Core Viewpoint - Acuity Brands is expected to report quarterly earnings of $4.13 per share, reflecting a 4% increase year-over-year, while revenues are forecasted at $1.01 billion, indicating a slight decrease of 0.2% compared to the previous year [1] Group 1: Earnings and Revenue Estimates - The consensus EPS estimate for the quarter has remained unchanged over the past 30 days, indicating analysts' reassessment of their projections [1] - Analysts expect revenues from Acuity Brands Lighting (ABL) to be $939.44 million, a decrease of 0.5% from the year-ago quarter [2] - The Intelligent Spaces Group (ISG) is projected to generate revenues of $81.38 million, representing a 13.2% increase year-over-year [2] - The consensus estimate for adjusted operating profit from ISG is $15.92 million, up from $14.20 million reported in the same quarter last year [2] Group 2: Operating Profit Estimates - Adjusted operating profit for Acuity Brands Lighting is estimated at $169.59 million, compared to $158.70 million in the previous year [3] Group 3: Stock Performance - Acuity Brands shares have returned +7.3% over the past month, outperforming the Zacks S&P 500 composite, which saw a +1.7% change [3] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the overall market in the near future [3]

Group 1 - The management team at Acuity Brands announced financial results for the second quarter of the 2024 fiscal year [1] - The report highlights the company's performance and strategic direction within the industry [1] Group 2 - Crude Value Insights provides an investing service focused on oil and natural gas, emphasizing cash flow and growth prospects [1] - Subscribers have access to a stock model account, cash flow analyses of exploration and production firms, and live discussions about the sector [1]

Core Viewpoint - Acuity Brands, Inc. is set to announce its fiscal 2024 fourth-quarter and full-year results on October 1, 2024, with a conference call led by CEO Neil Ashe [1]. Company Overview - Acuity Brands, Inc. (NYSE: AYI) is a leading industrial technology company focused on solving problems related to spaces and lighting through innovative products and services [2]. - The company operates through two main segments: Acuity Brands Lighting and Lighting Controls (ABL) and the Intelligent Spaces Group (ISG) [2]. - Acuity Brands aims for growth by developing new products and services, enhancing customer efficiencies, and increasing market share [2]. Operational Footprint - The company is headquartered in Atlanta, Georgia, and has operations across North America, Europe, and Asia, supported by over 12,000 employees [3].

Core Viewpoint - Acuity Brands, Inc. (AYI) is experiencing growth driven by innovation in its diversified product portfolio and a focus on the Intelligent Spaces Group (ISG), despite facing economic uncertainties and high costs [1][2] Growth Drivers - Innovation is a key growth driver, with AYI prioritizing initiatives that expand its lighting control solutions and energy-efficient products, enhancing customer benefits and growth prospects [3] - The company emphasizes differentiated product portfolios, including Made-to-Order, Design Select, and Contractor Select, which cater to various market needs and enhance project design efficiency [4] - AYI is expanding into the refueling sector, developing tailored solutions for service stations, convenience stores, and quick-service restaurants, in addition to its existing offerings [5] - The ISG segment is focused on enhancing the intelligence, safety, and sustainability of spaces, with net sales in this segment rising 15% year over year to $75.7 million, driven by higher sales of Distech products [6] - Strategic margin-driven growth initiatives include acquisitions, joint ventures, and cost-saving measures, with an adjusted operating margin of 17.3% in the third quarter of fiscal 2024, expanding 100 basis points from the previous year [7] Headwinds - AYI operates in a volatile business environment influenced by economic factors such as GDP growth and employment levels, which can impact residential and non-residential construction activities [8] - The company reported a decline in total net sales to $968.1 million, down 3% from $1 billion in the prior-year period, primarily due to lower sales in the ABL segment [8] - High costs associated with the innovation of energy-efficient lighting products, particularly in installation, are increasing the company's cost structure [8]

Executive Appointment - Sach Sankpal has been appointed as President of Acuity Brands Lighting and Lighting Controls (ABL), bringing over 30 years of experience in transformation and innovation [1] - Neil Ashe, Chairman, President, and CEO of Acuity Brands, highlighted Sankpal's positive influence on the company's performance and culture since joining two years ago [1] - Trevor Palmer, the current President of ABL, will be leaving the company after a successful tenure, having led the business through several years of transformation [1] Strategic Vision - The company aims to take Acuity to new heights by adopting innovative approaches and creating a unified lighting organization under Sach Sankpal's leadership [2] - This reorganization is expected to enhance end-to-end process connectivity, accelerate growth, and drive productivity [2] Company Overview - Acuity Brands is a market-leading industrial technology company with two main business segments: Acuity Brands Lighting and Lighting Controls (ABL) and the Intelligent Spaces Group (ISG) [3] - The company focuses on designing, manufacturing, and bringing to market products and services that solve problems in spaces, light, and other areas [3] - Growth is achieved through the development of innovative products and services, including lighting, lighting controls, building management solutions, and location-aware applications [3] - The company is headquartered in Atlanta, Georgia, with operations across North America, Europe, and Asia, and employs approximately 12,000 associates [4] Media and Investor Contacts - Media inquiries can be directed to April Appling, Vice President of Corporate Communications [6] - Investor inquiries can be directed to Charlotte McLaughlin, Vice President of Investor Relations [6]

