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Acuity Brands, Inc. (AYI) reported mixed results in the first quarter of fiscal 2025 (ended Nov. 30, 2024). Earnings exceeded the Zacks Consensus Estimate, but net sales were below the same. Earnings beat the consensus mark for the 19th consecutive quarter. Acuity Brands stock rose 3.2% yesterday during the trading session.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Solid contributions from the Intelligent Spaces segment and the company's focus on product vitality and innovation ...

Core Insights - Acuity Brands reported revenue of $951.6 million for the quarter ended November 2024, reflecting a year-over-year increase of 1.8% and an EPS of $3.97 compared to $3.72 a year ago, with a slight revenue miss against the Zacks Consensus Estimate of $951.97 million [1] Revenue Performance - Revenues from Acuity Brands Lighting (ABL) were $886 million, slightly above the average estimate of $883.05 million, marking a year-over-year change of +1.1% [4] - Revenues from the Intelligent Spaces Group (ISG) reached $73.50 million, compared to the average estimate of $73.86 million, representing a year-over-year increase of +14.5% [4] - Eliminations in revenue were reported at -$7.90 million, slightly below the two-analyst average estimate of -$7.57 million, with a year-over-year change of +33.9% [4] Profitability Metrics - Adjusted operating profit for the Intelligent Spaces Group was $15.40 million, exceeding the average estimate of $13.98 million [4] - Adjusted operating profit for Acuity Brands Lighting was reported at $153.50 million, slightly below the average estimate of $154.04 million [4] Stock Performance - Acuity Brands' shares have returned -4.8% over the past month, compared to a -2.8% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics - No specific financial data or key metrics changes mentioned in the provided content [1][2][3][4] Business Line Data and Key Metrics - No specific business line data or key metrics changes mentioned in the provided content [1][2][3][4] Market Data and Key Metrics - No specific market data or key metrics changes mentioned in the provided content [1][2][3][4] Company Strategy and Industry Competition - The company will provide updates on strategic progress and fiscal 2025 first quarter performance during the call [3] - Forward-looking statements are covered by the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 [3] Management Commentary on Operating Environment and Future Outlook - No specific management commentary on the operating environment or future outlook mentioned in the provided content [1][2][3][4] Other Important Information - Reconciliations of certain non-GAAP financial metrics with their corresponding GAAP measures are available in the 2025 first quarter earnings release and supplemental presentation on the Investor Relations website [4] Q&A Session Summary - No Q&A session details provided in the content [1][2][3][4]

Company Performance - Acuity Brands reported quarterly earnings of $3.97 per share, exceeding the Zacks Consensus Estimate of $3.89 per share, and up from $3.72 per share a year ago, representing an earnings surprise of 2.06% [1] - The company posted revenues of $951.6 million for the quarter ended November 2024, slightly missing the Zacks Consensus Estimate by 0.04%, but up from $934.7 million year-over-year [2] - Over the last four quarters, Acuity Brands has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Stock Outlook - Acuity Brands shares have increased approximately 4% since the beginning of the year, outperforming the S&P 500's gain of 0.5% [3] - The current consensus EPS estimate for the upcoming quarter is $3.66 on revenues of $933.22 million, and for the current fiscal year, it is $16.71 on $4 billion in revenues [7] - The estimate revisions trend for Acuity Brands is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Building Products - Lighting industry, to which Acuity Brands belongs, is currently in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Acuity Brands reported net sales of $951.6 million for Q1 fiscal 2025, an increase of $16.9 million, or 1.8% year-over-year[1] - Operating profit was $133.3 million, a slight increase of $0.4 million, or 0.3%, with an operating profit margin of 14.0%, down 20 basis points from the prior year[2] - Adjusted diluted earnings per share (EPS) rose to $3.97, up $0.25, or 6.7%, compared to the previous year[3] - Net sales for the three months ended November 30, 2024, were $951.6 million, an increase of 1.8% compared to $934.7 million for the same period in 2023[29] - Gross profit for the same period was $449.3 million, up from $428.4 million, reflecting a gross margin improvement[25] - Net income increased to $106.7 million, a 6.1% rise from $100.6 million year-over-year[25] - Diluted earnings per share (EPS) rose to $3.35, compared to $3.21 in the prior year, marking a 4.4% increase[31] Segment Performance - Acuity Brands Lighting segment generated net sales of $886.0 million, an increase of $9.6 million, or 1.1% year-over-year[4] - Acuity Intelligent Spaces segment saw net sales of $73.5 million, a significant increase of $9.3 million, or 14.5% year-over-year[6] - Acuity Brands Lighting segment net sales were $886.0 million, a slight increase of 1.1% from $876.4 million[32] - Acuity Intelligent Spaces segment net sales grew by 14.5% to $73.5 million, up from $64.2 million[32] Cash Flow and Capital Management - Net cash from operating activities was $132.2 million for the first three months of fiscal 2025, with approximately 17,000 shares repurchased for about $5 million[8] - Cash flows from operating activities were $132.2 million, down 30.4% from $190.0 million in the previous year[32] - Free cash flow decreased to $113.3 million, a decline of 35.4% from $175.4 million year-over-year[32] Acquisitions and Investments - The company completed the acquisition of QSC, LLC for a gross purchase price of $1.215 billion, effective January 1, 2025[9] - The company aims to aggressively deploy capital to grow the business and enter attractive new verticals[12] Shareholder Returns - The company declared dividends of $0.15 per share, an increase from $0.13 per share in the previous year[25] Assets and Adjusted Metrics - Total assets increased to $3,864.3 million as of November 30, 2024, compared to $3,814.6 million at the end of the previous quarter[22] - Adjusted operating profit for the company was $158.7 million, an increase of $4.8 million, or 3.1% year-over-year[2] - Adjusted operating profit (Non-GAAP) for the total company was $158.7 million, reflecting a 3.1% increase from $153.9 million[31]

