Acuity Brands Shares Slide Despite Earnings Beat and Margin Expansion

Core Viewpoint - Acuity Brands reported strong first-quarter fiscal 2026 adjusted earnings, surpassing analyst expectations, but experienced a significant drop in share price despite solid revenue growth and margin improvement [1]. Group 1: Financial Performance - Adjusted earnings for the quarter ended November 30, 2025, were $4.69 per share, exceeding the consensus estimate of $4.58 [1]. - Revenue increased by 20.2% year over year to $1.14 billion, aligning with analyst expectations [1]. - Adjusted operating profit rose by 23.7% to $196.3 million, with adjusted operating margin expanding by 50 basis points to 17.2% [2]. Group 2: Segment Performance - The Acuity Intelligent Spaces segment led revenue growth, with sales surging by 250.2% to $257.4 million [2]. - The Acuity Brands Lighting segment saw a modest sales increase of 1% to $895.1 million [2]. - Adjusted operating margin in the AIS business improved by 100 basis points to 22.0%, while the lighting segment's margin increased by 60 basis points to 17.9% [3]. Group 3: Cash Flow and Share Repurchase - The company generated $140.8 million in operating cash flow during the quarter [2]. - Approximately 77,000 shares were repurchased for about $28 million [2]. Group 4: Debt Management - Acuity Brands reduced debt by repaying $100 million of term-loan borrowings during the quarter [3].