Acuity Brands Q1 2022 Investor Call Highlights

Acuity Brands released its Q1 2022 results today along with its investor call. The call touched upon many subjects, from price increases to supply chain issues and more. Below are a few of the interesting highlights detailed in the call.

Supply Chain
Supply chain was brought up frequently throughout the call. Acuity Brands have been able to adapt to the supply chain situation better than most. Neil Ashe, CEO of Acuity Brands, stated that the company’s product vitality and ability to have products at the right place, right time, and right price have allowed them to meet customer demand. The company’s dexterity is due to them sourcing product from multiple places, notably from places outside of Asia. Ashe believes this has allowed the company to gain market share and positions themselves to weather uncertainty in the supply chain. Additionally, Ashe believes that the supply chain situation is going to be unpredictable for a while.

The company stated that prior price increases have yet to be fully realized due to seasonal changes and the current challenges in the industry. Some benefit has been seen from price increases in order to offset increasing costs, but the full benefits have yet to be seen. Ashe emphasized that they are trying to be prudent and strategic with their prices. Expect costs and prices to change throughout the year in either direction.

Market Performances
Ashe stated that all markets continue to see improvement with the exception of the retail market. The company expects that the retail market will improve later in the year. Industrial is a strong market for Acuity Brands. Hospitality has been slow to come back. One can assume this is due to omicron and other COVID variants that continue to interrupt social events and spaces. In the Q&A session of the call, a question regarding Acuity’s UV-C market was brought up. Ashe stated that the UV-C market has gained some traction with larger accounts, but it is not a game changer for the company. Rather, the development of the company’s UV-C line was an adaptation to the market environment brought on by the pandemic. Ashe also stated that the UV-C market isn’t as large as some hoped it would be.

Judging from the investor call and their published earnings, Acuity continues to position itself as a dominant force in our industry, particularly in North America. Stay tuned for Q2 highlights in a few months. Oddly, he never once mentioned the word transformation, a word that he has used many times in the past. As of this writing, the stock is up $6.43.

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