Acuity Brands' (AYI) Q1 Earnings Miss Estimates, Decline Y/Y
Zacks Investment Research | Jan 09, 2020 08:52PM ET
Acuity Brands, Inc.’s (NYSE:AYI) shares declined nearly 14% on Jan 9, 2020 after it reported lower-than-expected first-quarter fiscal 2020 results. Notably, the company believes that overall market conditions will remain sluggish in the rest of fiscal 2020 due to persistent economic uncertainties stemming from global trade issues and tariffs.
Delving Deeper
In the quarter under review, adjusted earnings came in at $2.13 per share that lagged the Zacks Consensus Estimate of $2.17 by 1.8%. Earnings also declined 8.2% from the year-ago quarter’s reported figure of $2.32. The downside was primarily caused by lower adjusted pretax income, partially offset by a lower effective tax rate as well as average shares outstanding.
Net sales during the quarter totaled $834.7 million, which missed the consensus mark of $881 million by 4.4%. Also, the reported figure declined 10.5% from $932.6 million in the prior-year quarter. The downside was caused by 16% fall in volumes, partially offset by 3% positive impact of price/mix changes and approximately 2.5% contribution from acquisitions.
Operating Highlights
Adjusted gross margin improved 330 basis points (bps) to 42.8% on a year-over-year basis, highest in the last 12 quarters, despite lower volume. The upside can be attributed to favorable sales channel mix and productivity improvements.
Adjusted selling, distribution and administrative or SD&A expenses — contributing 28.5% to net sales — grew 330 bps from the year-ago quarter’s figure. This was caused by increased acquisition-related operating costs. Adjusted operating profit margin came in at 14.3%, down 10 bps year over year.
Financials
As of Nov 30, 2019, Acuity Brands had cash and cash equivalents of $266.6 million compared with $461 million at the end of fiscal 2019. In fiscal first quarter, cash provided by operating activities totaled $129.6 million compared with $131.8 million in the prior-year quarter.
Acuity Brands Inc Price, Consensus and EPS Surprise
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