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Acuity Brands (AYI) Q3 Earnings Top Estimates, Revenues Lag
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Acuity Brands, Inc. (AYI - Free Report) reported mixed results for third-quarter fiscal 2023 (ended May 31, 2023), wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Earnings beat the consensus mark for the 13th consecutive quarter. Revenues missed the same for three quarters in a row following six straight quarters of beat.
Along with the earnings, the company announced the completion of the acquisition of KE2 Therm. This will enable it to expand its Distech Brand by entering into the commercial refrigeration control space.
Following the results, shares of the company rose 1.1% during the trading session on Jun 29.
Delving Deeper
AYI reported adjusted earnings of $3.75 per share, which topped the consensus estimate of $3.62 by 3.6%. The metric also increased 6.5% from the year-ago reported figure of $3.52 per share.
Acuity Brands Inc Price, Consensus and EPS Surprise
Net sales of $1 billion lagged the consensus mark of $1.04 billion by 3.5%. The metric also declined 5.7% from the prior-year quarter’s level. The downside was due to lower volumes.
Segment Details
Acuity Brands Lighting and Lighting Controls or ABL’s net sales declined 6.7% year over year to $940.7 million. Net sales in the Independent Sales Network were down 5.5% year over year to $686 million. Sales from Direct Sales Network were up 8.1% from the prior-year period’s level to $103.9 million. Retail sales of $48 million also increased 7.4% from the prior-year quarter’s levels. Sales in the Corporate Accounts channel declined 24.9% from the prior year’s levels to $44.4 million. The Original equipment manufacturer and other channels generated sales of $58.4 million, down 29.3% from the prior-year period’s levels.
Adjusted operating profit in the segment was on par with the prior year’s levels at $159.7 million. The adjusted operating margin was up 120 basis points (bps) year over year.
Intelligent Spaces Group or ISG generated net sales of $65.8 million, up 12.9% year over year. Adjusted operating profit was $12.8 million, down 5.9% from a year ago. Adjusted operating margin was down 380 bps year over year to 19.5% from the previous year.
Operating Highlights
Adjusted operating profit was flat year over year at $162.9 million. Adjusted operating margin of 16.3% was up 100 bps year over year. Adjusted EBITDA remained flat at $175.6 million from a year ago.
Financials
At fiscal third quarter-end, Acuity Brands had cash and cash equivalents of $359.3 million compared with $223.2 million at the fiscal 2022-end. Long-term debt was $495.4 million, which was in line with the fiscal 2022-end.
For the first nine months of fiscal 2023, cash provided by operating activities totaled $471.5 million, up from $165.7 million in the prior-year period. Free cash flow was up 231.6% to $423.5 million in the first nine months of fiscal 2023.
During the first nine months of fiscal 2023, the company repurchased approximately 1.3 million shares of its common stock for a total of $219 million.
Fiscal 2023 Outlook
For fiscal 2023, AYI expects net sales in the range of $3.9-$4 billion compared with the reported figure of $4.01 billion in fiscal 2022.
For the year, the adjusted earnings per shares is expected within the range of $13-$14.50 compared with the value of $12.83 reported in fiscal 2022.
Zacks Rank & Key Picks
Acuity Brands currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Construction sector are as follows:
PulteGroup Inc. (PHM - Free Report) : The company has been reaping benefits from the successful execution of strategic initiatives to boost profitability, with a focus on entry-level homes. PulteGroup, presently sporting a Zacks Rank #1 (Strong Buy), has jumped 69.8% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for its 2023 and 2024 earnings has been upwardly revised by 1.9% and 1.8%, respectively, over the past 30 days. Its earnings topped consensus estimates in three of the trailing four quarters and missed once, with the average surprise being 15.6%. Again, it carries an impressive VGM Score of A. This helps to identify stocks with the most attractive value, growth and momentum.
M.D.C. Holdings : This U.S.-based homebuilding and financial services company has gained 48.7% so far this year.
Earnings estimates for this Zacks Rank #1 company’s 2023 have increased to $3.55 per share from $3.39 per share over the past 30 days. The company’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed on other two occasions, the average beat being 27.8%. Impressively, it carries a VGM Score of A.
Toll Brothers (TOL - Free Report) : This Horsham, PA-based company, a leading builder of luxury homes, has gained 56.9% so far this year.
TOL currently sports a Zacks Rank #1. Earnings estimates for fiscal 2023 have increased to $10.61 per share from $9.96 per share over the past 30 days. The company’s earnings topped the Zacks Consensus Estimate in all the trailing four quarters, the average being 24.4%. Again, it carries an impressive VGM Score of A.
