Acuity Brands Lighting Outlook: Ruth Gratzke, Pricing and Market Share
On the fiscal 2026 fourth-quarter call, Neil Ashe called Acuity Brands Lighting “the best performing lighting company in the world.” Here at EdisonReport, we have always enjoyed investor calls. The press release tells you what the company wants you to know. On the call, the CEO has to answer analysts’ tough questions on the spot, and that’s where you get the real story. Here is what the call revealed about ABL’s new president, its December price increase and its outlook for fiscal 2027.
Acuity Inc. held its fiscal 2026 fourth-quarter earnings call on 1 OCT with CEO Neil Ashe and CFO Karen Holcomb. We covered the headline numbers on Friday. Today, I’m going to focus only on Acuity Brands Lighting (ABL), since that’s the business we care about. Acuity Intelligent Spaces is an incredible story, but it’s not for today.
ABL posted fourth-quarter net sales of $959 million, down less than 1% from last year. Karen explained that the prior-year quarter was inflated by an elevated backlog after customers accelerated orders ahead of price increases in the back half of fiscal 2025. On a two-year stacked basis, ABL sales were flat, and the independent and direct sales networks combined grew 3%.
Ruth Gratzke Takes the Helm at ABL
The biggest ABL news of the quarter was a hire. Ruth Gratzke became President of Acuity Brands Lighting on 1 SEP 2026, reporting directly to Neil. She joined from Siemens, where she was President of Siemens Smart Infrastructure in the United States and CEO of Siemens Industry, Inc. She has also held senior roles at GE and Hubbell. Ruth succeeds Sach Sankpal, who is staying on for a transition period.
When Tim Wojs of Baird asked what Ruth brings, Neil took the opportunity to talk about lighting first. “Acuity Brands Lighting is the undisputed leader in North America and the best performing lighting company in the world,” he said. He noted that over the last five or six years, ABL has moved from high-30s gross margins to the mid-to-upper 40s through structural improvements.
“I chose to bring Ruth in both because of what I believe ABL can do and also what I believe she can do,” Neil said. He described a leader with experience from go-to-market through product and operations, and a record of growing large businesses materially. He called her “a perfect fit for where that business is now and where I want it to go over the course of the next five years.”
Neil also made a point I appreciated. For as long as he has been at Acuity, the industry has asked what lighting could become instead of what it is. “I think we need to celebrate what the lighting business and the lighting industry is,” he said, calling it durable and essential to every built space. Your humble editor agrees.
The December Price Increase
Joe O’Dea of Vertical Research asked about inflation and pricing. Neil confirmed that ABL announced its regular price increase in September, with the new pricing going live in December. It is part of what Neil called ABL’s normal strategic cadence of pricing, which also includes controls pricing.
Neil was careful to explain how Acuity thinks about price. “We price strategically to realize the value that our products deliver in the marketplace,” he said. Acuity does not price as a markup on inflation, but it does cover the dollar cost of supply shocks and changes in trade policy. He said ABL is seeing some inflation in commodities such as steel and in freight. Acuity addresses those costs through purchasing, product development and manufacturing productivity.
For agents and distributors, the message is simple. Pricing is mostly about value and only partly about inflation. The December increase follows the pattern we have seen from Acuity for several years.
Agents Are Gaining Share
ABL’s independent sales network grew 4% in the quarter after two flat quarters. When Brandon Knutson of Morgan Stanley asked what drove the turnaround, Neil was direct. “I would say that’s an indication of us taking share,” he said. He noted that the independent sales network represents 80 independent markets across North America, and Acuity sees the gains consistently across them.
Ryan Merkel of William Blair asked about order trends. Neil said the order rate and business climate at ABL had firmed, and he expects that to continue into next year. Acuity had just held its sales conference with its entire independent sales network and introduced new products for 2027. “It was hard to not appreciate the energy in the room,” Neil said.
On interest rates, Neil offered some perspective. Rates are now back near their 30-year average, he said, “and a lot of stuff got built in the last 30 years.”
Restructuring: One Plant Closed, Brands Trimmed
ABL recorded a $15 million special charge in the quarter, along with $32 million in tariff refunds. Acuity adjusts both out of its non-GAAP results. When Christopher Glynn of Oppenheimer asked about the charge, Neil explained that productivity gains over the last five years let Acuity adjust its manufacturing network. Acuity closed one facility and consolidated it into another. It also eliminated some smaller brands and product lines that it did not expect to contribute over the long term.
Neil said to expect more of the same. “As we drive productivity, we can rationalize our footprint because we don’t need the whole footprint anymore even as we grow,” he said. The savings should show up mostly in gross margin over time.
ABL’s adjusted gross margin was 46.2%, driven largely by product and productivity improvements. Adjusted operating profit fell $14 million to $180 million, and the adjusted operating margin dropped 130 basis points to 18.8%. Karen tied that decline to investments in technology. Neil said the higher spending will normalize, describing the fourth quarter as affected by timing and one-time items.
Data Centers and New Products
Neil said ABL had a very strong year in data centers in fiscal 2026. To build on that, Lithonia Lighting expanded the BLT family with a purpose-built luminaire for data centers. It is designed around the specialized ceiling grid systems used in those facilities. Neil expects ABL to keep getting its “unfair share” of data center lighting.
The electronics side is evolving too. Neil highlighted nLight for scalable wired and wireless controls, and SensorSwitch for simpler, contractor-preferred applications. eldoLED is making drivers configurable through its cloud-based eldoLED Studio application, using NFC technology. Six ABL products, including the SensorSwitch TLS Twist-to-Lock Sensor, were included in the IES Progress Report.
ABL Outlook for Fiscal 2027
Acuity expects ABL sales to be flat to up low single digits in fiscal 2027. Neil said Acuity expects the overall lighting market to be flat to down low single digits, so that guidance assumes continued share gains. Growth should come from new verticals, more share and growing corporate accounts. Total company guidance calls for net sales of $4.7 billion to $4.9 billion and adjusted diluted EPS of $20.50 to $22.00.
Neil also restated ABL’s long-term margin target. Acuity intends to add 50 to 100 basis points of adjusted operating margin per year. He was clear that Acuity is not counting on market growth to get there. “We are counting on our continued structural improvement in the business,” he said.
My Take
This was a confident call for the lighting side of Acuity. Sales were flat, but agents are gaining share, the order rate has firmed and a December price increase is on the way. Acuity is also closing plants and trimming brands, which tells me productivity, not market growth, is driving margins.
Ruth Gratzke inherits a strong, profitable business with a clear mandate. Neil gave her a five-year runway and a simple job: grow it. I look forward to meeting her and introducing her to our readers.
Go Deeper: Acuity Q4 2026 Earnings: Sales Up 2.9% to $1.24B | Acuity Inc. Names Ruth Gratzke President of Acuity Brands Lighting | William Blair Downgrades Acuity Brands Stock
Acuity Q4 2026 Earnings: Sales Up 2.9% to $1.24B
William Blair Downgrades Acuity Brands Stock
Acuity Q3 Earnings: Intelligent Spaces is Strong; Lighting is Soft