ATLANTA, May 30, 2024 (GLOBE NEWSWIRE) -- Acuity Brands, Inc. (NYSE: AYI) (the “Company”) today announced that it is planning to release its fiscal 2024 third quarter results on Thursday, June 27, 2024, at 6:00 a.m. (EST), followed by a conference call at 8:00 a.m. (EST). Neil Ashe, Chairman, President, and Chief Executive Officer of Acuity Brands will lead the call. The webcast, earnings release, and supplemental presentation can be accessed via the Investor Relations section of the Company's website at ww ...

Investors might want to bet on Acuity Brands (AYI) , as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.Since a chan ...

Company Overview - Acuity Brands, Inc. is headquartered in Atlanta, GA, and is the parent company of Acuity Brands Lighting, Inc. It manufactures and distributes lighting fixtures and related components, including luminaries, lighting controls, and integrated systems designed for energy efficiency and comfort in various applications [7]. Investment Ratings - Acuity Brands has a Zacks Rank of 2 (Buy) and a VGM Score of B, indicating a favorable investment outlook [7][8]. - The company has a Value Style Score of B, supported by a forward P/E ratio of 16.64, making it attractive for value investors [7]. Earnings Estimates - In the last 60 days, four analysts have revised their earnings estimates upwards for fiscal 2024, with the Zacks Consensus Estimate increasing by $0.81 to $15.60 per share [7]. - Acuity Brands has an average earnings surprise of 11%, suggesting a strong performance relative to expectations [7].

Company Performance - Acuity Brands (AYI) has gained approximately 24.2% year-to-date, significantly outperforming the average gain of 8.8% in the Construction sector [2] - The Zacks Consensus Estimate for AYI's full-year earnings has increased by 5.5% over the past 90 days, indicating improving analyst sentiment [2] - Acuity Brands holds a Zacks Rank of 1 (Strong Buy), suggesting a favorable outlook for the stock [1] Industry Comparison - Acuity Brands is part of the Building Products - Lighting industry, which has seen a year-to-date gain of about 22.8%, indicating strong performance relative to its peers [3] - The AZEK Company, another stock in the Construction sector, has a year-to-date return of 21.6% and a Zacks Rank of 2 (Buy), showcasing competitive performance within the sector [2][3] - The Building Products - Air Conditioner and Heating industry, to which The AZEK Company belongs, is ranked 18 and has gained 12.2% year-to-date, which is lower than the performance of Acuity Brands' industry [3]

Group 1 - Acuity Brands, Inc. (AYI) is a smart building technology provider with a Zacks Rank 1 and a 3.9% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Acuity Brands' shares increased by 6.3% over the last three months, outperforming the S&P 500's 2.2% gain, and it has a Momentum Score of A [1] - Ryanair Holdings plc (RYAAY) is an airline services provider with a Zacks Rank 1 and a 3.5% increase in the Zacks Consensus Estimate for its next year earnings over the last 60 days [1] - Ryanair Holdings' shares gained 6.7% over the last three months, also outperforming the S&P 500's 2.2% gain, and it has a Momentum Score of A [1] Group 2 - Community Trust Bancorp, Inc. (CTBI) is a holding company for Community Trust Bank, Inc. with a Zacks Rank 1 and a 2.8% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Community Trust Bancorp's shares increased by 0.2% over the last month, contrasting with the S&P 500's decline of 5.0%, and it has a Momentum Score of B [2]

Core Insights - Zacks Premium offers tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1] - The Zacks Style Scores provide a rating system for stocks based on value, growth, and momentum characteristics, aiding investors in selecting securities with high potential for market outperformance [2][3] Zacks Style Scores Overview - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales [2] - The Growth Score evaluates stocks based on projected earnings and sales growth, emphasizing financial health [3] - The Momentum Score assesses stocks based on price trends and earnings estimate changes, guiding investors on optimal entry points [3] - The VGM Score combines the three Style Scores to identify stocks with the best overall characteristics [4] Zacks Rank and Style Scores Interaction - The Zacks Rank is a proprietary model that uses earnings estimate revisions to rate stocks, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988 [5] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for maximum return potential [6] Company Spotlight: Acuity Brands (AYI) - Acuity Brands, Inc. is a manufacturer of lighting fixtures and related components, headquartered in Atlanta, GA [7] - AYI holds a Zacks Rank of 3 (Hold) and has a VGM Score of A, indicating solid performance potential [7] - The company has seen a 3% increase in shares over the past four weeks, with upward revisions in earnings estimates for fiscal 2024 [7] - AYI's average earnings surprise stands at 11%, making it a noteworthy option for investors [7][8]

