Core Viewpoint - Acuity Brands reported strong first-quarter fiscal 2026 adjusted earnings, surpassing analyst expectations, but experienced a significant drop in share price despite solid revenue growth and margin improvement [1]. Group 1: Financial Performance - Adjusted earnings for the quarter ended November 30, 2025, were $4.69 per share, exceeding the consensus estimate of $4.58 [1]. - Revenue increased by 20.2% year over year to $1.14 billion, aligning with analyst expectations [1]. - Adjusted operating profit rose by 23.7% to $196.3 million, with adjusted operating margin expanding by 50 basis points to 17.2% [2]. Group 2: Segment Performance - The Acuity Intelligent Spaces segment led revenue growth, with sales surging by 250.2% to $257.4 million [2]. - The Acuity Brands Lighting segment saw a modest sales increase of 1% to $895.1 million [2]. - Adjusted operating margin in the AIS business improved by 100 basis points to 22.0%, while the lighting segment's margin increased by 60 basis points to 17.9% [3]. Group 3: Cash Flow and Share Repurchase - The company generated $140.8 million in operating cash flow during the quarter [2]. - Approximately 77,000 shares were repurchased for about $28 million [2]. Group 4: Debt Management - Acuity Brands reduced debt by repaying $100 million of term-loan borrowings during the quarter [3].

Core Insights - Acuity Brands, Inc. reported strong financial performance in its first-quarter fiscal 2026, with earnings per share (EPS) of $4.69, surpassing expectations of $4.45 [1][6] Financial Performance - The company generated revenue of approximately $1.1 billion, slightly below the estimated $1.144 billion, but achieved a 20% increase in net sales compared to the previous year [2][6] - Operating profit rose to $160 million, a 20% increase, while adjusted operating profit grew by 24% to reach $196 million, reflecting effective cost controls and productivity improvements [3][6] Market Valuation - Acuity's price-to-earnings (P/E) ratio is approximately 28.61, with a price-to-sales ratio of about 2.61, indicating market confidence in its earnings and revenue potential [4] - The enterprise value to sales ratio is around 2.71, and the enterprise value to operating cash flow ratio is approximately 19.61 [4] Financial Health - The company's debt-to-equity ratio is approximately 0.33, suggesting a moderate level of debt relative to equity [5] - A current ratio of about 1.95 indicates Acuity's ability to cover its short-term liabilities with its short-term assets, highlighting a solid financial position [5]

Acuity (AYI) reported $1.14 billion in revenue for the quarter ended November 2025, representing a year-over-year increase of 20.2%. EPS of $4.69 for the same period compares to $3.97 a year ago.The reported revenue represents a surprise of +0.53% over the Zacks Consensus Estimate of $1.14 billion. With the consensus EPS estimate being $4.52, the company has not delivered EPS surprise.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to ...

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Financial Data and Key Metrics Changes - The company reported net sales of $1.1 billion, which is $192 million, or 20% higher than the previous year [13] - Adjusted operating profit increased by $38 million, or 24%, to $196 million, with an adjusted operating profit margin expanding to 17.2%, an increase of 50 basis points from the prior year [13] - Adjusted diluted earnings per share rose by $0.72, or 18%, to $4.69 [13] Business Line Data and Key Metrics Changes - Acuity Brands Lighting (ABL) achieved sales of $895 million, a slight increase of $9 million, or 1%, primarily due to growth in the independent sales network [14] - Adjusted operating profit for ABL increased by $6 million to $160 million, with an adjusted operating profit margin of 17.9%, up 60 basis points compared to the prior year [14] - Acuity Intelligence Spaces (AIS) reported sales of $257 million, an increase of $184 million, benefiting from three months of QSC sales [15] - AIS adjusted operating profit was $57 million, with an adjusted operating profit margin of 22%, up 100 basis points compared to the prior year [16] Market Data and Key Metrics Changes - The lighting market remains tepid, with the company noting that the market appears to be waiting for clarity around interest rates, inflation, and policy [11] - The AIS business is recognized for its strong product portfolio, with several awards received during the quarter [10][11] Company Strategy and Development Direction - The company is focused on increasing product vitality, elevating service levels, and using technology to improve and differentiate products [5] - The strategy includes cross-selling opportunities between ABL and AIS, particularly in fueling and office markets [27] - The company aims to control what it can and is confident in the long-term performance of both lighting and spaces businesses [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive margins at ABL, targeting 50-100 basis points of operating profit margin improvement per year [21] - The company is optimistic about the long-term opportunities in both ABL and AIS, with disruptive technologies taking market share [59] - Management acknowledged the challenges in the lighting market but noted that they are holding or accelerating their market position [46] Other Important Information - The company generated $141 million in cash flow from operations, which was $9 million higher than the same period in the previous year [16] - The company repurchased over 77,000 shares at an average price of around $357 and repaid $100 million of its term loan during the quarter [17] Q&A Session Summary Question: Gross margin seasonality and future expectations - Management acknowledged the impact of tariffs on gross margins and expressed confidence in the ability to drive margins at ABL over the long term [20][21] Question: Operating expenses and productivity investments - Management indicated that the muted step-down in operating expenses from Q4 to Q1 was due to prior cost-cutting measures [22] Question: Cross-sell opportunities and product portfolio gaps - Management emphasized that cross-sell opportunities should be driven by customer demand rather than aggressive pushing of products [27] Question: Backlog normalization and future growth - Management confirmed that historical seasonality would be skewed due to elevated backlog levels, with expectations of more normal seasonality in Q2 [32] Question: Tariffs and potential changes in pricing - Management discussed the uncertainty surrounding tariffs and the potential implications for pricing strategies [51][52]

