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Acuity Brands (AYI) Q2 Earnings Top, Revenues Lag, Stock Up
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Acuity Brands, Inc. (AYI - Free Report) reported mixed results for second-quarter fiscal 2021, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Earnings beat the estimate for the fourth straight quarter. The top line declined on a year-over-year basis owing to a drop in retail sales and corporate account sales. However, the bottom line improved from the year-ago quarter. Following the results, shares of the company jumped 13.3% during the trading hours on Mar 31.
With respect to results, Neil Ashe, president and chief executive officer of Acuity Brands, said, “I am very proud of our team for another quarter of solid performance. We continue to see signs of a modest recovery in the wider market, while our margin expansion reflects the hard work of our associates who continue to control costs in a more consistent and predictable way.”
Delving Deeper
The company reported adjusted earnings of $2.12 per share that comfortably surpassed the Zacks Consensus Estimate of $1.69 by 25.4%. Also, the said metric grew 15.2% from the year-ago quarter’s reported figure.
Net sales during the quarter totaled $776.6 million, which missed the consensus mark of $784.9 million. Also, the reported figure declined 5.8% from $824.2 million in the prior-year quarter. The downside was caused by nearly a 24.3% decline in retail sales owing to the pandemic in the prior year combined with a current-quarter customer inventory rebalancing. Moreover, corporate account sales decreased 51.3% mainly due to lower shipments as larger retailers continue to defer unnecessary repairs. However, sales through the independent sales network and direct sales network were more or less flat.
Acuity Brands Inc Price, Consensus and EPS Surprise
Gross margin came in at 43.4%, up 170 basis points on a year-over-year basis. Gross profit margin increased primarily due to ongoing product and productivity improvements and efficient cost management.
Adjusted selling, distribution and administrative or SD&A expenses came in at $227.8 million (29.3% of net sales) compared with $242.3 million (29.4% of net sales) in the prior-year quarter, improving 10 basis point on a year-over-year basis. Adjusted operating profit for the second quarter of fiscal 2021 was $108.9 million compared with $101.7 million in the second quarter of fiscal 2020. Adjusted operating profit margin came in at 14% compared with 12.3% in the prior-year quarter.
Financials
As of Feb 28, 2021, Acuity Brands had cash and cash equivalents of $498.7 million compared with $560.7 million at the end of fiscal 2020. Cash provided by operating activities at the end of the second quarter of fiscal 2021 totaled $212.6 million, down from $214.7 million a year ago.
Outlook
The company is cautiously optimistic about the results for the rest of fiscal 2021, which is attributable to improvements in the end markets. With its product portfolio and strong go-to-market, it expects to deliver robust top-line performance. Although the company is uncertain about the economic environment due to the pandemic, it will continue to invest in technology expansion with the intention of becoming a more versatile entity.
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Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
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Acuity Brands (AYI) Q2 Earnings Top, Revenues Lag, Stock Up
Acuity Brands, Inc. (AYI - Free Report) reported mixed results for second-quarter fiscal 2021, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Earnings beat the estimate for the fourth straight quarter. The top line declined on a year-over-year basis owing to a drop in retail sales and corporate account sales. However, the bottom line improved from the year-ago quarter. Following the results, shares of the company jumped 13.3% during the trading hours on Mar 31.
With respect to results, Neil Ashe, president and chief executive officer of Acuity Brands, said, “I am very proud of our team for another quarter of solid performance. We continue to see signs of a modest recovery in the wider market, while our margin expansion reflects the hard work of our associates who continue to control costs in a more consistent and predictable way.”
Delving Deeper
The company reported adjusted earnings of $2.12 per share that comfortably surpassed the Zacks Consensus Estimate of $1.69 by 25.4%. Also, the said metric grew 15.2% from the year-ago quarter’s reported figure.
Net sales during the quarter totaled $776.6 million, which missed the consensus mark of $784.9 million. Also, the reported figure declined 5.8% from $824.2 million in the prior-year quarter. The downside was caused by nearly a 24.3% decline in retail sales owing to the pandemic in the prior year combined with a current-quarter customer inventory rebalancing. Moreover, corporate account sales decreased 51.3% mainly due to lower shipments as larger retailers continue to defer unnecessary repairs. However, sales through the independent sales network and direct sales network were more or less flat.
Acuity Brands Inc Price, Consensus and EPS Surprise
Acuity Brands Inc price-consensus-eps-surprise-chart | Acuity Brands Inc Quote
Operating Highlights
Gross margin came in at 43.4%, up 170 basis points on a year-over-year basis. Gross profit margin increased primarily due to ongoing product and productivity improvements and efficient cost management.
Adjusted selling, distribution and administrative or SD&A expenses came in at $227.8 million (29.3% of net sales) compared with $242.3 million (29.4% of net sales) in the prior-year quarter, improving 10 basis point on a year-over-year basis. Adjusted operating profit for the second quarter of fiscal 2021 was $108.9 million compared with $101.7 million in the second quarter of fiscal 2020. Adjusted operating profit margin came in at 14% compared with 12.3% in the prior-year quarter.
Financials
As of Feb 28, 2021, Acuity Brands had cash and cash equivalents of $498.7 million compared with $560.7 million at the end of fiscal 2020. Cash provided by operating activities at the end of the second quarter of fiscal 2021 totaled $212.6 million, down from $214.7 million a year ago.
Outlook
The company is cautiously optimistic about the results for the rest of fiscal 2021, which is attributable to improvements in the end markets. With its product portfolio and strong go-to-market, it expects to deliver robust top-line performance. Although the company is uncertain about the economic environment due to the pandemic, it will continue to invest in technology expansion with the intention of becoming a more versatile entity.
Zacks Rank
Acuity Brands — which shares space with Orion Energy Systems, Inc. (OESX - Free Report) , Energy Focus, Inc. (EFOI - Free Report) , and Life Storage, Inc. in the Zacks Building Products – Lighting industry — currently carries Zacks Rank #2 (Buy). You can the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>