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Why Is Acuity Brands (AYI) Up 6.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for Acuity Brands (AYI - Free Report) . Shares have added about 6.4% in that time frame, outperforming 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 Q4 Earnings Top Estimates, Margins Down
Acuity Brands, Inc. reported solid fourth-quarter fiscal 2022 results. The top and the bottom line surpassed the Zacks Consensus Estimate and increased on a year-over-year basis. The upside was backed by strong demand across the end markets along with price increases and product and productivity improvement.
Pertaining to the quarterly release, Neil Ashe — chairman, president, and chief executive officer of Acuity Brands — said, "We continued to deliver strong results in the fiscal fourth quarter, concluding what has been a very good fiscal 2022. We had strong demand across our end markets, and we demonstrated our ability to capture price and drive volume through product vitality and service in both our lighting and spaces businesses throughout this fiscal year."
Delving Deeper
AYI reported adjusted earnings of $3.95 per share, which topped the consensus estimate of $3.35 by 17.9%. The metric also increased 20.8% from the year-ago reported figure of $3.27 per share.
Net sales of $1,110 million marginally surpassed the consensus mark of $1,106 million and increased 11.8% from the prior-year quarter’s levels.
Segment Details
Acuity Brands Lighting and Lighting Controls or ABL’s net sales rose 11.4% year over year to $1.06 billion. Net sales in the Independent Sales Network were up 11.2% year over year to $737.1 million. Direct Sales Network sales were 12.5% up from the prior-year period’s levels to $114.9 million. Yet, Retail sales of $44 million declined 3.7% from the prior-year quarter’s levels. Sales in the Corporate Accounts channel fell 3.4% from the prior year’s levels to $73 million. The Other channel generated sales of $86 million, up 42.4% from the prior-year period’s levels.
Adjusted operating profit in the segment increased 1.6% from the prior year’s levels. The adjusted operating margin was down 150 basis points (bps) year over year.
Intelligent Spaces Group or ISG generated net sales of $61.4 million, up 21.6% year over year. Adjusted operating profit was $14.6 million, up from $6 million reported a year ago. Adjusted operating margin was up 1,190 bps year over year to 23.8% from 11.9% reported a year ago.
Operating Highlights
Gross margin declined 50 bps on a year-over-year basis to 41.7%. Adjusted operating margin came in at 15.3%, down 50 bps year over year. Adjusted EBITDA rose 6.8% to $182.9 million from a year ago.
Fiscal 2022 Highlights
For the year, net sales increased 15.7% year over year to $4.01 billion. Adjusted earnings of $12.83 per share increased 26.2% from the year-ago reported figure of $10.17 per share.
Adjusted operating margin of 14.7%, up 10 bps year over year. Adjusted EBITDA rose 13.5% to $641.9 million from a year ago.
Financials
At the fiscal 2022-end, Acuity Brands had cash and cash equivalents of $223.2 million compared with $491.3 million at the fiscal 2021-end. For fiscal 2022, cash provided by operating activities totaled $316.3 million, down from $408.7 million in the prior-year period.
During fiscal 2022, the company repurchased nearly 3 million shares of its common stock for $512 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Acuity Brands has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Acuity Brands has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is Acuity Brands (AYI) Up 6.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Acuity Brands (AYI - Free Report) . Shares have added about 6.4% in that time frame, outperforming 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 Q4 Earnings Top Estimates, Margins Down
Acuity Brands, Inc. reported solid fourth-quarter fiscal 2022 results. The top and the bottom line surpassed the Zacks Consensus Estimate and increased on a year-over-year basis. The upside was backed by strong demand across the end markets along with price increases and product and productivity improvement.
Pertaining to the quarterly release, Neil Ashe — chairman, president, and chief executive officer of Acuity Brands — said, "We continued to deliver strong results in the fiscal fourth quarter, concluding what has been a very good fiscal 2022. We had strong demand across our end markets, and we demonstrated our ability to capture price and drive volume through product vitality and service in both our lighting and spaces businesses throughout this fiscal year."
Delving Deeper
AYI reported adjusted earnings of $3.95 per share, which topped the consensus estimate of $3.35 by 17.9%. The metric also increased 20.8% from the year-ago reported figure of $3.27 per share.
Net sales of $1,110 million marginally surpassed the consensus mark of $1,106 million and increased 11.8% from the prior-year quarter’s levels.
Segment Details
Acuity Brands Lighting and Lighting Controls or ABL’s net sales rose 11.4% year over year to $1.06 billion. Net sales in the Independent Sales Network were up 11.2% year over year to $737.1 million. Direct Sales Network sales were 12.5% up from the prior-year period’s levels to $114.9 million. Yet, Retail sales of $44 million declined 3.7% from the prior-year quarter’s levels. Sales in the Corporate Accounts channel fell 3.4% from the prior year’s levels to $73 million. The Other channel generated sales of $86 million, up 42.4% from the prior-year period’s levels.
Adjusted operating profit in the segment increased 1.6% from the prior year’s levels. The adjusted operating margin was down 150 basis points (bps) year over year.
Intelligent Spaces Group or ISG generated net sales of $61.4 million, up 21.6% year over year. Adjusted operating profit was $14.6 million, up from $6 million reported a year ago. Adjusted operating margin was up 1,190 bps year over year to 23.8% from 11.9% reported a year ago.
Operating Highlights
Gross margin declined 50 bps on a year-over-year basis to 41.7%. Adjusted operating margin came in at 15.3%, down 50 bps year over year. Adjusted EBITDA rose 6.8% to $182.9 million from a year ago.
Fiscal 2022 Highlights
For the year, net sales increased 15.7% year over year to $4.01 billion. Adjusted earnings of $12.83 per share increased 26.2% from the year-ago reported figure of $10.17 per share.
Adjusted operating margin of 14.7%, up 10 bps year over year. Adjusted EBITDA rose 13.5% to $641.9 million from a year ago.
Financials
At the fiscal 2022-end, Acuity Brands had cash and cash equivalents of $223.2 million compared with $491.3 million at the fiscal 2021-end. For fiscal 2022, cash provided by operating activities totaled $316.3 million, down from $408.7 million in the prior-year period.
During fiscal 2022, the company repurchased nearly 3 million shares of its common stock for $512 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Acuity Brands has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Acuity Brands has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.