Acuity (NYSE:AYI) Q1 2026 Earnings Call January 08, 2026 08:00 AM ET Company ParticipantsKaren Holcom - SVP and CFOCharlotte McLaughlin - VP of Investor RelationsJeffrey Sprague - Founder and Managing PartnerMichael Francis - Equity Research AssociateNeil Ashe - President and CEOConference Call ParticipantsChristopher Glynn - Equity AnalystTimothy Wojs - Senior Research AnalystChris Snyder - Equity Research AnalystOperatorGood morning and welcome to the Acuity Fiscal 2026 First Quarter Earnings Call. At thi ...

Financial Data and Key Metrics Changes - Acuity reported net sales of $1.1 billion, which is $192 million, or 20% higher than the previous year [12] - Adjusted operating profit increased to $196 million, up $38 million, or 24% from last year [12] - Adjusted operating profit margin expanded to 17.2%, an increase of 50 basis points from the prior year [12] - Adjusted diluted earnings per share rose to $4.69, an increase of $0.72, or 18% over the prior year [12] Business Line Data and Key Metrics Changes - Acuity Brands Lighting (ABL) achieved sales of $895 million, an increase of $9 million, or 1% compared to the prior year, primarily due to growth in the independent sales network [13] - Adjusted operating profit for ABL increased by $6 million to $160 million, with an adjusted operating profit margin of 17.9%, up 60 basis points from the prior year [13] - Acuity Intelligence Spaces (AIS) reported sales of $257 million, an increase of $184 million, benefiting from the inclusion of three months of QSC sales [14] - AIS adjusted operating profit was $57 million, with an adjusted operating profit margin of 22%, up 100 basis points compared to the prior year [14] Market Data and Key Metrics Changes - The lighting market remains tepid, with the company noting that the market appears to be waiting for clarity around interest rates, inflation, and policy [10] - Despite the challenging market, both ABL and AIS are performing well, with AIS being strategically differentiated and positioned for value creation [10] Company Strategy and Development Direction - The company is focused on increasing product vitality, elevating service levels, and using technology to improve and differentiate products [4] - Acuity is expanding its offerings in the Refuel segment by incorporating AIS products, including Atrius software and Distech controls, to create value throughout locations [6] - The company aims to drive productivity and enhance customer outcomes through data interoperability in its Acuity Intelligence Spaces [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term performance of both the lighting and spaces businesses, despite current market challenges [10] - The company is targeting 50-100 basis points of operating profit margin improvement per year, indicating a focus on long-term margin growth [19] - Management acknowledged that while the lighting market is currently tepid, they are optimistic about future growth opportunities [45] Other Important Information - The company generated $141 million of cash flow from operations, which was $9 million higher than the same period in Fiscal 2025 [14] - Acuity allocated $28 million to repurchase over 77,000 shares at an average price of around $357 during the quarter [14] - The company repaid another $100 million of its term loan during the quarter, totaling $300 million repaid of the $600 million debt used to finance the QSC acquisition [15] Q&A Session Summary Question: Gross margin seasonality and future expectations - Management acknowledged that recent gross margin declines were influenced by tariffs and productivity efforts, expressing confidence in the ability to drive margins at ABL in the long term [18][19] Question: ABL operating expenses and productivity investments - Management indicated that the muted step-down in operating expenses from Q4 to Q1 was due to prior cost-cutting measures and ongoing productivity improvements [20] Question: Cross-sell opportunities between ABL and AIS - Management emphasized that cross-sell opportunities should be driven by customer demand rather than aggressive pushing, indicating a focus on durable customer relationships [26] Question: Backlog normalization and future growth - Management confirmed that the elevated backlog has positively impacted recent performance but indicated that future growth may normalize as backlog levels return to historical norms [29] Question: Tariffs and potential impacts on pricing - Management expressed uncertainty about the implications of potential tariff changes but indicated that any benefits would likely not be passed down the supply chain [49] Question: Market penetration goals and competitive landscape - Management expressed satisfaction with their market entry strategies and emphasized the importance of building a robust business model for new verticals [36]

