Avnet Surpasses Sales and EPS Guidance with Strong Regional Growth and Inventories at Multi-Year Lows
Sales Momentum Led by Asia and Farnell Drives Upside to Guidance
Avnet’s latest quarterly results reflect both top- and bottom-line momentum, with the company exceeding the high end of its sales and adjusted EPS guidance. Sales for the fiscal second quarter reached $6.32 billion, up 11.6% from the prior year and 7.1% sequentially. Asia continued to be the primary engine, achieving its sixth consecutive quarter of year-over-year growth and setting a record at $3.17 billion for the region. Farnell, Avnet’s global distributor of electronic components and industrial products, saw a robust 23.6% annual sales increase, marking the third straight quarter of year-over-year growth.
CEO Phil Gallagher highlighted that margins are following suit: “Our adjusted operating income grew two times faster than sales, demonstrating the expected leverage in our business model.” Both the Electronic Components (EC) and Farnell divisions saw sequential improvement in operating margins.
| Metric | Q2 FY26 | Q2 FY25 | Change Y/Y | Q1 FY26 | Change Q/Q |
|---|---|---|---|---|---|
| Sales ($B) | 6.32 | 5.66 | 11.6% | 5.90 | 7.1% |
| Adjusted Operating Income ($M) | 171.7 | 159.5 | 7.7% | 150.7 | 14.0% |
| Adjusted Operating Margin | 2.7% | 2.8% | -10 bps | 2.6% | +17 bps |
| Adjusted Diluted EPS | 1.05 | 0.87 | 20.7% | 0.84 | 25.0% |
| Cash Flow from Operations ($M) | 208 | N/A | N/A | N/A | N/A |
Inventory Optimization and Operating Cash Flow Highlight Strong Execution
Operational discipline is evident: Avnet reduced inventory by $126 million and brought days of inventory down to 86, a level not seen in years. The EC business dropped below 80 days. As a result, cash flow from operations soared to $208 million, strengthening the balance sheet and creating greater flexibility for capital allocation. The company also returned $28 million to shareholders in dividends during the quarter.
| Inventory Metrics | Q2 FY26 | Change |
|---|---|---|
| Total Inventory ($M) | 5,294.5 | -126.0 |
| Days of Inventory | 86 | -N/A |
| EC Days of Inventory | <80 | -N/A |
Regional and Segment Performance Remain Equally Robust
Growth was broad-based: the Americas returned to year-over-year growth (+4.9%), EMEA resumed expansion (+8.3%), and Asia delivered the outsized gains (+16.9%) that pushed overall results ahead of expectations. On the segment level, EC’s strong 10.8% sales growth and Farnell’s 23.6% jump help emphasize the mix shift toward higher-margin business.
| Region/Segment | Sales ($M) | Y/Y Change | Operating Margin | Y/Y Bps Change |
|---|---|---|---|---|
| Asia | 3,169.7 | +16.9% | n/a | n/a |
| EMEA | 1,714.0 | +8.3% | n/a | n/a |
| Americas | 1,435.3 | +4.9% | n/a | n/a |
| EC Segment | 5,891.9 | +10.8% | 3.2% | -25 bps |
| Farnell | 427.1 | +23.6% | 4.7% | +367 bps |
Improving Margins and Outlook Signal Operational Leverage
Sequentially, adjusted operating income rose 14%, which was nearly double the pace of sales growth. Adjusted diluted EPS grew 25% over last quarter. Margins in the Farnell segment accelerated sharply to 4.7% (from 1.0% a year ago and 4.3% in Q1 FY26), while EC margins moved up to 3.2% from 2.9% in Q1.
The company set guidance for Q3 at $6.20-$6.50 billion in sales and adjusted diluted EPS of $1.20-$1.30, with a midpoint well above typical seasonal trends. Executives called out the expectation for continued margin improvement, particularly as Asia’s seasonal slowdown around the Lunar New Year is expected to be less severe this year.
Key Takeaways for Investors: Above-Trend Guidance and Strong Execution
Avnet enters the third quarter with momentum at its back—driven by ongoing demand in Asia, strong operational controls, and a rising margin profile. The company’s ability to translate sales growth into even larger gains in operating income and EPS demonstrates operational leverage worth watching as the year progresses.
For investors, the lowered inventory levels, robust cash flow, and positive margin trends suggest a business that’s well prepared for any uncertain macro conditions ahead. Executives will provide further insights during today’s earnings call. Those tracking Avnet may want to keep an eye on consistent sales outperformance in Asia and Farnell, as well as management’s ability to sustain margin improvements through Q3 and beyond.
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