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Nov 30, 2019
Acuity Brands Q1 2020 Earnings Report
Acuity Brands reported a decrease in net sales and net income for the first quarter of fiscal year 2020, with net sales decreasing by 10.5% and net income decreasing by 28% compared to the year-ago period.
Key Takeaways
Acuity Brands reported a decline in first-quarter net sales by 10.5% to $834.7 million compared to the previous year, which was greater than expected due to weaker market demand. Net income also decreased by 28% to $57.0 million, and diluted earnings per share (EPS) decreased by 27% to $1.44. The company is implementing streamlining actions to reduce operating costs in response to the uncertain market environment.
Net sales decreased by 10.5% compared to the year-ago period, totaling $834.7 million.
Operating profit decreased by 28% compared to the year-ago period, totaling $83.6 million.
Net income decreased by 28% compared to the prior-year period, totaling $57.0 million.
Diluted earnings per share (EPS) decreased 27% to $1.44 compared with the year-ago period.
Forward Guidance
Acuity Brands anticipates continued market challenges due to global trade issues and tariffs, expecting sluggish market demand for lighting products until there is more clarity; the company is focused on outperforming core market growth rates, increasing margins through a richer product mix, and leveraging fixed costs to improve profitability.
Positive Outlook
- Improvement in the Dodge Momentum Index, which could be a positive indicator for market demand for lighting in the latter half of this calendar year.
- Focus in fiscal 2020 is to outperform the growth rates of the core markets.
- Increase margins by selling a richer mix of products and solutions as we execute our tiered solutions strategy.
- Leverage our fixed cost infrastructure to achieve targeted incremental margins to improve our overall profitability.
- Neil Ashe will join the Company as our next President and CEO.
Challenges Ahead
- Caution about overall market conditions within the lighting industry for the remainder of our fiscal 2020 primarily due to continued economic uncertainties caused by global trade issues, including tariffs.
Historical Earnings Impact
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