Tech Data blows Q4 sales target out of water

European and Americas sales both up by 11 per cent on like-for-like basis

Tech Data's Q4 sales tally came in $250m (£177.5m) higher than it had anticipated on the back of unexpectedly strong growth in Europe and the Americas.

Revenues for the distributor's final quarter ending 31 January 2016 totalled $7.5bn, well above the range of $7.05bn to $7.25bn it had predicted at the time of its Q3 results.

That is an increase of two per cent year on year or 11 per cent allowing for currency headwinds and exited operations.

The NASDAQ-listed distributor's profitability also improved, with net income powering up from $80.2m to $96.1m year on year.

Breaking it down by geography, Tech Data comfortably beat its growth estimates in both the Americas and Europe, which is by far its largest business, generating 64 per cent of sales.

Although flat in dollar terms, European sales hiked 11 per cent in constant currencies to $4.8bn. Tech Data's operating profit margin in the region also rose from 1.6 to 1.7 per cent.

Net sales for the Americas rose 11 per cent stripping out exited operations.

Tech Data had previously predicted sales growth in the mid-single digits in both regions, on a constant currency basis.

Tech Data's European performance contrasts with that of arch rival Ingram, which saw European sales fall by 19 per cent year on year to $3.38bn. Its Q4 numbers were artificially deflated by a number of one-off anomalies, including the period being shorter than its previous Q4.

Tech Data CEO Robert Dutkowsky said the Q4 results marked a "strong finish to an excellent fiscal year".

"Building on the positive momentum of the first nine months, our teams in both regions executed well in Q4, delivering higher than expected sales and record fourth-quarter non-GAAP earnings per share," he said.

"At the beginning of the fiscal year, we set out to optimise our operations and leverage our infrastructure by aligning our resources with more strategic, higher-growth areas. This focus enabled us to achieve all our aspirational financial objectives in fiscal 2016."