Tech Data has started its FY2019 with a 22 per cent year on year hike in revenues to $8.5bn for the first quarter ending 30 April. Meanwhile, non-GAAP operating income grew by one per cent to $124.1m (€106.23m).
Here we round up five key takeaways from the Florida-based distributor's Q1 figures.
Foreign currencies boosted revenues
Tech Data attributed a 24 per cent sales boom in Q1 to changes in foreign currency exchange rates.
However, even in constant currency terms, sales were up double-digits at 13 per cent.
In his last earnings call as CEO, before handing the reins to his successor Richard Hume (pictured) on 1 June, Robert Dutkowsky also highlighted a higher than expected demand for PCs, server and storage sales.
"I think the demand was stronger than what we anticipated. And I think you've heard those comments through the reports of not only our competitors, but our vendor partners and our publicly traded customers that have reported their results."
"Each of those spoke to strong demand." he said on an earnings call transcribed by Seeking Alpha.
Profits saw only a modest gain
Non-GAAP operating profits saw a year-on-year rise of just one per cent.
CFO Chuck Dannewitz claimed the firm's modest Q1 profit numbers were down to expenditure obligations in relation to its investments in several markets.
"The decline… is due to a challenging operating environment in certain countries along with investments we were making in the infrastructure necessary to grow and operate our business in the region.
"Examples of our investments in the Asia-Pac region include extending our global line card, building out our e-commerce infrastructure and launching our cloud marketplace."
Vendor programme overhauls still causing upset
In its FY2018 Q4 results, Tech Data flagged that several of its vendors had changed their partner programmes, resulting in lower margins for the distributor.
When asked by an analyst for an update on the situation, Dutkowsky said: "When vendors tell us that they're going to change programmes, we instantly begin to renegotiate those terms with them, and we had some successes in Q1 to change the dynamics of those programmes," he said.
"But at the same time we aggressively manage the sales, general and administrative costs attached to a particular vendor that may deliver less profit, and we did that very effectively in the quarter. And then the third lever that we can pull is to try to overachieve on sales and we did that in the quarter."
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