Company Overview - Acuity Brands Lighting (ABL) net sales for Q1'26 were $669 million[23], while Acuity Intelligent Spaces (AIS) net sales for Q1'26 were $948 million[28] - ABL Adjusted Operating Profit Margin for Q1'26 was 18.5%[23], and AIS Adjusted Operating Profit Margin for Q1'26 was 21.7%[28] Financial Performance - The company's net sales have grown from $1.7 billion in FY09 to $4.5 billion in LTM Q1'26[34] - Adjusted Operating Profit has increased from $186 million in FY10 to $806 million in LTM Q1'26[35] - Adjusted Diluted Earnings Per Share have risen from $2.42 in FY10 to $18.73 in LTM Q1'26[37] - Free Cash Flow generation has increased from $139 million in FY10 to $534 million in LTM Q1'26[38] Capital Allocation - The company has repurchased approximately $1.5 billion of its shares outstanding since the beginning of the 4th quarter of 2020, representing about 25% of the then-outstanding shares[31] Non-GAAP Measures - The company uses non-GAAP financial measures such as adjusted operating profit, adjusted net income, and free cash flow to enhance the understanding of its financial performance and prospects[4] - These non-GAAP measures are used for internal reviews of performance, baseline comparative operational analysis, and decision-making[5]

Press Release Exhibit 99.1 Investor Contact: Charlotte McLaughlin Vice President, Investor Relations (404) 853-1456 investorrelations@acuityinc.com Media Contact: April Appling Senior Vice President, Corporate Marketing and Communications corporatecommunications@acuityinc.com Acuity Reports Fiscal 2026 First-Quarter Results Strong Performance Delivers Sales Growth, Margin Expansion and EPS Improvement ATLANTA, January 8, 2026 - Acuity Inc. (NYSE: AYI), ("Acuity"), a market-leading industrial technology comp ...

Financial Performance - For the first quarter of fiscal 2026, net sales increased by $192.1 million, or 20.2%, to $1.1 billion compared to $951.6 million in the prior-year period, primarily driven by the acquisition of QSC and increased sales in the ABL segment [114]. - Gross profit for the first quarter of fiscal 2026 rose by $104.5 million, or 23.3%, to $553.8 million, with a gross profit margin increase of 120 basis points to 48.4% [115]. - Operating profit for the first quarter of fiscal 2026 was $160.4 million, representing 14.0% of net sales, an increase of $27.1 million, or 20.3%, compared to the prior-year period [117]. - Net income for the first quarter of fiscal 2026 increased by $13.8 million, or 12.9%, to $120.5 million, with diluted earnings per share rising by $0.47, or 14.0%, to $3.82 [122]. Cash Flow and Debt - Cash generated from operating activities for the three months ended November 30, 2025, was $140.8 million, an increase of $8.6 million from $132.2 million in the prior-year period [100]. - As of November 30, 2025, the company's cash position was $376.1 million, a decrease of $46.4 million from August 31, 2025, due to voluntary repayment of $100.0 million on the Term Loan Facility [99]. - The outstanding debt balance as of November 30, 2025, was $797.0 million, with compliance maintained on all covenants under financing arrangements [102]. - The company has additional borrowing capacity of $593.0 million under the Credit Agreement as of November 30, 2025, bringing total cash and borrowing capacity to $969.1 million [104]. Investment and Dividends - The company invested $26.0 million in property, plant, and equipment during the three months ended November 30, 2025, compared to $18.9 million in the prior-year period [106]. - Dividends paid during the three months ended November 30, 2025, totaled $5.3 million, compared to $4.5 million in the prior-year period [110]. Segment Performance - ABL net sales for Q1 fiscal 2026 were $895.1 million, a 1.0% increase from $886.0 million in Q1 fiscal 2025 [123]. - ABL gross profit decreased to $400.6 million (44.8% of net sales) from $406.4 million (45.9% of net sales), a decline of $5.8 million [124]. - ABL operating profit increased to $149.0 million (16.6% of net sales) from $143.3 million (16.2% of net sales), an increase of $5.7 million [125]. - AIS net sales surged to $257.4 million, a 250.2% increase compared to $73.5 million in the prior-year period, primarily due to the acquisition of QSC [126]. - AIS gross profit rose to $153.2 million (59.5% of net sales) from $42.9 million (58.4% of net sales), an increase of $110.3 million [127]. - AIS operating profit increased to $37.0 million (14.4% of net sales) from $10.8 million (14.7% of net sales), an increase of $26.2 million [128]. - ABL's increase in net sales was driven by higher sales in the independent sales network and corporate accounts channels, partially offset by lower sales in the direct sales network [123]. - The increase in AIS gross profit was attributed to the acquisition of QSC and higher sales of Distech products [127]. Accounting Estimates - Management continues to evaluate critical accounting estimates related to revenue recognition and business combinations, which may impact financial results [129]. - There have been no material changes in critical accounting estimates during the current period [130].