Group 1: Zacks Premium and Style Scores - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, Equity Research reports, and Premium stock screens [1] - The Zacks Style Scores are complementary indicators that rate stocks based on value, growth, and momentum characteristics, helping investors identify stocks likely to outperform the market in the next 30 days [2][3] Group 2: Value, Growth, and Momentum Scores - The Value Score focuses on identifying undervalued stocks using ratios like P/E, PEG, and Price/Sales, appealing to value investors [3] - The Growth Score assesses a company's financial strength and future outlook, analyzing projected and historical earnings, sales, and cash flow to find sustainable growth stocks [4] - The Momentum Score identifies optimal times to invest based on price trends and earnings estimate changes, catering to momentum traders [5] Group 3: VGM Score and Zacks Rank - The VGM Score combines Value, Growth, and Momentum Scores, providing a comprehensive indicator for investors seeking a balanced approach [6] - The Zacks Rank is a proprietary model that utilizes earnings estimate revisions to guide investors, with 1 (Strong Buy) stocks achieving an average annual return of +23.62% since 1988, significantly outperforming the S&P 500 [7][8] Group 4: Stock Analysis - Acuity, Inc. - Acuity, Inc., headquartered in Atlanta, GA, manufactures and distributes lighting fixtures and related components, focusing on energy efficiency and comfort for various applications [11] - Acuity has a Zacks Rank of 3 (Hold) and a VGM Score of A, with a Value Style Score of B, supported by a forward P/E ratio of 17.61, making it attractive for value investors [12] - Recent upward revisions in earnings estimates and a Zacks Consensus Estimate increase of $0.31 to $17.34 per share indicate positive momentum for Acuity [12][13]

Company Overview - Acuity, 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 [11]. Investment Ratings - Acuity, Inc. currently holds a Zacks Rank of 3 (Hold) with a VGM Score of A, indicating a solid overall performance [12]. - The company has a Momentum Style Score of B, with shares increasing by 16% over the past four weeks [12]. Earnings Estimates - In the last 60 days, four analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate rising by $0.31 to $17.34 per share [12]. - Acuity, Inc. has an average earnings surprise of 5.6%, suggesting a positive trend in earnings performance [12]. Investment Considerations - With a strong Zacks Rank and high Momentum and VGM Style Scores, Acuity, Inc. is recommended for investors looking for potential opportunities [13].

Company Overview - Acuity, 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 [11]. Investment Ratings - Acuity, Inc. currently holds a Zacks Rank of 3 (Hold) and has a VGM Score of B, indicating a solid position in the market [12]. - The company is considered a potential top pick for growth investors, with a Growth Style Score of B, forecasting a year-over-year earnings growth of 9.7% for the current fiscal year [12]. Earnings Estimates - In the last 60 days, two analysts have revised their earnings estimates upwards for Acuity, leading to an increase in the Zacks Consensus Estimate by $0.04 to $17.07 per share [12]. - Acuity has demonstrated an average earnings surprise of 5.6%, suggesting a positive trend in earnings performance [12]. Investment Considerations - With a solid Zacks Rank and top-tier Growth and VGM Style Scores, Acuity, Inc. is recommended to be on investors' short lists for potential investment opportunities [13].

Group 1 - The core viewpoint is a reiteration of a buy rating for Acuity Brands Inc. (NYSE: AYI) due to strong demand outlook across its operating segments [1] - The investment approach focuses on long-term investments while also incorporating short-term shorts to uncover alpha opportunities [1] - The analysis emphasizes a bottom-up approach, assessing the fundamental strengths and weaknesses of individual companies [1] Group 2 - The investment duration is medium to long-term, aiming to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Insights - Acuity Inc. (AYI) reported strong third-quarter results for fiscal 2025, with adjusted earnings and net sales exceeding expectations and showing year-over-year growth [1][3][9] Financial Performance - Adjusted earnings per share (EPS) reached $5.12, surpassing the Zacks Consensus Estimate of $4.42 by 15.8% and increasing 23% from the previous year's EPS of $4.15 [3][9] - Net sales totaled $1.18 billion, exceeding the consensus estimate of $1.14 billion by 3% and improving 21.7% from the prior-year quarter [3][9] Segment Performance - The Acuity Brands Lighting segment, which accounts for the majority of sales, saw a 2.7% increase in quarterly sales to $923.2 million, above the estimate of $912.6 million [3] - Acuity Intelligent Spaces generated net sales of $264.1 million, a significant increase of 248.9% year over year, exceeding the estimate of $233.5 million [5][9] - Adjusted operating profit for Acuity Intelligent Spaces was $62.3 million, up 260.1% from the year-ago period [6] Operating Highlights - Adjusted operating profit increased 32.7% year over year to $221.7 million, with an adjusted operating margin of 18.8%, up 150 basis points [7] - Adjusted EBITDA rose 31.3% to $236.3 million, with an adjusted EBITDA margin expanding 140 basis points to 20% [7] Cash Flow and Shareholder Returns - As of the fiscal third quarter, cash and cash equivalents were $371.8 million, down from $845.8 million at the end of fiscal 2024 [10] - The company repurchased nearly 0.3 million shares for $90 million during the first nine months of fiscal 2025, with 3.4 million shares remaining in the repurchase program [11] - The quarterly dividend was increased by 13% to 17 cents per share, equating to 68 cents annually [11] Guidance - Acuity reaffirmed its fiscal 2025 guidance, expecting net sales between $4.3 billion and $4.5 billion and adjusted EPS in the range of $16.50-$18.00, indicating growth from fiscal 2024 [12]

