Acuity Brands, Inc.(NYSE: AYI) stock delivered a net sales rise of 3.5% yoy to $957.6 million in the fourth quarter of the fiscal year of 2017 driven by better volumes while Operating profit enhanced 13% yoy to $152.7 million. Net income surged 9% yoy to $90.5 million while diluted EPS enhanced 14% yoy to $2.15 during the quarter. Better market adoption of LED-based products during the fourth quarter of fiscal 2017 drove the performance which represented over two-thirds of the Company’s total net sales.
On the other hand, their gross profit margin fell 100 basis points to 42.5 percent during the fourth quarter. But their adjusted operating profit margin enhanced 150 basis points during the quarter to 18.4 percent from pcp driven by fall in adjusted SD&A expense on the back of falling incentive compensation expense that was partially offset by ongoing investment in further headcount to support and drive the Company’s tiered solutions strategy. Meanwhile, Acuity Brands recently launched Atrius™ Internet of Things (“IoT”) platform and software solutions which also contributed to the solid adjusted operating profit margin. The group reported that the sales in Tier 3 & 4 categories, rose over 30 percent which currently represents 15 percent of their overall sales.
Acuity Brands management reported that they expect a positive profitable growth in the long term. But they are wary regarding on revamping condition of their end-markets in the coming few quarters hurt by several facts like labor shortages in the construction industry and uncertainty related to infrastructure spending as well as federal tax and trade policies.
They forecast a volatility in demand among certain sales channels and geographies, including possible short-term volatility on the back of the recent hurricanes that hit Florida, Texas, and Puerto Rico.
On the other hand, the group forecast a better lighting and building management solutions in the North American market which includes renovation and retrofit activity and forecast a rebound in the second half of the year. Their strategies would enable them to outperform the growth rates of the markets for new construction and renovation projects, expansion into underpenetrated geographies and channels, and growth from the continued introduction of new lighting and building management solutions.
AYI stock opened weak in the morning and generated over 5.2% this morning (as of 1:30PM EDT on October 4th, 2017; Source: Google finance)