Financial Performance - For the first quarter of fiscal 2025, net sales increased by $16.9 million, or 1.8%, to $951.6 million compared to $934.7 million in the prior-year period[107] - Gross profit for the first quarter of fiscal 2025 rose by $20.9 million, or 4.9%, to $449.3 million, with a gross profit margin increase of 140 basis points to 47.2%[108] - Operating profit for the first quarter of fiscal 2025 was $133.3 million, representing 14.0% of net sales, a slight increase from $132.9 million or 14.2% of net sales in the prior-year period[110] - Net income for the first quarter of fiscal 2025 increased by $6.1 million, or 6.1%, to $106.7 million, with diluted earnings per share rising by $0.14, or 4.4%, to $3.35[115] Cash Flow and Investments - Cash position at November 30, 2024, was $935.6 million, an increase of $89.8 million from August 31, 2024[94] - Cash flows from operating activities for the three months ended November 30, 2024, were $132.2 million, a decrease of $57.8 million from $190.0 million in the prior-year period[95] - The company invested $18.9 million in property, plant, and equipment during the three months ended November 30, 2024, compared to $14.6 million in the prior-year period[101] - Dividends paid on common stock were $4.5 million ($0.15 per share) for the three months ended November 30, 2024, compared to $4.1 million ($0.13 per share) in the prior-year period[103] Debt and Acquisitions - The company had an outstanding debt balance of $496.3 million as of November 30, 2024, with compliance to all covenants under financing arrangements[97] - On January 1, 2025, the company acquired QSC, LLC for $1.215 billion, funded through cash on hand and proceeds from the Term Loan Facility[105] Segment Performance - Acuity Brands Lighting net sales for Q1 fiscal 2025 increased by $9.6 million, or 1.1%, to $886.0 million compared to $876.4 million in the prior-year period[116] - Operating profit for Acuity Brands Lighting was $143.3 million, representing a margin of 16.2%, a slight decrease from $143.8 million and 16.4% in the prior-year period[117] - Acuity Intelligent Spaces net sales for Q1 fiscal 2025 rose by $9.3 million, or 14.5%, to $73.5 million compared to $64.2 million in the prior-year period[118] - Operating profit for Acuity Intelligent Spaces increased to $10.8 million, up from $5.3 million, reflecting a 103.8% increase[118] - The increase in Acuity Intelligent Spaces sales was primarily driven by higher sales of Distech products[118] - Higher labor and overhead costs impacted the operating profit of Acuity Brands Lighting, despite the increase in net sales[117] Accounting and Risk Management - The company has not reported any material changes in critical accounting estimates during the current period[120] - There are no significant changes to market risk exposure compared to previous disclosures[122] - The company has evaluated the effectiveness of its disclosure controls and procedures as of November 30, 2024, and concluded they are effective[124] - No changes in internal control over financial reporting have materially affected the company during the most recent fiscal quarter[126]

