Core Insights - Acuity reported a strong start to fiscal 2026 with significant sales growth, expanding profitability, and higher adjusted earnings per share despite a tepid lighting market environment [2][6] Quarterly Results and Margin Expansion - Total net sales reached $1.1 billion, an increase of $192 million, or 20%, year-over-year, driven by growth in both business segments and including three months of QSC sales [3] - Adjusted operating profit rose to $196 million, up $38 million, or 24%, compared to the previous year, with an adjusted operating profit margin expanding to 17.2%, an increase of 50 basis points [3][6] - Adjusted diluted earnings per share increased to $4.69, up $0.72, or 18%, year-over-year [3][6] Segment Performance - In the Acuity Brands Lighting (ABL) segment, sales were $895 million, up $9 million, or 1%, primarily due to growth in the independent sales network and influenced by elevated backlog from accelerated orders ahead of price increases [4] - ABL adjusted operating profit increased by $6 million to $160 million, attributed to efforts to lower operating expenses, with an adjusted operating profit margin of 17.9%, up 60 basis points from the prior year [5] Overall Performance and Outlook - Acuity's total net sales rose approximately 20% to $1.1 billion, with adjusted operating profit increasing to $196 million and adjusted diluted EPS climbing to $4.69, alongside overall margin expansion of 50 basis points [6] - The lighting segment remained nearly flat at $895 million (+1%), while Acuity Intelligence Spaces surged to $257 million, up $184 million, driven by three months of QSC contribution and higher AIS margins of 22% [6] - Operating cash flow was $141 million, with the company repurchasing approximately $28 million of stock and repaying $100 million on the QSC term loan, totaling $300 million of $600 million repaid, while management described the lighting market as tepid and noted that backlog is normalizing [6]

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]

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 [15] - Adjusted operating profit increased by $38 million, or 24%, to $196 million, with an adjusted operating profit margin of 17.2%, up 50 basis points from the prior year [15] - Adjusted diluted earnings per share rose to $4.69, an increase of $0.72, or 18% over the prior year [15] Business Line Data and Key Metrics Changes - Acuity Brands Lighting (ABL) achieved sales of $895 million, a slight increase of $9 million, or 1% year-over-year, primarily due to growth in the independent sales network [16] - 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 [16] - Acuity Intelligent Spaces (AIS) reported sales of $257 million, an increase of $184 million, benefiting from the inclusion of three months of QSC sales [17] - AIS adjusted operating profit was $57 million, with an adjusted operating profit margin of 22%, up 100 basis points compared to the prior year [18] Market Data and Key Metrics Changes - The lighting market remains tepid, with the company noting that the market is waiting for clarity around interest rates, inflation, and policy [13] - The AIS business is strategically differentiated and positioned for value creation, continuing to perform well despite market challenges [13] 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 introduction of new products, such as the EAX Area Luminaire and the combination of Distech and QSC technologies, aims to enhance customer experiences and operational efficiency [6][10] - The company is committed to driving productivity and creating autonomous spaces through data interoperability [10] 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 [13] - The company is targeting 50-100 basis points of operating profit margin improvement per year, indicating a focus on long-term margin enhancement [24] Other Important Information - The company generated $141 million in cash flow from operations, which is $9 million higher than the same period last year [19] - The company allocated $28 million to repurchase shares and repaid $100 million of its term loan during the quarter [19] 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 [22][24] 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 [25][27] Question: Cross-sell opportunities between ABL and AIS - Management emphasized that cross-sell opportunities should be driven by customer demand rather than aggressive pushing of products [31] Question: Backlog normalization and future growth - Management confirmed that historical seasonality may be skewed due to elevated backlog levels, suggesting potential slower growth in the upcoming quarters [36] Question: Divergence between ISN and DSN - Management noted that while there is some noise in the accounts, the combined performance of ISN and DSN is in line with expectations [40] Question: Tariffs and potential impacts on pricing - Management discussed the uncertainty surrounding tariffs and the potential implications for pricing strategies [55][56] Question: Backlog levels and market outlook - Management indicated that backlog levels are now more consistent with pre-COVID periods, suggesting a return to normal order rates [58]

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]

Financial Performance - Acuity reported net sales of $1.1 billion for Q1 fiscal 2026, an increase of $192.1 million, or 20.2% year-over-year[2]. - Operating profit reached $160.4 million, up $27.1 million, or 20.3% compared to the prior year, with an operating profit margin of 14.0%[3]. - Adjusted operating profit was $196.3 million, an increase of $37.6 million, or 23.7%, with an adjusted operating profit margin of 17.2%, up 50 basis points[3]. - Diluted earnings per share (EPS) increased to $3.82, up $0.47, or 14.0%, while adjusted diluted EPS rose to $4.69, an increase of $0.72, or 18.1%[4]. - Net income for the period was $120.5 million, a 12.9% increase from $106.7 million in the previous year[32]. - Cash flows from operating activities were $140.8 million, an increase of 6.5% from $132.2 million year-over-year[33]. Segment Performance - Acuity Brands Lighting (ABL) generated net sales of $895.1 million, a 1.0% increase year-over-year, with an operating profit margin of 16.6%[6][7]. - Acuity Intelligent Spaces (AIS) net sales were $257.4 million, a significant increase of $183.9 million compared to the prior year[8]. - Acuity Intelligent Spaces segment saw a significant increase in net sales to $257.4 million, up 250.2% from $73.5 million in the prior year[30]. Cash and Assets - Net cash from operating activities was $140.8 million for the first three months of fiscal 2026, with $28 million spent on share repurchases and $100 million on term-loan repayments[10]. - Total assets decreased to $4.652 billion from $4.755 billion, while total liabilities decreased to $1.858 billion from $2.030 billion[24]. - Total cash and cash equivalents at the end of the period decreased to $376.1 million from $935.6 million at the end of the previous year[28]. Growth Strategy - The company aims to grow through innovative product development and market expansion into attractive new verticals[14]. - Acuity's forward-looking statements indicate a commitment to capital allocation for growth and productivity improvements[21]. Historical Comparison - Net sales for the three months ended November 30, 2025, increased to $1,143.7 million, up 20.2% from $951.6 million in the same period last year[30]. - Gross profit rose to $553.8 million, representing a 23.2% increase from $449.3 million year-over-year[30]. - Operating profit increased by 20.3% to $160.4 million compared to $133.3 million in the prior year[32]. - The company declared dividends of $0.17 per share, compared to $0.15 per share in the same quarter last year[30]. - Adjusted operating profit (Non-GAAP) increased to $196.3 million, a 23.7% rise from $158.7 million year-over-year[32].

