 | 982,876 | | Income tax expense | 18,659 | 35,138 | 133,564 | 212,048 | | Net income | $82,665 | $155,255 | $498,699 | $770,828 | | Diluted EPS | $0.91 | $1.68 | $5.43 | $8.26 | Cash Dividends Paid Per Common Share | Period | Q4 FY24 | Q4 FY23 | FY24 | FY23 | | :-------------------------- | :------ | :------ | :----- | :----- | | Cash dividends paid per common share | $0.31 | $0.29 | $1.24 | $1.16 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 29, 2024, Avnet's total assets were **$12.21 billion**, liabilities **$7.28 billion**, shareholders' equity **$4.93 billion**, with increased short-term debt Condensed Consolidated Balance Sheets (GAAP) | Asset/Liability/Equity | June 29, 2024 | July 1, 2023 | | :----------------------------------- | :------------ | :----------- | | **ASSETS** | | | | Cash and cash equivalents | $310,941 | $288,230 | | Receivables | 4,391,187 | 4,763,788 | | Inventories | 5,468,730 | 5,465,031 | | Total current assets | 10,370,552 | 10,750,853 | | Property, plant and equipment, net | 568,169 | 441,557 | | Goodwill | 780,984 | 780,629 | | Total assets | $12,209,147 | $12,477,159 | | **LIABILITIES AND SHAREHOLDERS' EQUITY** | | | | Short-term debt | $492,711 | $70,636 | | Accounts payable | 3,345,510 | 3,373,820 | | Total current liabilities | 4,465,269 | 4,249,378 | | Long-term debt | 2,406,629 | 2,988,029 | | Total liabilities | 7,283,643 | 7,725,490 | | Shareholders' equity | 4,925,504 | 4,751,669 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Avnet generated **$689.98 million** in FY24 operating cash flow, a significant improvement from FY23, ending with **$310.94 million** cash Consolidated Statements of Cash Flows (GAAP) | Cash Flow Activity | FY 2024 | FY 2023 | | :--------------------------------------------------- | :---------- | :---------- | | Net income | $498,699 | $770,828 | | Net cash flows provided by (used for) operating activities | 689,984 | (713,703) | | Net cash flows (used for) provided by financing activities | (433,799) | 1,054,756 | | Net cash flows used for investing activities | (225,484) | (211,551) | | Effect of currency exchange rate changes on cash and cash equivalents | (7,990) | 5,035 | | Cash and cash equivalents at end of period | $310,941 | $288,230 | [Non-GAAP Financial Measures and Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) Explains Avnet's non-GAAP financial measures and provides detailed GAAP reconciliations for FY24-FY23 [Explanation of Non-GAAP Financial Measures](index=8&type=section&id=Explanation%20of%20Non-GAAP%20Financial%20Measures) Avnet uses non-GAAP measures like adjusted operating income and diluted EPS to clarify underlying performance by excluding specific non-recurring or non-cash items - Avnet discloses non-GAAP financial information including adjusted operating income, adjusted other income (expense), adjusted income before income taxes, adjusted income tax expense (benefit), and adjusted diluted earnings per share[20](index=20&type=chunk) - Sales in 'constant currency' are used to evaluate performance and understand underlying trends by adjusting for foreign currency exchange rate changes[21](index=21&type=chunk) - Adjusted operating income excludes restructuring, integration, other expenses, and amortization of acquired intangible assets, deemed outside normal operations or non-cash[22](index=22&type=chunk) - Adjusted net income and diluted EPS offer a more comparable measure of profitability by excluding specific items such as legal settlements, foreign currency gains/losses, and certain tax adjustments[23](index=23&type=chunk) - Non-GAAP analysis should complement and be used in conjunction with GAAP results[24](index=24&type=chunk) [Non-GAAP Reconciliations for Fiscal Year 2024 and Quarters](index=9&type=section&id=Non-GAAP%20Reconciliations%20for%20Fiscal%20Year%202024%20and%20Quarters) Details GAAP to non-GAAP reconciliations for FY24 and its quarters, adjusting for restructuring and amortization; FY24 GAAP diluted EPS **$5.43** adjusted to **$5.34** Non-GAAP Reconciliations (Fiscal Year 2024 and Quarters) | Metric | Fiscal Year 2024 | Q4 FY24 | Q3 FY24 | Q2 FY24 | Q1 FY24 | | :--------------------------------------------------- | :--------------- | :-------- | :-------- | :-------- | :-------- | | GAAP operating income | $844,367 | $164,189 | $190,151 | $236,257 | $253,769 | | Adjusted operating income | 900,047 | 193,434 | 202,710 | 242,204 | 261,698 | | GAAP income before income taxes | $632,263 | $101,324 | $101,948 | $153,558 | $275,432 | | Adjusted income before income taxes | 629,174 | 131,249 | 132,357 | 168,705 | 196,862 | | GAAP net income | $498,699 | $82,665 | $88,834 | $117,931 | $209,268 | | Adjusted net income | 489,979 | 111,555 | 100,592 | 128,215 | 149,616 | | GAAP diluted earnings per share | $5.43 | $0.91 | $0.97 | $1.28 | $2.25 | | Adjusted diluted EPS | 5.34 | 1.22 | 1.10 | 1.40 | 1.61 | [Non-GAAP Reconciliations for Fiscal Year 2023 and Quarters](index=11&type=section&id=Non-GAAP%20Reconciliations%20for%20Fiscal%20Year%202023%20and%20Quarters) Provides detailed GAAP to non-GAAP reconciliations for FY23 and its quarters; GAAP diluted EPS **$8.26** adjusted to **$8.06** Non-GAAP Reconciliations (Fiscal Year 2023 and Quarters) | Metric | Fiscal Year 2023 | Q4 FY23 | Q3 FY23 | Q2 FY23 | Q1 FY23 | | :--------------------------------------------------- | :--------------- | :-------- | :-------- | :-------- | :-------- | | GAAP operating income | $1,186,800 | $283,662 | $313,629 | $298,973 | $290,537 | | Adjusted operating income | 1,220,891 | 312,578 | 314,505 | 300,514 | 293,296 | | GAAP income before income taxes | $982,876 | $190,393 | $243,587 | $303,134 | $245,762 | | Adjusted income before income taxes | 979,931 | 243,978 | 244,463 | 242,970 | 248,521 | | GAAP income tax expense | $212,048 | $35,138 | $56,161 | $59,248 | $61,501 | | Adjusted income tax expense | 227,157 | 52,763 | 59,893 | 57,341 | 57,160 | | GAAP diluted earnings per share | $8.26 | $1.68 | $2.03 | $2.63 | $1.93 | | Adjusted diluted EPS | 8.06 | 2.06 | 2.00 | 2.00 | 2.00 | [Sales in Constant Currency](index=12&type=section&id=Sales%20in%20Constant%20Currency) Foreign currency fluctuations impacted Avnet's reported sales; Q4 FY24 constant currency sales declined **14.2%** YoY, Asia grew **4.8%** QoQ Sales Growth Rates (Reported vs. Constant Currency) | Metric | Q4 FY24 Reported YoY % Change | Q4 FY24 Constant Currency YoY % Change | Q4 FY24 Reported QoQ % Change | Q4 FY24 Constant Currency QoQ % Change | FY24 Reported YoY % Change | FY24 Constant Currency YoY % Change | | :----------------------------------- | :---------------------------- | :------------------------------------- | :---------------------------- | :------------------------------------- | :------------------------- | :------------------------------------ | | Avnet | (15.1)% | (14.2)% | (1.6)% | (1.0)% | (10.5)% | (10.9)% | | Americas | (21.9)% | (21.9)% | (3.5)% | (3.5)% | (13.1)% | (13.1)% | | EMEA | (21.6)% | (20.7)% | (6.5)% | (5.6)% | (9.0)% | (11.4)% | | Asia | (3.5)% | (1.9)% | 4.2% | 4.8% | (10.1)% | (9.0)% | | EC | (15.1)% | (14.1)% | (1.1)% | (0.5)% | (10.7)% | (11.0)% | | Farnell | (15.8)% | (15.4)% | (8.0)% | (7.5)% | (7.9)% | (9.3)% | [Historical Segment Financial Information](index=12&type=section&id=Historical%20Segment%20Financial%20Information) Presents historical sales and operating income data by segment and geographic area for FY24 and FY23, showing consistent FY24 declines Historical Sales by Segment and Geographic Area (FY24 & Quarters) | Metric | FY 2024 | Q4 FY24 | Q3 FY24 | Q2 FY24 | Q1 FY24 | | :-------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | **Sales:** | | | | | | | Electronic Components | $22,160.0 | $5,187.8 | $5,245.8 | $5,812.1 | $5,914.4 | | Farnell | 1,597.1 | 375.2 | 407.8 | 392.8 | 421.2 | | Avnet sales | $23,757.1 | $5,563.0 | $5,653.6 | $6,204.9 | $6,335.6 | | **Sales by geographic area:** | | | | | | | Americas | $5,919.2 | $1,353.8 | $1,403.4 | $1,588.5 | $1,573.5 | | EMEA | 8,395.0 | 1,920.3 | 2,053.1 | 2,113.6 | 2,308.0 | | Asia | 9,442.9 | 2,288.9 | 2,197.1 | 2,502.8 | 2,454.1 | Historical Operating Income by Segment (FY24 & Quarters) | Metric | FY 2024 | Q4 FY24 | Q3 FY24 | Q2 FY24 | Q1 FY24 | | :-------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | **Operating