Acuity Brands, Inc. ( AYI Quick Quote AYI - Free Report) reported solid third-quarter fiscal 2022 results. The top and the bottom line surpassed the Zacks Consensus Estimate and improved from the prior-year quarter’s levels. The upside was backed by higher sales from both of its segments along with price increases and product and productivity improvement. However, the stock fell 1.09% on Jun 30. The company expects market conditions to remain consistent in the fiscal fourth quarter. Pertaining to the quarterly release, Neil Ashe — chairman, president, and chief executive officer of Acuity Brands — said, "We are executing consistently as a result of significant and ongoing improvements in our business, and we continue to generate value for shareholders through share repurchases." Delving Deeper
AYI reported adjusted earnings of $3.52 per share, which topped the consensus estimate of $2.98 by 18.1%. The metric also improved 27.1% from the year-ago reported figure of $2.77 per share.
Net sales of $1,061 million surpassed the consensus mark of $997 million by 6.4% and increased 17.9% from the prior-year quarter. The improvement was mainly driven by ABL and its focus on product vitality and service levels. Also, strong demand, benefits from recent price increases and the OSRAM DS business acquisition added to the positives.
Segment Details Acuity Brands Lighting and Lighting Controls or ABL’s net sales grew 18.6% year over year to $1,008.4 million, backed by a 3% contribution from the acquisition of the Osram DS business. Net sales in the Independent Sales Network were up 15.6% year over year to $725.9 million. Direct Sales Network sales were 0.6% down from the prior-year period’s levels to $96.1 million. Sales in the Corporate Accounts channel increased 34.3% from the prior year to $59.1 million. Yet, Retail sales of $44.7 million increased 23.8% from the prior-year quarter. Adjusted operating profit in the segment increased 17.7% from the prior year. Yet, the adjusted operating margin was down 20 basis points (bps) year over year. Intelligent Spaces Group or ISG generated net sales of $58.3 million, marking a 5.2% year-over-year increase. Adjusted operating profit was up 22.5% from third-quarter fiscal 2021. Adjusted operating margin was up a notable 330 bps year over year. Operating Highlights
Gross margin declined 100 bps on a year-over-year basis to 42%, owing to the dilutive mix of the acquisition of the OSRAM DS business.
Adjusted operating margin came in at 15.3%, up 10 bps year over year. Adjusted EBITDA rose 16.2% to $176.1 million from a year ago. Financials
At the fiscal third quarter-end, Acuity Brands had cash and cash equivalents of $318.2 million compared with $491.3 million at the fiscal 2021-end. For the first nine months of fiscal 2022, cash provided by operating activities totaled $165.7 million, reflecting a decrease from $316.2 million in the prior-year period.
During the first nine months of fiscal 2022, the company repurchased 2.3 million shares of its common stock for $405 million. Zacks Rank & Key Pick
Acuity Brands currently carries a Zacks Rank #4 (Sell).
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