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Acuity Brands (AYI) Down 5.3% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Acuity Brands (AYI - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Acuity Brands due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Acuity Brands Q2 Earnings Top Estimates, Margins Expand

Acuity Brands reported impressive results in second-quarter fiscal 2024 (ended Feb 29, 2024), with earnings and revenues surpassing the Zacks Consensus Estimate. Earnings beat the consensus mark for the 16th consecutive quarter.

Despite a year-over-year decline in sales in the lighting business, AYI reported strong fiscal second-quarter performance driven by increased focus on margins and cash generation. This approach resulted in a higher adjusted operating profit margin and increased adjusted diluted earnings per share.

Delving Deeper

The company reported adjusted earnings of $3.38 per share, which topped the consensus estimate of $3.11 by 8.7%. The metric also increased 10.5% from the year-ago reported figure of $3.06 per share.

Net sales of $905.9 million surpassed the consensus mark of $897 million by 1%. The metric declined 4% 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 5.3% year over year to $843.5 million. Net sales in the Independent Sales Network were down 3.6% year over year to $612.3 million. Sales from the Direct Sales Network were down 1.8% from the prior-year period’s level to $93 million. Retail sales of $46.4 million dropped 7.9% from the prior-year quarter’s levels. Sales in the Corporate Accounts channel declined 38.1% from the prior year’s levels to $29.4 million. The Original equipment manufacturer and other channels generated sales of $53.7 million, down 4.8% from the prior-year period’s levels.

Nevertheless, adjusted operating profit in the segment increased 2.3% from the prior year’s levels to $136.4 million. The adjusted operating margin was up 120 basis points (bps) year over year to 16.2%.

Intelligent Spaces Group or ISG generated net sales of $68.1 million, up 17% year over year. Adjusted operating profit was $14.3 million, up 32.4% from a year ago. Adjusted operating margin was up 240 bps year over year to 21%.

Operating Highlights

Adjusted operating profit increased 6.1% to $140.1 million. Adjusted operating margin of 15.5% was up 150 bps year over year. Adjusted EBITDA rose 5.7% to $153 million from a year ago. Adjusted EBITDA margin expanded 160 bps to 16.9% from a year ago.


At the fiscal second-quarter end, Acuity Brands had cash and cash equivalents of $578.9 million compared with $397.9 million at the fiscal 2023-end. Long-term debt was $495.9 million, in line with the fiscal 2023-end.

During the first six months of fiscal 2024, cash provided by operating activities totaled $292.6 million, down from $306.4 million in the prior-year period. Free cash flow was down 2.7% to $263.6 million in the first six months of fiscal 2024.

During the first half of fiscal 2024, the company repurchased nearly 370,000 shares of its common stock for $68 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

The consensus estimate has shifted 11.19% due to these changes.

VGM Scores

At this time, 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.


Estimates have been 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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