Total Net Sales and EPS Growth
Total net sales of $1.2 billion, up $19 million or 2% year-over-year. Adjusted diluted EPS of $5.31, up $0.19 or 4% versus prior year, reflecting higher profitability and fewer diluted shares.
Acuity Brands
· AYI
June 25th, 2026
Summary
- Earnings Call Date:
- 2026-06-25
- Next Earnings Date:
- 2026-10-07
Earnings Call Sentiment
PositiveThe call highlights solid execution across the company with meaningful strength in AIS (15% sales growth, strong margin expansion) and continued cash generation and disciplined capital deployment. ABL shows resilient margins but experienced a modest revenue decline and lower operating profit versus prior year. Management reported product innovation, award recognition, and market share gains (notably Distech), while noting inflationary pressures, supply risks, and earlier-season order softness that are normalizing. Overall, positive operational trends and financial flexibility appear to outweigh the near-term headwinds.
Company Guidance
Management didn’t provide formal numeric forward guidance but gave clear directional guidance and many operating metrics: Q3 net sales were $1.2B (+$19M, +2% y/y), adjusted gross margin 50.1% (+10 bps), adjusted operating profit $224M (18.7% margin) and adjusted diluted EPS $5.31 (+$0.19, +4%); ABL Q3 sales $905M (‑$18M, ‑2%; two‑year stacked +1%; independent+direct +4%), ABL adjusted gross margin 46.1% with adjusted operating profit $165M (18.2% margin) after adjusting out a $6.4M tariff refund; AIS Q3 sales $304M (+$39M, +15%), AIS adjusted gross margin 60.3% and adjusted operating profit $76M (25.1% margin, +150 bps). They reported $520M cash from operations YTD (+$121M y/y), refinanced with a new $800M five‑year revolver, repaid $200M of term debt YTD, repurchased ~766,000 shares for $230M (including ~500,000 this quarter at $281 avg), and increased the quarterly dividend by 18%. Looking ahead management said lighting demand is “firming,” expects a normal sequential Q4 increase (perhaps less steep than prior years), anticipates demand to firm over the next four quarters, and expects AIS to continue outgrowing the business and expanding margins with acquisitions prioritized to build AIS—all signaling confidence in continued margin and cash‑flow expansion rather than issuing specific numeric FY guidance.
Acuity Intelligent Spaces (AIS) Strong Performance
AIS sales of $304 million, up $39 million or 15% year-over-year. Adjusted gross profit margin of 60.3% (+10 bps) and adjusted operating profit of $76 million, up $14 million or 22.5%, with operating margin expanding to 25.1% (+150 bps).
Cash Generation and Capital Allocation
Generated $520 million of cash flow from operations in the first nine months, $121 million higher than prior year. Refinanced to a new five-year $800 million unsecured revolver, repaid $200 million of term loan year-to-date, increased the quarterly dividend by 18%, and repurchased over 766,000 shares for $230 million (including ~500,000 shares at an average $281).
Product Innovation and Industry Recognition
Launched new lighting and controls products including Beyond by Lithonia (linear high bay), CPX3P three-pane panel, Eclipse Resilience PLC controller, and preloaded Resense MOVE dashboard. Received multiple design and industry awards (Red Dot awards including Eureka Best of the Best, CSE award for Resense MOVE, EcoVadis medal, QSC recognition).
ABL Margin Resilience and Two-Year Growth
Acuity Brands Lighting (ABL) maintained strong adjusted gross profit margin of 46.1% despite softer sales; two-year stacked ABL growth of 1% and combined independent + direct sales network growth of 4%, highlighting resilience and strategic pricing/productivity gains.
Distech and AIS Market Traction
Distech is gaining share and displacing incumbents (example: Hartsfield-Jackson selection), winning OEM opportunities and entering adjacencies (refrigeration, data centers). Positioning as a platform combining edge control, cloud intelligence, and occupant experience.
Operator
Good morning, and welcome to the Acuity Fiscal 2026 third quarter earnings call. I would now like to hand the conference over to Charlotte McLaughlin, Vice President of Investor Relations.
Charlotte McLaughlin
Thank you, operator. Good morning, and welcome to the Acuity Fiscal 2026 third quarter earnings call. On the call with me this morning are Neil Ashe, our Chairman, President, and Chief Executive Officer, and Karen Holcom, our Senior Vice President and Chief Financial Officer. Today's call will include updates on our strategic progress and on our fiscal 2026 third quarter performance. There will be an opportunity for Q&A at the end of this call. As a reminder, some of our comments today may be forward-looking statements covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Reconciliations of certain non-GAAP financial metrics are available in our 2026 third quarter earnings release and supplemental presentation on our investor relations website at www.investors.acuityinc.com. I will now turn the call over to Neil Ashe.
Neil Ashe
Thank you, Charlotte, and thank you all for joining us this morning. We demonstrated solid execution in our third quarter of fiscal 2026. We grew net sales, we expanded our adjusted operating profit, and we increased our adjusted diluted earnings per share. We generated strong cash flow and allocated capital effectively. In Acuity Brands Lighting, our sequential performance improved while our margins remained strong. Our ability to drive performance in this market is a result of the execution of our strategy to increase product vitali...
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