income:** | | | | | | | Electronic Components | $947.6 | $210.1 | $216.9 | $247.9 | $272.8 | | Farnell | 64.8 | 15.1 | 16.3 | 15.7 | 17.7 | | Avnet operating income | $844.4 | $164.2 | $190.2 | $236.3 | $253.8 | Historical Sales by Segment and Geographic Area (FY23 & Quarters) | Metric | FY 2023 | Q4 FY23 | Q3 FY23 | Q2 FY23 | Q1 FY23 | | :-------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | **Sales:** | | | | | | | Electronic Components | $24,802.6 | $6,109.2 | $6,059.6 | $6,309.5 | $6,324.2 | | Farnell | 1,734.3 | 445.4 | 455.0 | 408.0 | 425.9 | | Avnet sales | $26,536.9 | $6,554.6 | $6,514.6 | $6,717.5 | $6,750.1 | | **Sales by geographic area:** | | | | | | | Americas | $6,807.7 | $1,732.7 | $1,714.9 | $1,681.2 | $1,678.9 | | EMEA | 9,229.4 | 2,450.6 | 2,393.4 | 2,255.9 | 2,129.5 | | Asia | 10,499.8 | 2,371.3 | 2,406.3 | 2,780.4 | 2,941.7 | Historical Operating Income by Segment (FY23 & Quarters) | Metric | FY 2023 | Q4 FY23 | Q3 FY23 | Q2 FY23 | Q1 FY23 | | :-------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | **Operating income:** | | | | | | | Electronic Components | $1,179.6 | $310.4 | $305.2 | $296.7 | $267.3 | | Farnell | 165.5 | 36.1 | 40.9 | 36.9 | 51.6 | | Avnet operating income | $1,186.8 | $283.7 | $313.6 | $299.0 | $290.5 | [Guidance Reconciliation](index=13&type=section&id=Guidance%20Reconciliation) Avnet reconciles non-GAAP adjusted diluted EPS guidance to GAAP for Q1 FY25, with GAAP diluted EPS guided between **$0.63** and **$0.82** Q1 Fiscal 2025 Guidance Reconciliation (Non-GAAP to GAAP Diluted EPS) | Metric | Low End of Guidance Range | High End of Guidance Range | | :--------------------------------------------------- | :------------------------ | :------------------------- | | Adjusted diluted earnings per share guidance | $0.80 | $0.90 | | Restructuring, integration, and other expenses (net of tax) | (0.17) | (0.08) | | GAAP diluted earnings per share guidance | $0.63 | $0.82 |

Group 1 - Analysts project Avnet (AVT) will announce quarterly earnings of $0.95 per share, a decline of 53.9% year over year [1] - Revenues are expected to reach $5.36 billion, declining 18.2% from the same quarter last year [1] - There has been a downward revision of 1% in the consensus EPS estimate over the last 30 days, indicating a reconsideration of initial forecasts by covering analysts [1] Group 2 - Analysts estimate 'Sales- Farnell' to reach $368.32 million, reflecting a change of -17.3% from the prior-year quarter [2] - 'Sales- Electronic Components' is expected to come in at $5.08 billion, indicating a change of -16.8% from the prior-year quarter [2] - The consensus estimate for 'Operating Income (loss)- Farnell' stands at $15.67 million, down from $36.10 million in the same quarter last year [2] Group 3 - 'Operating Income (loss)- Electronic Components' is projected to reach $190.98 million, compared to $310.40 million in the same quarter last year [3] - Shares of Avnet have experienced a change of -2.9% in the past month, while the Zacks S&P 500 composite moved -6.7% [3] - With a Zacks Rank 4 (Sell), AVT is expected to underperform the overall market in the near future [3]

In a market like this, you should identify stocks most likely to underperform as a way of protecting your portfolio. Some stocks have had poor performances in the past years but then they have some very significant challenges that can take their value into a slump.Deep, top-line declines and restructuring deceleration have weighed down these same companies, and this usually consumes a lot of sales headwinds from various sectors. Realizing them early enough as an investor helps you make informed decisions an ...

Have you looked into how Avnet (AVT) performed internationally during the quarter ending March 2024? Considering the widespread global presence of this distributor of electronic components, examining the trends in international revenues is essential for assessing its financial resilience and prospects for growth.In the current era of a tightly interconnected global economy, the proficiency of a company to penetrate international markets significantly influences its financial health and trajectory of growth. ...