Lighting Sales Dip Slightly–No mention of Tariffs in Press Release
Acuity, (remember they are no longer Acuity Brands), reported solid results for its second fiscal quarter ended 28 February 2025 with a small dip in sales as compared to the same quarter last year. While overall sales and adjusted earnings rose, the company saw pressure on its GAAP profit margins due to acquisition-related costs and a shifting revenue mix. While the company delivered improved adjusted earnings, GAAP margins faced pressure due to acquisition-related costs and changes in revenue mix.
CEO Comments and Tariff Discussion
“We delivered steady performance in the second quarter,” said Neil Ashe, Chairman, President, and CEO of Acuity. “We grew net sales, expanded our adjusted operating profit and adjusted operating profit margin, and we increased our adjusted diluted earnings per share.”
Because of the timing of the earnings release, Neil Ashe is expected to be one of the first CEOs of a publicly traded company to address investor concerns surrounding new tariff impacts.
Segment Performance Highlights
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Acuity Brands Lighting (ABL): The company’s core lighting segment experienced a slight sales decline. Net sales for ABL were $840.6 million, down 0.3% compared to Q2 of 2024. However, operating profit increased by 3.4% to $130.3 million, while adjusted operating profit rose to $141.3 million—a 3.6% gain. Adjusted margins improved to 16.8%, up 60 basis points.
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Acuity Intelligent Spaces (AIS): AIS recorded impressive growth, with net sales skyrocketing 152% to $171.5 million, largely driven by $95.1 million in revenue from QSC. Adjusted operating profit more than doubled to $32.0 million. However, AIS’s GAAP margins fell due to amortization and acquisition costs.
Cash Flow and Capital Strategy
Acuity generated $191.6 million in cash from operations in the first half of fiscal 2025. The company increased its dividend by 13% to $0.17 per share and executed $22.6 million in share repurchases, totaling around 68,000 shares.
The QSC acquisition significantly reshaped Acuity’s balance sheet, bringing total intangible assets and goodwill to over $2.5 billion. The deal underscores Acuity’s strategic evolution from a traditional lighting manufacturer to a provider of smart space technologies.
Headwinds Remain
Despite strong adjusted results, GAAP earnings per share fell 13.7% to $2.45, weighed down by higher interest expenses and acquisition-related amortization.
Acuity appears committed to long-term transformation and growth, even amid short-term profitability pressures and global trade uncertainty.
Go Deeper: Tariff Discussion on Acuity’s Investor Call