Core Insights - Acuity Brands, Inc. reported net sales of $951.6 million for the first quarter of fiscal 2025, reflecting a year-over-year increase of $16.9 million, or 1.8% [2][9] - The company achieved an operating profit of $133.3 million, a slight increase of $0.4 million, or 0.3% compared to the previous year [3][9] - Adjusted diluted earnings per share rose to $3.97, marking an increase of $0.25, or 6.7% from $3.72 in the prior year [4][9] Financial Performance - The first quarter of fiscal 2025 saw an adjusted operating profit of $158.7 million, up $4.8 million, or 3.1% from the previous year [3][9] - The adjusted operating profit margin improved to 16.7%, an increase of 20 basis points year-over-year [3][9] - Net cash from operating activities was reported at $132.2 million for the first three months of fiscal 2025 [10] Segment Performance - Acuity Brands Lighting generated net sales of $886.0 million, an increase of $9.6 million, or 1.1% compared to the prior year [5][29] - Acuity Intelligent Spaces reported net sales of $73.5 million, reflecting a significant increase of $9.3 million, or 14.5% year-over-year [7][29] - Operating profit for Acuity Brands Lighting was $143.3 million, a decrease of $0.5 million, or 0.3% compared to the prior year [6][29] Acquisition Details - The company completed the acquisition of QSC, LLC effective January 1, 2025, for a gross purchase price of $1.215 billion [11][9] - This acquisition is expected to enhance Acuity's capabilities in cloud-manageable audio, video, and control solutions [11] Cash Flow and Capital Allocation - The company repurchased approximately 17,000 shares of common stock for about $5 million during the quarter [10] - Cash and cash equivalents at the end of the period were reported at $935.6 million, up from $845.8 million at the beginning of the period [10][28]

Core Viewpoint - Acuity Brands (AYI) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, supported by a solid history of exceeding expectations and positive analyst sentiment [1][6]. Earnings Performance - In the last reported quarter, Acuity Brands achieved earnings of $4.30 per share, surpassing the Zacks Consensus Estimate of $4.19 per share, resulting in a surprise of 2.63% [2]. - For the previous quarter, the company was expected to report earnings of $4.10 per share but delivered $4.15 per share, yielding a surprise of 1.22% [2]. Analyst Sentiment - Recent earnings estimates for Acuity Brands have been revised upward, indicating a positive outlook among analysts [3]. - The Zacks Earnings ESP for Acuity Brands is currently +1.16%, suggesting bullish sentiment regarding the company's earnings prospects [6]. Predictive Metrics - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a historical success rate of nearly 70% in beating consensus estimates [4]. - The Most Accurate Estimate, which is part of the Earnings ESP calculation, reflects the latest analyst revisions and is considered more accurate than earlier consensus predictions [5]. Upcoming Earnings Report - Acuity Brands is expected to release its next earnings report on January 8, 2025, and the combination of a positive Earnings ESP and a Zacks Rank 3 indicates a strong possibility of another earnings beat [6].

Core Viewpoint - Acuity Brands, Inc. is expected to report strong first-quarter fiscal 2025 results, with earnings and revenues anticipated to increase year over year, driven by product innovations and market expansion efforts [1][4]. Earnings Expectations - The Zacks Consensus Estimate for earnings per share has risen to $3.88, reflecting a 4.3% increase from $3.72 reported in the same quarter last year [3]. - Revenue expectations are set at $951.9 million, indicating a 1.8% increase from the previous year [3]. Revenue Growth Drivers - The anticipated growth in earnings and revenues is attributed to improvements in product vitality, service levels, technological advancements, and new product innovations [4]. - The ABL segment is projected to see a 1% year-over-year revenue increase to $885.3 million, with various revenue streams within the segment expected to grow modestly [5]. Segment Performance - The Intelligent Spaces Group (ISG) segment is expected to experience significant growth, with revenues projected to increase by 15.1% year over year to $73.9 million [6]. Profitability Factors - Ongoing product introductions and enhancements are central to driving profitability, with a focus on diverse customer needs contributing to margin improvement [7]. - The adjusted EBITDA margin is expected to improve to 17.9% from 17.8% a year ago, reflecting effective cost management and pricing strategies [7]. Earnings Prediction Model - The company's earnings prediction model indicates a likely earnings beat, supported by a positive Earnings ESP of +1.16% and a Zacks Rank of 3 (Hold) [8].