Group 1 - Acuity Brands, Inc. (AYI) has a scalable business model and is targeting a market that is growing at a double-digit rate [2][51] - The company has made recent acquisitions, including assets from Current Lighting Solutions and KE2 Therm Solutions, indicating potential inorganic growth [2][34] - The lighting control system market is projected to grow significantly, with a compound annual growth rate of 16.8% from 2023 to 2032, which could enhance Acuity's net sales growth [35] Group 2 - Acuity Brands operates in two main segments: lighting controls and intelligent spaces, with a focus on low-consumption LED technology [3][4] - The intelligent spaces segment has shown double-digit net sales growth and an adjusted operating profit margin of approximately 32% [4][25] - The company reported a quarterly adjusted operating profit increase of nearly 2% year-over-year [3] Group 3 - The fiscal 2024 outlook includes net sales projected between $3.7 billion and $4 billion, with adjusted diluted EPS expected to be between $14.75 and $15.50 per share [28][29] - Recent earnings per share (EPS) were better than expected, and several analysts have raised their EPS forecasts in the last 90 days, indicating optimism for future demand [26][51] - The company has $578 million in cash, providing liquidity for potential share repurchases or new acquisitions [31][36] Group 4 - Acuity Brands has a strong balance sheet with total current assets of $1.54 billion and total assets worth $3.52 billion, indicating financial stability [31][32] - The company has a current ratio greater than 2x, suggesting sufficient liquidity for ongoing operations [31] - Long-term debt is relatively low at $495 million, which supports the company's financial health [32] Group 5 - The incorporation of artificial intelligence capabilities into product offerings may enhance efficiency and drive demand for Acuity's products [38][51] - The company's growth strategy includes both organic scaling and strategic acquisitions to expand productive margins [34] - The competitive landscape is evolving due to advancements in artificial intelligence and automation technology, which may impact Acuity's market position [49][50]

Core Insights - The global commercial greenhouse market was valued at US$38.02 billion in 2023 and is projected to grow at a CAGR of 8.3% from 2024 to 2034 [1] Group 1: Market Drivers - Increasing focus on sustainable food production is driving the adoption of commercial greenhouse cultivation, which allows for efficient use of resources and promotes eco-friendly agriculture [2] - Rapid urbanization and land scarcity are leading to a demand for commercial greenhouses, enabling vertical farming and maximizing land use efficiency in urban areas [3] - The shift towards Controlled Environment Agriculture (CEA) is reshaping the agricultural landscape, allowing for year-round production of high-value crops [8] - Expansion of export opportunities due to globalization and increasing demand for high-quality produce from emerging markets is stimulating market growth [9] - Increasing investment in Agri-tech start-ups is fostering innovation in the commercial greenhouse market, optimizing resource use and improving crop productivity [10] - Government support and incentives for greenhouse farming are encouraging investment and technology adoption in the sector [11] Group 2: Impact of COVID-19 - The COVID-19 pandemic initially caused operational challenges for greenhouse growers, including labor shortages and logistical constraints, leading to production delays and financial instability [4] - The pandemic highlighted the importance of local food production, increasing demand for greenhouse-grown produce as consumers became more conscious of food safety [5] - The crisis accelerated the adoption of technology and automation in greenhouse farming, enhancing productivity and reducing labor costs [5] Group 3: Competitive Landscape - Major players in the commercial greenhouse market include Agra-tech, Inc., Berry Global Group, Inc., and Heliospectra AB, among others, employing strategies such as M&A, R&D investment, and regional expansion [12] - Recent developments include Berry Global's lightweight tube closure system aimed at reducing greenhouse gas emissions and Heliospectra's new software for optimizing energy savings in greenhouse operations [13]

