UK delivers 'solid growth' in Tech Data's Q1
But European datacentre sales slow for distributor
The UK was one of several "pockets of strength" for Tech Data in Q1, the distributor said as it unveiled its results for the quarter.
European net sales increased one per cent year over year on a constant-currency basis, coming in at $3.6bn (£2.5bn). Operating income for the region was $24.9m, 0.7 per cent of net sales, compared with $23.4m for the previous year's quarter.
Global net sales came in at $5.96bn, a one per cent increase on the same quarter in 2015. Non-GAAP operating income for the first quarter saw 15 per cent growth, from 2015's $50.2m to $57.6m in 2016.
Speaking on an earnings call transcribed by Seeking Alpha, Chuck Dannewitz, CFO at Tech Data, said European growth was maintained through a solid performance in the UK, Germany and Switzerland.
"Despite facing a slightly softer demand environment, most notably in the mobility market, our European team capitalised on pockets of strength, taking share in select product categories and geographies. At a country level, the UK, Germany and Switzerland delivered solid growth during Q1," he said.
The CFO said the firm's European operations posted sales growth in broadline products, including notebooks, ultrabooks and tablet PCs as well as software, consumer electronics and security products. However, sales in datacentre and mobility offerings declined.
"We have had a really good run in the datacentre, in both geographies, in the Americas and in Europe, and clearly the European datacentre slowed down in the quarter," said Tech Data's CEO Bob Dutkowsky.
"I think to a certain extent, the rest of the datacentre may be in a bit of a transition from legacy technologies to newer technologies, and those transitions often cause pauses to happen and those pauses often result in upswings in later quarters. And that could be the case in the datacentre, inside our footprint, as the second half of the year unfolds."
Tech Data's business outlook for the second quarter, ending 31 July, forecasts net sales to be in the range of $6.55bn to $6.75bn. The forecast expects a year-over-year constant currency net sales growth of flat to low-single-digit growth.