Acuity Brands, Inc. ($AYI) Earnings (Q2 FY22)

Acuity Brands, Inc. ($AYI) Earnings and Opinion:


Acuity Brands is a company in the Industrials sector and operates in the Electrical Equipment and Parts industry. The company provides lighting and building management solutions both in the United States and Internationally. Acuity Brands was incorporated in 2001 and is currently headquartered in Atlanta, Georgia. The company was introduced on the stock market in 2001.

Acuity Brands, Inc. EPS and Revenue (Q2 FY22):

  • EPS (Non-GAAP) of $2.57 beating expectations of $2.31
  • Revenue of $909.1M beating expectations of $897.5M
  • EPS was up 21.2% (YOY) and Revenue was up 17.1% (YOY)
Acuity Brands, Inc. Segment Highlights:
  • Gross Profit of $379.3M, an increase of 12.7% (YOY)
  • Gross Profit Margin was 41.7%, they were able to adjust to the rising costs of materials and freight by increasing their prices and improving products and productivity.
  • Net Income of $75.3M, an increase of 19.7% (YOY)
Opinion:
Shares of Acuity Brands are currently trading higher pre-market, due to the fact that they were able to beat expectations during Q2 of their 2022 fiscal year. Acuity was able to make some huge adjustments with their business and shave off increasing costs by doing some increasing of their prices themselves. During the last quarter Acuity decided to ramp up their product costs while increasing the productivity and the product quality. This allowed for them to bring in some strong numbers and show a little bit of growth in their business. I want to highlight the area of Gross Profit Margin, they were able to keep the GPM relatively steady even when adjusting for rising costs in materials and freight. You have to commend businesses when they can accomplish this feat, as well as when they are able to grow revenues and Net Income at decent rates, you can only be happy if you're a shareholder of this company. However, it will be interesting to see how well they can retain customers after increasing the prices of their products. If they're able to keep them around, then this company has some solid upside, but if the customers turn to cheaper alternatives, then it seems as if the business could lose a little steam. In my opinion, I see this as an industry-wide problem with rising material and freight costs, so I'm sure the buyers of products from this industry understand these issues. With that being the case, I can see why customers will stick with Acuity and not go elsewhere to get their materials. Personally, I do not own any portion of this company, nor have I ever really looked into it. It seems like a fairly decent stock, trading at mediocre valuations. It doesn't seem to have a lot of debt outstanding, but I'd like to see cash grow a little bit more. I think the dividend yield is pretty low, so if you're looking for income out of this stock, it might be best to find it in another company. I think this stock could be a buy, but I am going to personally stay away from it and take my money elsewhere.


*Information from Yahoo Finance, Acuity Brands, and Nasdaq
*Estimates attained from Zacks

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