Core Insights - Acuity reported revenue of $1.18 billion for the quarter ended May 2025, reflecting a year-over-year increase of 21.7% and surpassing the Zacks Consensus Estimate by 3.02% [1] - Earnings per share (EPS) for the quarter was $5.12, up from $4.15 in the same quarter last year, resulting in an EPS surprise of 15.84% compared to the consensus estimate of $4.42 [1] Financial Performance Metrics - Acuity Intelligent Spaces net sales reached $264.10 million, exceeding the average analyst estimate of $240.34 million, and showing a significant year-over-year increase of 248.9% [4] - Acuity Brands Lighting (ABL) net sales were reported at $923.20 million, slightly above the average estimate of $910.77 million, with a year-over-year growth of 2.8% [4] - Adjusted operating profit for Acuity Intelligent Spaces was $62.30 million, surpassing the average estimate of $44.69 million [4] - Adjusted operating profit for Acuity Brands Lighting was $173.90 million, compared to the average estimate of $164.07 million [4] Stock Performance - Acuity's shares have returned +9.9% over the past month, outperforming the Zacks S&P 500 composite's +5.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Fiscal 2025 Third Quarter Performance - Acuity Brands Lighting(AYI) achieved strong performance with a 33% increase in adjusted operating profit[13] - Acuity Brands Lighting(AYI) increased adjusted operating profit margin by 150 basis points[13] - Acuity Brands Lighting(AYI) increased adjusted diluted EPS by 23%[13] Segment Performance - Acuity Brands Lighting(ABL) reported net sales of $923 million, a 2.7% increase[15, 30] - Acuity Brands Lighting(ABL) achieved an adjusted operating profit margin of 18.8%, an increase of 80 basis points[15] - Acuity Intelligent Spaces(AIS) net sales increased by 249% to $264 million[17] - Acuity Intelligent Spaces(AIS) adjusted operating profit increased by 260% to $62 million[17] - Acuity Intelligent Spaces(AIS) adjusted operating profit margin increased by 70 basis points to 23.6%[17] Capital Allocation - Acuity Brands Lighting(AYI) allocated $399 million to share repurchases[19] - Acuity Brands Lighting(AYI) operating cash flow was $12 billion[19] - Acuity Brands Lighting(AYI) increased dividend by 13%[19] Fiscal 2025 Outlook - Acuity Brands Lighting(AYI) projects net sales in the range of $43 billion to $45 billion[21] - Acuity Brands Lighting(AYI) anticipates adjusted diluted EPS in the range of $1650 to $1800[22]

Financial Data and Key Metrics Changes - The company reported net sales of $1.2 billion for the third quarter, an increase of $211 million or 22% year-over-year [20] - Adjusted operating profit rose to $222 million, up $55 million or 33% from the previous year, with an adjusted operating profit margin of 18.8%, an increase of 150 basis points [21] - Adjusted diluted earnings per share increased to $5.12, up $0.97 or 23% compared to the prior year [21] Business Line Data and Key Metrics Changes - ABL (Acuity Brands Lighting) generated sales of $923 million, a $25 million or 3% increase year-over-year, driven by growth in independent sales and direct sales networks [21] - Acuity Intelligent Spaces (AIS) reported sales of $264 million, an increase of $188 million, with Atrius and Distech combined growing 21% and QSC growing over 20% year-over-year [25] Market Data and Key Metrics Changes - The company experienced accelerated orders in the third quarter, attributed to strategic pricing actions in response to evolving tariff policies [5][22] - The independent sales network and direct sales showed strong growth, while corporate accounts faced declines due to timing issues with a large retailer's renovations [21] Company Strategy and Development Direction - The company is focused on product vitality, service enhancement, and technology improvements to drive productivity and market share growth [18] - Acuity is entering new verticals, including refuel and healthcare, and is making strategic acquisitions to enhance its product offerings [110][111] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage outcomes amid uncertainties from tariff policies and geopolitical instability [17] - The expectation is that the combination of third and fourth quarter performance will meet the anticipated results for the second half of fiscal 2025 [62] Other Important Information - The company generated approximately $400 million in cash flow from operations year-to-date and has effectively allocated capital, including a 13% increase in dividends and share repurchases [27][28] - A special charge of $30 million was taken this quarter related to productivity efforts, which will yield benefits in future quarters [29][96] Q&A Session Summary Question: QSC margin performance - Management noted that QSC's margin improved significantly due to strong top-line growth and the adoption of productivity tools, with no deal accounting affecting the results [34][92] Question: Impact of accelerated orders and pricing actions - Management confirmed that there was evidence of order acceleration in both ABL and AIS, with expectations for normalized performance in the upcoming quarters [40][41] Question: Gross margin expectations for Q4 - Management indicated that while Q3 had minimal impact from tariffs, Q4 is expected to see some margin dilution due to tariff costs and pricing actions [58][60] Question: Demand environment and customer behavior - Management observed rational behavior from customers in response to pricing actions and tariff uncertainties, indicating a conservative approach to future expectations [97][99] Question: Progress on new verticals - Management highlighted strong traction in new markets such as refuel and healthcare, with ongoing efforts to enhance product offerings in these areas [110][111]