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].

Core Insights - Acuity Inc. reported net sales of $1.1 billion for the first quarter of fiscal 2026, marking a 20.2% increase compared to the previous year [1][10] - The company achieved an operating profit of $160.4 million, up 20.3% year-over-year, with an adjusted operating profit of $196.3 million, reflecting a 23.7% increase [2][10] - Diluted earnings per share rose to $3.82, a 14.0% increase, while adjusted diluted earnings per share reached $4.69, up 18.1% [3][10] Financial Performance - Net sales for Acuity Brands Lighting (ABL) were $895.1 million, a 1.0% increase from the prior year [4][10] - ABL's operating profit was $149.0 million, a 4.0% increase, with an operating profit margin of 16.6% [5][10] - Acuity Intelligent Spaces (AIS) generated net sales of $257.4 million, a significant increase of 250.2% compared to the previous year [6][10] Cash Flow and Capital Allocation - The company reported net cash from operating activities of $140.8 million for the first three months of fiscal 2026 [8][10] - Acuity repurchased approximately 77,000 shares for around $28 million and repaid $100 million of term-loan borrowings during the quarter [8][10] Segment Performance - ABL's adjusted operating profit was $159.8 million, up 4.1%, with an adjusted operating profit margin of 17.9% [5][10] - AIS's adjusted operating profit reached $56.6 million, a substantial increase of 267.5%, with an adjusted operating profit margin of 22.0% [7][10] Overall Company Strategy - Acuity Inc. focuses on innovative product development and effective capital allocation to drive growth and enhance market share [12][13]

Company Overview - Acuity Brands Lighting (ABL) net sales were $3612 million in FY25 and $3621 million in LTM Q1'26[46] - Acuity Intelligent Spaces (AIS) net sales were $764 million in FY25 and $948 million in LTM Q1'26[47] Financial Performance - The company's net sales have grown from $17 billion in FY09 to $4538 billion in LTM Q1'26[34, 42] - Adjusted operating profit increased from $196 million in FY09 to $806 million in LTM Q1'26[35, 42] - Adjusted diluted earnings per share increased from $274 in FY09 to $1873 in LTM Q1'26[37] - Free cash flow increased from $72 million in FY09 to $534 million in LTM Q1'26[38, 44] Capital Allocation - The company has repurchased approximately $15 billion of its shares outstanding from the beginning of the 4th quarter of 2020, representing approximately 25% of the then-outstanding shares[31] ABL Performance - ABL Adjusted Operating Profit was $662 million in FY25 and $669 million in LTM Q1'26[23, 46] - ABL Adjusted Operating Profit Margin was 183% in FY25 and 185% in LTM Q1'26[23, 46] AIS Performance - AIS Adjusted Operating Profit was $164 million in FY25 and $206 million in LTM Q1'26[28, 47] - AIS Adjusted Operating Profit Margin was 215% in FY25 and 217% in LTM Q1'26[28, 47]

Core Insights - Acuity Brands, Inc. (AYI) is set to announce its first-quarter fiscal 2026 results on January 8, with expectations of year-over-year growth in both earnings and revenues supported by strong performance in its segments [1][3][8] Financial Performance - In the last reported quarter, adjusted earnings exceeded the Zacks Consensus Estimate by 10.6% and increased by 20.9% year over year, while revenues grew by 17.2% but missed the consensus by 0.3% [1] - The Zacks Consensus Estimate for the upcoming quarter's earnings per share (EPS) is $4.45, reflecting a 12.1% increase from $3.97 in the same quarter last year, with revenues expected to reach $1.13 billion, a 19.2% increase year over year [2][8] Segment Analysis - The Acuity Brands Lighting (ABL) segment, which contributed 83.1% to fiscal 2025 net sales, is projected to see revenues rise by 2.6% year over year to $909.3 million, although demand conditions are described as tepid [5] - The Acuity Intelligent Spaces (AIS) segment is expected to experience significant growth, with revenues forecasted to surge by 219.8% year over year to $235.1 million, driven by organic growth from products like Atrius, Distech, and QSC [9] Strategic Initiatives - The company is focusing on developing market-leading solutions and expanding its healthcare portfolio, with new product launches such as the Care Collection and Nightingale range contributing to its performance [4] - Management has implemented permanent restructuring and operating expense actions to maintain a leaner cost base, which is expected to help offset softer volumes and seasonal effects [6] Cost Management and Profitability - Cost-control actions, organizational optimization, and productivity gains are anticipated to support profitability despite challenges from higher tariff costs [10] - The adjusted EBITDA margin is expected to increase to 18.1% in the fiscal first quarter from 18% a year ago, indicating improved operational efficiency [12]