It has been about a month since the last earnings report for Acuity (AYI). Shares have added about 1.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Acuity due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Acuity, Inc. before we dive into how investors and analysts have reacted as of late.
Acuity Brands' Q4 Earnings Topping Estimates, Sales Miss, Both Up Y/Y
Acuity Inc. (AYI) reported mixed fourth-quarter fiscal 2025 results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. Meanwhile, both the top and bottom lines increased from the prior-year quarter’s reported figure.
The quarter’s performance was underpinned by effective strategic execution and decisive actions taken over the past two quarters to sustain margins amid the impact of higher tariffs and related price adjustments. Growth was further supported by strong contributions from both the Acuity Intelligent Spaces and Acuity Brands Lighting segments, driven by margin expansion and continued product innovation. Additionally, robust results across the Atrius, Distech, and QSC platforms — with QSC evolving the geographic footprint of the AIS business, accelerating multinational expansion — further strengthened overall performance.
Acuity’s Q4 Earnings & Sales Performance
The company reported adjusted earnings per share (EPS) of $5.20, which topped the Zacks Consensus Estimate of $4.70 by 10.6%. The metric also increased 21% from the year-ago reported EPS of $4.30.
Net sales of $1.209 billion missed the consensus mark of $1.212 billion by 0.3% but improved 17.1% from the prior-year quarter’s level.
Acuity’s Segment Details
The Acuity Brands Lighting segment, responsible for the majority of sales, experienced an increase in quarterly sales by 0.8% to $962.4 million.
Net sales in the Independent Sales Network were up 3.7% year over year to $702.4 million. Sales from the Direct Sales Network were down 3.9% from the prior-year period’s level to $105.3 million.
Retail sales of $43.4 million were up 1.9% from the prior-year quarter’s level. Sales in the Corporate Accounts channel decreased 19.6% from the prior-year quarter to $52.9 million. The original equipment manufacturer and other channel sales of $58.4 million were also down 2.5% from the prior-year period’s level.
The adjusted operating profit in the segment increased 12.6% from the prior year’s level to $193.6 million. The adjusted operating margin was up 210 basis points (bps) year over year to 20.1%.
Acuity Intelligent Spaces generated net sales of $255.2 million, which were significantly up 204.2% year over year. The adjusted operating profit was $54.6 million, up by a whopping 154% from the year-ago period. The adjusted operating margin, however, contracted 420 bps year over year to 21.4%.
AYI’s Operating Highlights
The adjusted operating profit increased 26.2% year over year to $225.3 million. The adjusted operating margin of 18.6% was up 130 bps year over year.
Adjusted EBITDA rose 25.8% to $240.7 million from the year-ago period. The adjusted EBITDA margin expanded 140 bps from the year-ago period to 19.9%.
Acuity’s Financials
As of the fiscal fourth quarter, Acuity had cash and cash equivalents of $422.5 million compared with $845.8 million at the fiscal 2024-end. Long-term debt was $896.8 million, up from $496.2 million at the fiscal 2024 end.
For the full year of fiscal 2025, cash provided by operating activities totaled $601.4 million, down from $619.2 million in the prior-year period. Adjusted free cash flow was down 4% year over year to $533 million at the end of fiscal 2025.
At the end of fiscal 2025, the company repurchased nearly 0.44 million shares of its common stock for $118.5 million and repaid $200 million of term-loan borrowings. Moreover, it hiked its quarterly dividend by 13% to 17 cents per share.
Acuity Fiscal 2026 Guidance
For fiscal 2026, Acuity expects net sales between $4.7 billion and $4.9 billion (indicating growth from $3.84 billion reported in fiscal 2024), with adjusted EPS in the range of $19-$20.50 (depicting growth from $15.56 reported in fiscal 2024). The focus remains on maintaining a balance between growth and margin expansion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Acuity has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock has a grade of B on the value side, putting it in the top 40% 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 downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Acuity has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Acuity, Inc. (AYI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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