Ingram and Scansource hit by coronavirus disruption

Both disties report a drop in revenue

Ingram Micro and Scansource have both reported sales decline as a result of COVID-19 disruption.

Ingram's sales fell nine per cent year on year to $10.5bn, while Scansource's revenue plummeted 22 per cent to $636.5m.

Privately-owned Ingram was however upbeat about its performance, claiming it still delivered "strong profitability" through an increase in higher margin deals.

Gross margin rose 1.4 per cent to $821.2m - equating to 7.83 per cent of sales.

Ingram said: "The company has benefited from its broad portfolio of products and solutions as a decrease in demand for certain services and advanced solutions offerings during the second quarter related to the COVID-19 pandemic, was offset by strength in technology solutions and ecommerce solutions demand across multiple categories and geographies as businesses and consumers shifted spending patterns in the work-from-home and shelter-in-place environment."

Scansource also blamed the pandemic for its fall in sales, with gross profit dropping 23 per cent year on year to $74.1m.

The performance of its Intelisys master agent business was a highlight in an otherwise difficult quarter, seeing revenue increase 15 per cent.

CEO Mike Baur said: "While the COVID-19 pandemic had a significant impact on our quarterly financial results, I am proud of how our teams have executed and the value we deliver to our suppliers and customers.

"We've taken the necessary actions to strengthen our balance sheet, improve our cost structure, and continue to drive investments in our higher-margin, VAR cloud platform and agency business."

Scansource still intends to sell its product business outside of the US, as announced in August last year.

The distie sold the product arm that operates in Mexico, Columbia, Chile and Peru to Intcomex in July.

"The company is actively working on sales opportunities for its divestitures in Europe and the UK," it added.

Baur added that Scansource is working with its vendor partners to stimulate growth in the channel.

"We've got every one of our key suppliers focused on trying to find ways to stimulate growth in the channel and so there are more programmes, more initiatives underway," he said.

Scansources share price fell by almost 12 per cent after it published its results.

Both disties were reporting on quarters that finished at the end of June.