Avnet Inc (AVT)
Profitability ratios
Return on sales
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 10.74% | 11.64% | 11.99% | 12.20% | 11.47% |
| Operating profit margin | 2.80% | 3.78% | 4.47% | 3.86% | 1.44% |
| Pretax margin | 1.13% | 2.66% | 3.70% | 3.43% | 0.89% |
| Net profit margin | 1.08% | 2.10% | 2.90% | 2.85% | 0.99% |
The analysis of Avnet Inc.'s profitability ratios over the period from June 2021 to June 2025 reveals several noteworthy trends.
The gross profit margin experienced slight fluctuations, beginning at 11.47% in June 2021, increasing to 12.20% in June 2022, then marginally declining to 11.99% in June 2023. Subsequently, it decreased further to 11.64% in June 2024 and continued to decline to 10.74% in June 2025. This pattern indicates a modest compression of gross profit margin over the period, suggesting potential pressures on gross profitability, possibly due to increasing cost of goods sold or competitive pricing strategies.
The operating profit margin showed a more pronounced improvement from 1.44% in June 2021 to a peak of 4.47% in June 2023. This upward trend reflects enhanced operational efficiency or improved cost control measures during this period. However, the margin declined to 3.78% in June 2024 and further diminished to 2.80% in June 2025, indicating a reduction in operating profitability and possibly reflecting increased operating expenses or competitive market challenges impacting operational leverage.
The pretax profit margin followed a similar pattern, rising from 0.89% in June 2021 to 3.70% in June 2023. After reaching this peak, it declined to 2.66% in June 2024 and sharply dropped to 1.13% in June 2025, signaling a compression in pre-tax profitability that may be attributable to higher non-operating expenses, interest costs, or other factors affecting pre-tax earnings.
The net profit margin started at 0.99% in June 2021, increased substantially to 2.85% in June 2022, and stabilized near that level with 2.90% in June 2023. Post-2023, the margin declined to 2.10% in June 2024 and further contracted to 1.08% in June 2025. The net margin trend reflects a narrowing of the company's bottom-line profitability, potentially driven by increased income tax expenses, interest expenses, or other non-operating factors reducing net income relative to revenue.
In summary, Avnet Inc.'s profitability ratios initially improved from 2021 through 2023, indicating enhanced operational efficiency and profitability. However, from mid-2023 onward, there is a clear downward trend across all margins, suggesting increasing cost pressures, competitive challenges, or other factors adversely impacting overall profitability.
Return on investment
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.14% | 7.35% | 9.51% | 9.04% | 3.15% |
| Return on assets (ROA) | 1.98% | 4.08% | 6.18% | 6.66% | 2.16% |
| Return on total capital | 9.92% | 18.67% | 25.96% | 22.27% | 6.42% |
| Return on equity (ROE) | 4.79% | 10.12% | 16.22% | 16.51% | 4.73% |
The analysis of Avnet Inc.’s profitability ratios over the fiscal years ending June 30, 2021, through June 30, 2025, reveals several noteworthy trends.
The Operating Return on Assets (Operating ROA) demonstrated substantial growth from 3.15% in 2021 to a peak of 9.51% in 2023, indicating an improved ability to generate operating income relative to total assets. However, this measure declined slightly to 7.35% in 2024 and further decreased to 5.14% in 2025, suggesting a reduction in operating efficiency or increased operating costs that impacted overall profitability.
The Return on Assets (ROA), which accounts for net income relative to total assets, followed a similar upward trajectory from 2.16% in 2021 to 6.66% in 2022 and maintained a high level of 6.18% in 2023. Beyond this peak, the ratio experienced a decline, falling to 4.08% in 2024 and further to 1.98% in 2025, reflecting diminished net profitability in the most recent fiscal year. This decline may be attributable to wider margin compression, increased expenses, or other factors affecting net income.
The Return on Total Capital showed a significant increase from 6.42% in 2021 to a peak of 25.96% in 2023. Although it decreased to 18.67% in 2024 and further to 9.92% in 2025, the ratios remained above pre-2022 levels, indicating a considerable initial improvement in the efficiency of capital utilization. The downward trend in recent years suggests challenges in sustaining high returns on capital, possibly due to changes in capital structure or profitability pressures.
Similarly, Return on Equity (ROE) experienced notable growth from 4.73% in 2021 to 16.51% in 2022 and remained relatively stable at 16.22% in 2023. However, it declined to 10.12% in 2024 and further to 4.79% in 2025, approaching levels close to those observed in 2021. This pattern highlights a significant erosion in shareholders’ returns in recent periods, indicating potential pressures on net income or increased equity bases that dilute overall profitability.
Overall, the profitability ratios exhibit a pattern characterized by rapid improvement culminating in 2022–2023, followed by a decline in subsequent years. The recent trends suggest a weakening of profit-generating efficiency, which may necessitate further analysis to identify underlying causes such as market conditions, cost structures, or strategic shifts impacting Avnet Inc.’s profitability metrics.