Executive Appointment - Sach Sankpal has been appointed as President of Acuity Brands Lighting and Lighting Controls (ABL), bringing over 30 years of experience in transformation and innovation [1] - Trevor Palmer, the current President of ABL, will be leaving the company after a successful tenure [1] Strategic Direction - The company aims to connect processes more effectively end-to-end under Sach Sankpal's leadership to accelerate growth and drive productivity [2] - Acuity Brands is focused on doing things differently to take the company to new places [2] Company Overview - Acuity Brands is a market-leading industrial technology company with two business segments: Acuity Brands Lighting and Lighting Controls (ABL) and the Intelligent Spaces Group (ISG) [3] - The company designs, manufactures, and brings to market products and services that make a valuable difference in people's lives [3] - Growth is achieved through innovative new products and services, customer-focused efficiencies, and aggressive capital deployment [3] Global Operations - Acuity Brands is based in Atlanta, Georgia, with operations across North America, Europe, and Asia [4] - The company is powered by approximately 12,000 dedicated and talented associates [4]

Core Insights - Acuity Brands, Inc. (AYI) reported mixed results for Q3 fiscal 2024, with earnings exceeding estimates while revenues fell short [1][2] - The company achieved a 17th consecutive quarter of earnings surpassing the Zacks Consensus Estimate, driven by a focus on margins and cash generation [1][2] Financial Performance - Adjusted earnings per share (EPS) were $4.15, beating the consensus estimate of $4.10 by 1.2% and increasing 10.7% from $3.75 a year ago [2] - Net sales totaled $968.1 million, missing the consensus mark of $995.4 million by 2.7% and declining 3% year-over-year due to lower volumes [2] Segment Performance - Acuity Brands Lighting and Lighting Controls (ABL) saw net sales decline 4.5% year-over-year to $898.5 million, below the estimate of $925.3 million [3] - The Independent Sales Network's sales decreased 7.1% to $637.1 million, while Direct Sales Network sales fell 6.6% to $97 million [3] - Retail sales dropped 4.8% to $45.7 million, but Corporate Accounts channel sales increased 36.3% to $60.5 million [3] - Adjusted operating profit for ABL rose 1.5% to $162.1 million, with an adjusted operating margin up 100 basis points to 18% [3] Intelligent Spaces Group - Intelligent Spaces Group (ISG) generated net sales of $75.7 million, a 15% increase year-over-year, with adjusted operating profit rising 35.2% to $17.3 million [4] - Adjusted operating margin for ISG improved by 340 basis points to 22.9% [4] Operating Highlights - Overall adjusted operating profit increased 2.6% to $167.1 million, with an adjusted operating margin of 17.3%, up 100 basis points [5] - Adjusted EBITDA rose 2.5% to $180 million, with an adjusted EBITDA margin expanding 100 basis points to 18.6% [5] Financial Position - As of the end of Q3, cash and cash equivalents stood at $699 million, up from $397.9 million at the end of fiscal 2023 [6] - Long-term debt slightly increased to $496 million from $495.6 million [6] - Cash provided by operating activities for the first nine months of fiscal 2024 totaled $445.1 million, down from $471.5 million in the prior-year period [6] - Free cash flow decreased 4.6% year-over-year to $404.1 million [6] - The company repurchased nearly 454,000 shares for $89 million during the first nine months of fiscal 2024 [6] Outlook - For fiscal 2024, AYI expects net sales in the range of $3.7 billion to $4 billion, compared to $3.95 billion reported in fiscal 2023 [7] - Adjusted EPS guidance was raised to a range of $14.75 to $15.50, up from a prior projection of $13 to $14.50 [7]

