Avnet (AVT) Raymond James TMT and Consumer Conference summary

Recent performance and market outlook

• Asia Pacific showed sequential and year-on-year growth, with expectations for continued improvement in December; Europe remains the weakest region, especially in industrial and transportation verticals, while the Americas are stable with strong defense and aerospace sectors.

• Revenue was about $5.6 billion, with a significant mix shift to Asia, resulting in lower gross margins due to regional differences; operating margin faced pressure, but cash generation remained strong, and $100 million in shares were repurchased.

• End market dynamics have remained stable since late October, with industrial and transportation still soft, consumer steady, and defense/aero strong.

Supplier relationships, diversification, and pricing

• Supplier relationships and a diversified line card are seen as strengths, with no single supplier or vertical exceeding 10% of business.

• Asia Pacific outperformance is attributed to a strong local team and limited exposure to China, which accounts for about 10% of total business.

• Pricing for high-end technology products remains stable, with some suppliers even raising prices; commodity pricing fluctuates but has minimal margin impact.

Inventory management and channel dynamics

• Inventory levels are stable and of good quality, with ongoing efforts to reduce excess and unlock cash; inventory is concentrated in a few technologies and suppliers.

• The company acts as a shock absorber in the supply chain, adjusting inventory daily and working closely with both suppliers and customers to manage financial health.