Acuity Brands, Inc. held their earnings call today, March 31st. The earnings call detailed a strong performance from Acuity and pleased investors, with their stock price increasing by 9% after the call. Below are key details from the call:
- Acuity is now targeting above 42% gross margin. This margin is the highest in the industry. Acuity has been above 40% for the past 8 quarters, leading to their confidence in targeting +42%.
- Acuity had already announced a price increase back on January 6th, 2021, but the price increase has not helped their earnings yet. Acuity expects the price increase will help their earnings in Q3 and Q4. In addition, they believe the price increase will help with their +42% gross margin goal.
- Lower travel expenses. The lower expense has helped in their margin goals and will only allow essential travel for the rest of the year.
- Reinvestment strategy. Acuity has purchased almost 10% of their outstanding shares since May of 2020.
- Acuity talked about their northeast rep situation. They have closed their internally owned agency and are now working with an independent rep. More details can be read here. Mr. Ashe confirmed that the company-owned agency had issues because some lighting designers like to specify non-Acuity products. The independent will offer non-Acuity lines. He also emphasized Acuity’s support for independent reps.
Acuity did not go into much detail about the global shipping and supplies shortage, but we learned after the call that management has been on conference calls with regional managers and reps warning of upcoming shortages due to component availability issues.