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, while Europe remains the weakest region, especially in industrial and transportation verticals, and the Americas are stable with strong defense and aerospace sectors.

• Revenue was about $5.6 billion, with a significant mix shift toward Asia, resulting in lower gross margins due to regional differences.

• End market dynamics have remained stable since late October, with industrial and transportation still soft, but defense and aerospace continuing to grow.

• Supplier relationships and a diversified line card have contributed to outperformance in APAC, with limited exposure to China and AI markets.

Pricing, inventory, and supply chain management

• Pricing for higher-end technology products remains stable, with some suppliers even raising prices; commodity pricing fluctuations have minimal impact on margins.

• Inventory levels are being actively managed, with a focus on quality and targeted reductions, especially in areas of excess, while maintaining flexibility to support future growth.

• The company acts as a shock absorber in the supply chain, balancing supplier and customer needs, and expects to generate cash as inventory is brought down.

Tariffs and global trade

• Tariffs are not seen as a major risk; processes and free trade zones are in place to adapt as needed, and sourcing strategies are adjusted to minimize impact.

• Customers are not significantly accelerating purchases to avoid tariffs, and the company does not anticipate a major impact from potential new tariffs.