We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Acuity Brands (AYI) Up 5.3% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
A month has gone by since the last earnings report for Acuity Brands (AYI - Free Report) . Shares have added about 5.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Acuity Brands due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Acuity Brands reported impressive fourth-quarter fiscal 2021 results, wherein both the top and bottom lines handily surpassed the Zacks Consensus Estimate as well as improved from the prior year. Strength in go-to-market channels, product portfolio and robust economy allowed the company to effectively serve customers.
Neil Ashe, the chief executive officer of Acuity Brands, said, “We are entering fiscal 2022 from a position of strength with a diverse and capable team, who are driven by our values to deliver results for our customers, our investors and our environment.”
Delving Deeper
The company reported adjusted earnings of $3.27 per share, which topped the consensus estimate of $2.89 by 13.2%. The said metric also improved 39.1% from the year-ago reported figure of $2.35 per share.
Net sales of $992.7 million surpassed the consensus mark of $975.5 million by 1.8% and increased 11.4% from the prior-year quarter.
Segment Details
Acuity Brands Lighting and Lighting Controls or ABL’s net sales grew 11% year over year to $946.9 million. Net sales in the Independent Sales Network and Direct Sales Network were up 9.6% and 14.8% year over year, respectively. Sales in the Corporate Accounts channel increased 16% from the prior year as some large accounts began the previously deferred maintenance and renovations. Yet, Retail sales declined 20.1% from the prior-year quarter, primarily due to an ongoing customer inventory rebalancing. Adjusted operating profit in the segment increased 21.2% from the prior year. Adjusted operating margin was up 140 basis points (bps) year over year.
Intelligent Spaces Group or ISG generated net sales of $50.5 million, marking an increase of 23.5% year over year. The uptrend was due to strong demand for building and HVAC controls, energy management, and location services. Adjusted operating profit was up a notable 185.7% from fourth-quarter fiscal 2020. Adjusted operating margin was up 680 bps year over year.
Operating Highlights
Gross margin improved 10 bps on a year-over-year basis to 42.2% despite higher material, labor and freight costs. The improvement can be attributed to an increase in sales volumes, product and productivity improvements as well as benefits from recent price increases. Adjusted selling, distribution and administrative expenses — at a percentage of net sales — were 26.5% compared with 27.4% in the prior-year quarter, improving 90 bps on a year-over-year basis. Adjusted operating margin came in at 15.8%, up 110 bps year over year. The improvement was driven by higher gross margin and its ability to successfully leverage fixed costs.
Financials
At fiscal 2021-end, Acuity Brands had cash and cash equivalents of $491.3 million compared with $560.7 million at fiscal 2020-end. In fiscal 2021, cash provided by operating activities totaled $408.7 million, reflecting a decrease from $504.8 million in the prior-year period.
In fiscal 2021, the company repurchased 3.8 million shares of its common stock for $434.9 million at an average price of $114 per share. At fiscal 2021-end, it had approximately 3.8 million shares remaining under its most recent authorization.
Fiscal 2021 Highlights
The company generated adjusted earnings of $10.17 per share, up 23% from $8.27 in the year-ago period. Revenues of $3.5 billion improved 4% from the year-ago period. Adjusted operating margin rose 90 bps to 14.6%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Acuity Brands has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision indicates a downward shift. It comes with little surprise Acuity Brands has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Acuity Brands (AYI) Up 5.3% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Acuity Brands (AYI - Free Report) . Shares have added about 5.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Acuity Brands due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Acuity Brands (AYI - Free Report) Q4 Earnings & Sales Top, Margins Up Y/Y
Acuity Brands reported impressive fourth-quarter fiscal 2021 results, wherein both the top and bottom lines handily surpassed the Zacks Consensus Estimate as well as improved from the prior year. Strength in go-to-market channels, product portfolio and robust economy allowed the company to effectively serve customers.
Neil Ashe, the chief executive officer of Acuity Brands, said, “We are entering fiscal 2022 from a position of strength with a diverse and capable team, who are driven by our values to deliver results for our customers, our investors and our environment.”
Delving Deeper
The company reported adjusted earnings of $3.27 per share, which topped the consensus estimate of $2.89 by 13.2%. The said metric also improved 39.1% from the year-ago reported figure of $2.35 per share.
Net sales of $992.7 million surpassed the consensus mark of $975.5 million by 1.8% and increased 11.4% from the prior-year quarter.
Segment Details
Acuity Brands Lighting and Lighting Controls or ABL’s net sales grew 11% year over year to $946.9 million. Net sales in the Independent Sales Network and Direct Sales Network were up 9.6% and 14.8% year over year, respectively. Sales in the Corporate Accounts channel increased 16% from the prior year as some large accounts began the previously deferred maintenance and renovations. Yet, Retail sales declined 20.1% from the prior-year quarter, primarily due to an ongoing customer inventory rebalancing. Adjusted operating profit in the segment increased 21.2% from the prior year. Adjusted operating margin was up 140 basis points (bps) year over year.
Intelligent Spaces Group or ISG generated net sales of $50.5 million, marking an increase of 23.5% year over year. The uptrend was due to strong demand for building and HVAC controls, energy management, and location services. Adjusted operating profit was up a notable 185.7% from fourth-quarter fiscal 2020. Adjusted operating margin was up 680 bps year over year.
Operating Highlights
Gross margin improved 10 bps on a year-over-year basis to 42.2% despite higher material, labor and freight costs. The improvement can be attributed to an increase in sales volumes, product and productivity improvements as well as benefits from recent price increases.
Adjusted selling, distribution and administrative expenses — at a percentage of net sales — were 26.5% compared with 27.4% in the prior-year quarter, improving 90 bps on a year-over-year basis. Adjusted operating margin came in at 15.8%, up 110 bps year over year. The improvement was driven by higher gross margin and its ability to successfully leverage fixed costs.
Financials
At fiscal 2021-end, Acuity Brands had cash and cash equivalents of $491.3 million compared with $560.7 million at fiscal 2020-end. In fiscal 2021, cash provided by operating activities totaled $408.7 million, reflecting a decrease from $504.8 million in the prior-year period.
In fiscal 2021, the company repurchased 3.8 million shares of its common stock for $434.9 million at an average price of $114 per share. At fiscal 2021-end, it had approximately 3.8 million shares remaining under its most recent authorization.
Fiscal 2021 Highlights
The company generated adjusted earnings of $10.17 per share, up 23% from $8.27 in the year-ago period. Revenues of $3.5 billion improved 4% from the year-ago period. Adjusted operating margin rose 90 bps to 14.6%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Acuity Brands has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision indicates a downward shift. It comes with little surprise Acuity Brands has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.