Strategy delivering for Tech Data

A strategy to focus on growth markets and keep an eye on costs has been heralded as delivering the right sort of results for Tech Data

Tech Data is patting itself on the back after its fourth quarter numbers gave it the chance to talk of the success of its strategy of going after growth markets.

The distributor has issued its fourth quarter numbers that revealed its net sales improved by 2% year-on-year to $7.5bn, with a flat performance in Europe at $4.8m (64% of worldwide sales).

Operating income came in flat at $116.8m, with Europe contributing $81.5m. On the net income front things improved in Q4 from $74.9m in the previous year to $80.9m.

The numbers for the full year showed slight decreases in sales and income but it was clear that currency headwinds had taken a toll on the US distribution giant and if those were taken into consideration things had not been too bad.

The product mix has stayed largely the same year-on-year in Q4 but there has been a slight growth on the mobility side. Hardware, the broadline business, continued to dominate at 46% of net sales. Data center was 22%, software 18% and mobility at 11%. The remaining 3% was accounted for by the consumer business.

Some of the areas where the distributor had looked to get involved with growth markets in the last year include 3D printing, retail and increasing the support it provides its key vendors, including HP, Dell, Apple and Microsoft.

The distributor has also clearly become a major partner for Apple with the vendor representing 24% of net sales. HP accounted for just 10% in Q4.

Even though its great rival Ingram Micro has recently revealed it is being sold to a Chinese firm for $6bn,  Robert Dutkowsky, Tech Data's CEO, very much stuck to commenting on his own business.

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

“Tech Data’s strong fiscal 2016 performance validates our strategy and firmly positions us to leverage new opportunities in the evolving IT marketplace on behalf of our customers, vendor partners, shareholders, and employees," he added.

Looking ahead the channel player expects its fiscal Q1, ending 30 April, it will bring in worldwide net sales in the range of $5.85bn to $6.05bn.



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