Core Insights - Acuity Brands, Inc. (AYI) reported strong second-quarter fiscal 2024 results, with earnings and revenues exceeding the Zacks Consensus Estimate, marking the 16th consecutive quarter of earnings beats [1][2] Financial Performance - Adjusted earnings per share were $3.38, surpassing the consensus estimate of $3.11 by 8.7% and increasing 10.5% from the previous year's $3.06 [2] - Net sales reached $905.9 million, exceeding the consensus mark of $897 million by 1%, although this represented a 4% decline from the prior-year quarter due to lower volumes [2] Segment Performance - Acuity Brands Lighting and Lighting Controls (ABL) saw net sales decline 5.3% year over year to $843.5 million, slightly above the estimate of $837 million [3] - The Independent Sales Network's sales decreased 3.6% year over year to $612.3 million, while Direct Sales Network sales fell 1.8% to $93 million [3] - Retail sales dropped 7.9% to $46.4 million, and Corporate Accounts channel sales plummeted 38.1% to $29.4 million [3] - Despite the sales decline, adjusted operating profit in the segment increased 2.3% to $136.4 million, with an adjusted operating margin up 120 basis points to 16.2% [3] Intelligent Spaces Group - The Intelligent Spaces Group (ISG) generated net sales of $68.1 million, a 17% year-over-year increase, exceeding the estimate of $67.6 million [4] - Adjusted operating profit for ISG rose 32.4% to $14.3 million, with an adjusted operating margin up 240 basis points to 21% [4] Operating Highlights - Adjusted operating profit increased 6.1% to $140.1 million, with an adjusted operating margin of 15.5%, up 150 basis points year over year [5] - Adjusted EBITDA rose 5.7% to $153 million, with an adjusted EBITDA margin expanding 160 basis points to 16.9% [5] Financial Position - At the end of the fiscal second quarter, Acuity Brands had cash and cash equivalents of $578.9 million, up from $397.9 million at the end of fiscal 2023 [6] - Long-term debt remained stable at $495.9 million [6] - Cash provided by operating activities totaled $292.6 million in the first half of fiscal 2024, down from $306.4 million in the prior-year period [6] - Free cash flow decreased 2.7% to $263.6 million in the first half of fiscal 2024 [6] - The company repurchased nearly 370,000 shares for $68 million during the first half of fiscal 2024 [6]

Financial Data and Key Metrics Changes - The company generated net sales of $906 million in Q2 2024, a decrease of $38 million or 4% compared to the prior year, primarily due to lower sales in the ABL business [17] - Adjusted operating profit increased by $8 million despite lower net sales, with an adjusted operating profit margin expanding to 15.5%, an increase of approximately 150 basis points from the prior year [18] - Adjusted diluted earnings per share rose to $3.38, an increase of $0.32 or 11% over the prior year, driven by higher net income and lower shares outstanding due to share repurchases [18] Business Line Data and Key Metrics Changes - ABL's net sales were $844 million, a decrease of around 5% compared to the prior year, with adjusted operating profit increasing 2% to $136 million and an adjusted operating profit margin of 16.2%, a 120 basis point improvement [19] - ISG's net sales for the second quarter were $68 million, an increase of 17%, with adjusted operating profit at $14 million and an adjusted operating profit margin of 21%, a 240 basis point improvement [19] Market Data and Key Metrics Changes - The order rates in both the Lighting business and the Spaces business are growing year-over-year, indicating a positive trend in demand [15] - The company is back to typical lead times in the lighting business, and absent the impact of sales from excess backlog last year, sales growth would have been experienced [16] Company Strategy and Development Direction - The company is focused on making spaces smarter, safer, and greener through its Intelligence Spaces business, expanding its addressable market geographically and by increasing control capabilities in build spaces [13][14] - Investments in product vitality and technology are aimed at improving product differentiation and operational efficiency, with a focus on expanding the horticulture product solutions [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning the lighting business to growth in a normalized environment, with expectations for continued margin improvement and strong cash flow generation [15][16] - The company raised its full-year expectations for adjusted diluted earnings per share to a range of $14.75 to $15.50, reflecting strong performance in the first half of the year [21] Other Important Information - The company has repurchased approximately 9.5 million shares at an average price of about $145 per share since the beginning of the fourth quarter of fiscal 2020, representing about 24% of the then shares outstanding [20] - The company increased its dividend per share by 15% during the quarter, indicating strong cash flow performance and confidence in future growth [20][27] Q&A Session Summary Question: Evidence of changes in commissions translating to better wins in infrastructure and SD&A - Management feels confident about positioning for larger projects, with strong orders expected to translate into sales over the next year or two [23] Question: Thoughts on cash balance and M&A pipeline - The company is pleased with cash flow performance and has a good pipeline for small to medium-sized acquisitions, focusing on expanding the Intelligence Spaces group [26][28] Question: New EPS guidance assumptions for sales - Management plans conservatively and expects the lighting business to return to growth, with no changes to revenue guidance [32] Question: Interest in controls and drivers of growth in ISG - There is strong demand for controls, with Distech perceived as a high-quality provider, and the company is expanding its addressable market [36] Question: Geographic expansion targets - The company is focused on expanding its Intelligence Spaces Group globally, with significant opportunities in North America and Europe [52] Question: Pricing strategy and market tone - Management is pleased with gross profit performance, strategically managing pricing while addressing input costs [55] Question: Sustainability of gross margins - Management feels confident about maintaining strong margins, driven by product vitality efforts and effective cost management [58] Question: Exposure to data centers - The company has significant exposure to data centers in both lighting and control segments, with ongoing opportunities for growth [61] Question: Back half guidance for gross margins - Management expects continued strong performance in the lighting business, with effective competition and margin management [66] Question: Nonresidential construction cycle outlook - Management believes the market is normalizing and feels confident in executing in various market conditions [72]