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Acuity Brands (AYI) Q3 Earnings Top Estimates, Revenues Lag
Acuity Brands, Inc. (AYI - Free Report) reported mixed results for third-quarter fiscal 2023 (ended May 31, 2023), wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Earnings beat the consensus mark for the 13th consecutive quarter. Revenues missed the same for three quarters in a row following six straight quarters of beat.
Along with the earnings, the company announced the completion of the acquisition of KE2 Therm. This will enable it to expand its Distech Brand by entering into the commercial refrigeration control space.
Following the results, shares of the company rose 1.1% during the trading session on Jun 29.
Delving Deeper
AYI reported adjusted earnings of $3.75 per share, which topped the consensus estimate of $3.62 by 3.6%. The metric also increased 6.5% from the year-ago reported figure of $3.52 per share.
Acuity Brands Inc Price, Consensus and EPS Surprise
Acuity Brands Inc price-consensus-eps-surprise-chart | Acuity Brands Inc Quote
Net sales of $1 billion lagged the consensus mark of $1.04 billion by 3.5%. The metric also declined 5.7% from the prior-year quarter’s level. The downside was due to lower volumes.
Segment Details
Acuity Brands Lighting and Lighting Controls or ABL’s net sales declined 6.7% year over year to $940.7 million. Net sales in the Independent Sales Network were down 5.5% year over year to $686 million. Sales from Direct Sales Network were up 8.1% from the prior-year period’s level to $103.9 million. Retail sales of $48 million also increased 7.4% from the prior-year quarter’s levels. Sales in the Corporate Accounts channel declined 24.9% from the prior year’s levels to $44.4 million. The Original equipment manufacturer and other channels generated sales of $58.4 million, down 29.3% from the prior-year period’s levels.
Adjusted operating profit in the segment was on par with the prior year’s levels at $159.7 million. The adjusted operating margin was up 120 basis points (bps) year over year.
Intelligent Spaces Group or ISG generated net sales of $65.8 million, up 12.9% year over year. Adjusted operating profit was $12.8 million, down 5.9% from a year ago. Adjusted operating margin was down 380 bps year over year to 19.5% from the previous year.
Operating Highlights
Adjusted operating profit was flat year over year at $162.9 million. Adjusted operating margin of 16.3% was up 100 bps year over year. Adjusted EBITDA remained flat at $175.6 million from a year ago.
Financials
At fiscal third quarter-end, Acuity Brands had cash and cash equivalents of $359.3 million compared with $223.2 million at the fiscal 2022-end. Long-term debt was $495.4 million, which was in line with the fiscal 2022-end.
For the first nine months of fiscal 2023, cash provided by operating activities totaled $471.5 million, up from $165.7 million in the prior-year period. Free cash flow was up 231.6% to $423.5 million in the first nine months of fiscal 2023.
During the first nine months of fiscal 2023, the company repurchased approximately 1.3 million shares of its common stock for a total of $219 million.
Fiscal 2023 Outlook
For fiscal 2023, AYI expects net sales in the range of $3.9-$4 billion compared with the reported figure of $4.01 billion in fiscal 2022.
For the year, the adjusted earnings per shares is expected within the range of $13-$14.50 compared with the value of $12.83 reported in fiscal 2022.
Zacks Rank & Key Picks
Acuity Brands currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Construction sector are as follows:
PulteGroup Inc. (PHM - Free Report) : The company has been reaping benefits from the successful execution of strategic initiatives to boost profitability, with a focus on entry-level homes. PulteGroup, presently sporting a Zacks Rank #1 (Strong Buy), has jumped 69.8% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for its 2023 and 2024 earnings has been upwardly revised by 1.9% and 1.8%, respectively, over the past 30 days. Its earnings topped consensus estimates in three of the trailing four quarters and missed once, with the average surprise being 15.6%. Again, it carries an impressive VGM Score of A. This helps to identify stocks with the most attractive value, growth and momentum.
M.D.C. Holdings : This U.S.-based homebuilding and financial services company has gained 48.7% so far this year.
Earnings estimates for this Zacks Rank #1 company’s 2023 have increased to $3.55 per share from $3.39 per share over the past 30 days. The company’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed on other two occasions, the average beat being 27.8%. Impressively, it carries a VGM Score of A.
Toll Brothers (TOL - Free Report) : This Horsham, PA-based company, a leading builder of luxury homes, has gained 56.9% so far this year.
TOL currently sports a Zacks Rank #1. Earnings estimates for fiscal 2023 have increased to $10.61 per share from $9.96 per share over the past 30 days. The company’s earnings topped the Zacks Consensus Estimate in all the trailing four quarters, the average being 24.4%. Again, it carries an impressive VGM Score of A.