Acuity Brands Sharpens Its Vision of the Future
Acuity Brands Inc. (NYSE:AYI) saw second-quarter 2022 profit and sales climb versus last year, fueled by price hikes to counter rising costs.
The Atlanta-based industrial technology company announced on Tuesday net sales of $909.1 million for the three months ended Feb. 28, an increase of $132.5 million, or 17.1%, compared to the same period in fiscal 2021. Diluted earnings per share were $2.13, an increase of 22.4% over the prior year.
At noon on Tuesday, the stock was trading at $173.23, down 6.40% or $11.85 per share.
Executives noted that the impressive 13% gain in gross profit was due not just to revenue growth, but also via necessary product price hikes and boosted productivity.
While acknowledging the company has underwhelmed in its performance thus far this year, Wall Street is trying to get a clearer bead on what lies ahead. There are, Zacks Equity Research noted early Tuesday, no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook The current consensus EPS estimate is $2.94 on $966.5 million in revenues for the coming quarter and $11.74 on $3.85 billion in revenues for the current fiscal year.
"I am proud of the strong performance delivered by our team through the second quarter of fiscal 2022, Neil Ashe, chairman, president and CEO of Acuity, said. "Our focus on service and product vitality has allowed us to meet current customer demand while also investing in the long-term growth and transformation of our company."
The gross profit of $379.3 million for the second quarter increased $42.6 million, or 12.7%, over the year-ago quarter, the company said. This increase was driven by revenue growth as well as the company's ability to offset the significant increase in material and freight costs through price increases and product and productivity improvements. Gross profit as a percentage of net sales was 41.7%, a decrease of 170 basis points from 43.4% over the prior year but flat sequentially over the first quarter.
The operating profit of $102.3 million increased $11.3 million, or 12.4%, over the prior-year quarter as Acuity continued to leverage operating expenses. Operating profit was 11.3% of net sales, a decrease of 40 basis points from 11.7% last year. The operating margin decrease was driven by the year-over-year decrease in gross margin, partially offset by the leveraging of operating expenses.
Acuity's adjusted operating profit of $122.6 million increased $13.7 million, or 12.6%, over the prior-year period. The adjusted operating profit was 13.5% of net sales, a decrease of 50 basis points from 14% a year ago.
Net income of $75.3 million increased $12.4 million, or 19.7%, over the prior year. Diluted earnings per share of $2.13 increased 39 cents, or 22.4%, from $1.74.
Adjusted net income of $91 million increased $14.3 million, or 18.6%. Adjusted diluted earnings per share of $2.57 increased 45 cents, or 21.2%, from $2.12.
This article first appeared on GuruFocus.
