Back to top

Image: Bigstock

Acuity Brands (AYI) Q1 Earnings & Sales Top, Shares Rise

Read MoreHide Full Article

Acuity Brands, Inc. (AYI - Free Report) reported impressive first-quarter fiscal 2022 results, wherein both the top and bottom lines handily surpassed the Zacks Consensus Estimate as well as improved from the prior year. Despite global supply chain challenges and unpredictable market conditions, higher sales from its Acuity Brands Lighting and Lighting Controls segment along with price increases and product and productivity improvement drove the results.

Impressively, the stock gained more than 3.9% in the pre-market trading session on Jan 7.

Neil Ashe, chairman, president, and chief executive officer of Acuity Brands, said, "Our performance demonstrates that by prioritizing customers we are driving sales growth and turning that into operating income while continuing to invest in the long-term growth and transformation of the company."

Delving Deeper

AYI reported adjusted earnings of $2.85 per share, which topped the consensus estimate of $2.37 by 20.3%. The said metric also improved 40.4% from the year-ago reported figure of $2.03 per share.

Net sales of $926.1 million surpassed the consensus mark of $896 million by 3.4% and increased 16.9% from the prior-year quarter.

Acuity Brands Inc Price, Consensus and EPS Surprise

Acuity Brands Inc Price, Consensus and EPS Surprise

Acuity Brands Inc price-consensus-eps-surprise-chart | Acuity Brands Inc Quote

Segment Details

Acuity Brands Lighting and Lighting Controls or ABL’s net sales grew 17.3% year over year to $883.6 million. Net sales in the Independent Sales Network and Direct Sales Network were up 13.8% and 12.4% year over year, respectively. Sales in the Corporate Accounts channel increased 61.6% from the prior year, as some large accounts began the previously deferred maintenance and renovations. Yet, Retail sales declined 16.3% from the prior-year quarter.

Adjusted operating profit in the segment increased 27.6% from the prior year. Adjusted operating margin was up 120 basis points (bps) year over year.

Intelligent Spaces Group or ISG generated net sales of $46.4 million, marking an increase of 13.7% 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 64.9% from first-quarter fiscal 2021. Adjusted operating margin was up 400 bps year over year.

Operating Highlights

Gross margin declined 30 bps on a year-over-year basis to 41.7% owing to higher material, labor and freight costs. This was partly offset by higher revenues, productivity improvements and benefits from the recent price increases.

Adjusted operating margin came in at 14.4%, up 120 bps year over year. The improvement was driven by higher gross margin and its ability to successfully leverage fixed costs.


At fiscal first quarter-end, Acuity Brands had cash and cash equivalents of $504 million compared with $491.3 million at fiscal 2021-end. For the first three months of fiscal 2022, cash provided by operating activities totaled $83.7 million, reflecting a decrease from $123.9 million in the prior-year period.

During the quarter, the company repurchased 0.3 million shares of its common stock for $52.8 million. At fiscal 2021-end, AYI had approximately 3.5 million shares remaining under its most recent authorization.

Zacks Rank & Key Picks

Acuity Brands currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some Better-Ranked Stocks From the Broader Construction Sector

Beazer Homes USA, Inc. (BZH - Free Report) currently sports a Zacks Rank #1. This Atlanta-based homebuilder continues to gain from strong operational execution and continued strength in the housing market.

Beazer Homes has gained 45.9% over the past year. Earnings are expected to grow 23.7% for fiscal 2022.

Quanta Services, Inc. (PWR - Free Report) currently carries a Zacks Rank #2 (Buy). Based in Houston, TX, Quanta is gaining from a three-pronged growth strategy focusing on the timely delivery of projects to exceed customer expectations, leverage on core business to expand in complementary adjacent service lines and enable the continuation of exploring new service lines. Overall, the company’s engineering and project management capabilities allow it to capitalize on market trends that are currently skewed toward the engineering, procurement, and construction or EPC model.

Quanta has gained 44.8% over the past year. Earnings are expected to grow 28.3% for 2022.

United Rentals, Inc. (URI - Free Report) currently carries a Zacks Rank #2. Based in Stamford, CT, this is the largest equipment rental company in the world. It has been benefiting from broad-based improvement across its verticals, with persistent growth opportunities for certain non-residential verticals including datacenter, healthcare and warehouse projects.

United Rentals’ shares have gained 28.8% over the past year. Earnings are expected to grow 21.3% for 2022.