Acuity Brands Inc. (NYSE: AYI) reported a 32% dip in earnings for the second quarter of 2019 due to lower income taxes as well as a shift in key customers, changes in sales channel mix, and higher input costs. The bottom line exceeded analysts’ expectations while the top line missed consensus estimates.
Net income plunged 32% to $66.3 million and earnings fell 28% to $1.67 per share. The prior year results included a tax benefit for net discrete items associated with the tax cuts and jobs act. The last year’s tax rate was lowered to reflect a lower blended year-to-date effective rate following the passage of tax cuts. Adjusted earnings increased by 5.3% to $1.99 per share.
Net sales rose 2.7% to $854.4 million, driven by growth in sales volume and favorable impacts from acquisitions. This was partially offset by unfavorable changes in product prices and the mix of products sold. Sales were negatively impacted by the pull forward of orders by customers into the first quarter in advance of price increases.
Gross profit inched down 0.2% as the contribution from higher sales volume, realized price increases, and benefits from productivity improvements were offset by both a shift in key customers and changes in sales channel mix as well as higher input costs. Gross margin fell 110 basis points due primarily to a shift in sales among key customers within the retail channel as well as changes in sales channel mix.
The company remained cautiously optimistic for the remainder of fiscal and calendar year 2019 and does not believe that the demand outlook has meaningfully changed from its outlook provided last quarter. Third-party forecasts and leading indicators continued to suggest that the North American lighting market, the company’s primary market, should grow in the low-single-digit range in fiscal 2019.
The shift in sales among key customers within the retail channel could continue to have a dampening effect on gross profit and gross margin, but Acuity Brands expects this to be largely offset by lower freight and commission costs, which are included in SD&A expenses.
Shares of Acuity Brands ended Tuesday’s regular session up 0.19% at $123.89 on the NYSE. Following the earnings release, the stock inched up over 1% in the premarket session.
Browse through our earnings calendar and get all scheduled earnings announcements, analyst/investor conference and much more!
Most Popular
Stitch Fix (SFIX) Stock: Will the innovative biz model survive virus-led slump?
The business world is still struggling to come out of the virus-induced slowdown, but it seems almost every retail segment benefited from the pandemic at some point. The vaccination drive
General Mills (GIS): Three factors that are expected to help drive growth for the food company going forward
Shares of General Mills Inc. (NYSE: GIS) were up 3.2% on Wednesday after the company delivered better-than-expected results for the first quarter of 2022. Net sales rose 4% year-over-year to
IPO Alert: Allvue Systems sets IPO terms, to raise around $290 million
It is estimated that the alternative investments industry has expanded at a compound annual rate of 10.2% over the past ten years and had $11 trillion in assets under management