Financial Data and Key Metrics Changes - The company reported net sales of $1.2 billion for Q3 2025, an increase of $211 million or 22% year-over-year [21] - Adjusted operating profit rose to $222 million, up $55 million or 33% from the previous year, with an adjusted operating profit margin of 18.8%, an increase of 150 basis points [22] - Adjusted diluted earnings per share increased to $5.12, up $0.97 or 23% compared to the prior year [22] Business Line Data and Key Metrics Changes - ABL (Acuity Brands Lighting) generated sales of $923 million, a $25 million or 3% increase year-over-year, driven by growth in independent sales and direct sales networks [22] - Acuity Intelligent Spaces (AIS) reported sales of $264 million, an increase of $188 million, with Atrius and Distech combined growing 21% during the quarter [25] - QSC, part of AIS, grew over 20% year-over-year on a pro forma basis [25] Market Data and Key Metrics Changes - The company experienced accelerated orders in Q3 due to strategic pricing actions in response to evolving tariff policies, which contributed to building backlog [6][21] - The independent sales network and direct sales showed strong growth, while corporate accounts faced declines due to timing of renovations at a large retailer [22][24] Company Strategy and Development Direction - The company is focused on product vitality, elevating service levels, and using technology to improve operations and drive productivity [19] - Acuity is prioritizing investments in verticals where it has historically been underpenetrated, such as healthcare and sports lighting [9][100] - The strategy includes consolidating data management through Distech and Atrius, and enhancing user experiences with QSC [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage outcomes amid uncertainties from tariff policies and geopolitical instability [18][19] - The expectation is that the combination of Q3 and Q4 performance will yield the results anticipated for the second half of fiscal 2025 [18][59] - Management plans to approach future planning conservatively while remaining prepared to capitalize on market opportunities [39][90] Other Important Information - The company generated approximately $400 million in cash flow from operations year-to-date and allocated capital effectively, including a 13% increase in dividends and share repurchases [27][28] - A special charge of $30 million was taken in Q3 related to productivity efforts, which will yield benefits in future quarters [24][87] Q&A Session Summary Question: QSC margin performance - Management noted that QSC's margin improved significantly due to strong top-line growth and the adoption of productivity tools [33][35] Question: Impact of accelerated orders and pricing actions - Management confirmed that there was evidence of order acceleration in Q3, with expectations for normalized performance in Q4 [37][39] Question: Expectations for gross margin in Q4 - Management indicated that gross margin would likely be impacted by tariff costs in Q4, but they are confident in their ability to cover these costs [53][55] Question: Progress on shifting to Design Select - Management stated that progress on Design Select is strong, but it is a long-term project [71] Question: Demand environment and customer behavior - Management observed that customers are behaving rationally in response to pricing actions and tariff uncertainties, seeking stability in the marketplace [90]

Company Performance - Acuity (AYI) reported quarterly earnings of $5.12 per share, exceeding the Zacks Consensus Estimate of $4.42 per share, and up from $4.15 per share a year ago, representing an earnings surprise of +15.84% [1] - The company posted revenues of $1.18 billion for the quarter ended May 2025, surpassing the Zacks Consensus Estimate by 3.02%, compared to year-ago revenues of $968.1 million [2] - Over the last four quarters, Acuity has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Future Outlook - The sustainability of Acuity's stock price movement will depend on management's commentary during the earnings call and the earnings outlook [3][4] - The current consensus EPS estimate for the coming quarter is $4.94 on revenues of $1.22 billion, and for the current fiscal year, it is $17.02 on revenues of $4.33 billion [7] - The estimate revisions trend for Acuity was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Technology Services industry, to which Acuity belongs, is currently in the top 16% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Acuity's stock performance [5]