Financial Data and Key Metrics Changes - In Q3 2024, Acuity Brands generated net sales of $968 million, which was $32 million, or 3% below the prior year due to lower sales in the Lighting and Lighting Controls business [17] - Adjusted operating profit increased by $4 million year-over-year despite a $32 million decline in sales, with an adjusted operating profit margin of 17.3%, up 100 basis points from the previous year [18] - Adjusted diluted earnings per share rose to $4.15, an increase of $0.40, or 11% over the prior year [18] Business Line Data and Key Metrics Changes - In the Lighting and Lighting Controls business, net sales were $899 million, a decrease of 5%, but adjusted operating profit increased to $162 million with an adjusted operating profit margin of 18%, a 100 basis point improvement [18] - The Intelligent Spaces business reported net sales of $76 million, a 15% increase, with adjusted operating profit at $17 million and an adjusted operating profit margin of 22.9%, a 340 basis point improvement [19] Market Data and Key Metrics Changes - The order rate in the lighting business continued to grow year-over-year, with orders exceeding shipments, leading to a backlog that will be addressed in upcoming quarters [15][26] - The corporate accounts business showed strength due to a large retail relight project, while the C&I channel remained consistent across the country [30] Company Strategy and Development Direction - The company is focused on returning the Lighting and Lighting Controls business to growth while expanding margins and generating strong free cash flow [15][60] - Acuity Brands is entering new verticals such as refueling and horticulture, aiming to leverage its existing product portfolio to capture market opportunities [9][10] - The company continues to invest in technology and product vitality to enhance service levels and productivity, which are key drivers for margin improvement [39][57] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about future performance, highlighting the diversity of the portfolio as a strength [27] - The company is addressing production challenges that led to a backlog, with expectations to resolve these issues in the near term [53][54] - Management noted that while the market is not uniformly strong, the company is outperforming historical performance metrics [48] Other Important Information - Acuity Brands generated $445 million in cash flow from operating activities year-to-date and invested $41 million in capital expenditures [19][20] - The company increased its dividend per share by 15% and repurchased approximately 454,000 shares for about $89 million [20][43] Q&A Session Summary Question: Inquiry about gross margin performance and Design Select deployment - Management indicated that margin expansion is a multi-year process driven by product vitality and service level improvements, with Design Select pacing as expected [22][24] Question: Clarification on order rate growth and market trends - Management confirmed that order rates have been consistent, with backlog building due to unmet production targets, and expressed optimism about future growth [25][26] Question: Discussion on entering the refueling market - Management explained that the refueling vertical was previously overlooked but is now seen as an attractive opportunity due to limited competition and market size [34][35] Question: Inquiry about SG&A spending and leverage - Management acknowledged increased SG&A as part of operational investments, with expectations for leverage as the business returns to growth [37][39] Question: Discussion on cash deployment and M&A pipeline - Management highlighted a robust pipeline for small and medium-sized acquisitions, focusing on opportunities that align with strategic goals [42][45] Question: Clarification on production issues and revenue impact - Management clarified that production challenges were not alarming and stemmed from labor ramp-up issues, with expectations to resolve these in the upcoming quarters [53][54]

Fiscal 2024 Third Quarter Performance - Acuity Brands' net sales decreased by 3% to $968 million in Q3'24 compared to $1 billion in Q3'23 [9] - Adjusted diluted earnings per share increased by 11% to $4.15 in Q3'24 compared to $3.75 in Q3'23 [9] - Adjusted operating profit increased by 3% to $167 million in Q3'24 compared to $163 million in Q3'23 [9] - Year-to-date cash flow from operations decreased by 6% to $445 million [9] Segment Performance - ABL (Acuity Brands Lighting and Lighting Controls) net sales decreased [17] - ISG (Intelligent Spaces Group) net sales increased by 15% to $76 million in Q3'24 compared to $66 million in Q3'23 [15] - ISG adjusted operating profit increased by 35% to $17 million in Q3'24 compared to $13 million in Q3'23 [15] - ISG adjusted operating profit margin increased by 340 bps to 229% in Q3'24 compared to 195% in Q3'23 [15] Fiscal 2024 Outlook - The company projects net sales to be in the range of $37 billion to $40 billion [17] - Adjusted diluted EPS is expected to be in the range of $1475 to $1550 [17]

Core Insights - Acuity Brands reported $968.1 million in revenue for the quarter ended May 2024, reflecting a year-over-year decline of 3.2% and an EPS of $4.15, up from $3.75 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $995.41 million by 2.74%, while the EPS exceeded the consensus estimate of $4.10 by 1.22% [1] Revenue Performance - Revenues- Eliminations: Reported at -$6.10 million, better than the average estimate of -$7.32 million, representing a year-over-year change of -1.6% [2] - Revenues- Acuity Brands Lighting (ABL): Reported at $898.50 million, below the average estimate of $918.92 million, showing a year-over-year decline of 4.5% [2] - Revenues- Intelligent Spaces Group (ISG): Reported at $75.70 million, slightly below the estimated $76.42 million, but reflecting a year-over-year increase of 15.1% [2] Profit Metrics - Adjusted operating profit for Intelligent Spaces Group: Reported at $17.30 million, exceeding the average estimate of $14.25 million [2] - Adjusted operating profit for Acuity Brands Lighting: Reported at $162.10 million, slightly above the average estimate of $161.47 million [2] Stock Performance - Acuity Brands shares have returned -5.4% over the past month, contrasting with the Zacks S&P 500 composite's increase of +3.4% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]