Acuity (NYSE:AYI) reported what management described as a “strong” start to fiscal 2026, highlighting sales growth, expanding profitability, and higher adjusted earnings per share in the company’s fiscal first quarter. Executives also emphasized continued progress on product development and the integration of technologies across the company’s Lighting and Intelligence Spaces businesses, while acknowledging a “tepid” lighting market environment.
Quarterly results and margin expansion
Chief Financial Officer Karen Holcomb said Acuity generated total net sales of $1.1 billion, up $192 million, or 20%, from the prior year. Holcomb noted the increase was driven by growth in both business segments and included three months of QSC sales.
Segment performance: Lighting steady, Intelligence Spaces boosted by QSC
In Acuity Brands Lighting (ABL), Holcomb said sales were $895 million, up $9 million, or 1%, primarily due to growth in the independent sales network. She also said results were influenced by elevated backlog tied to orders that were accelerated ahead of price increases in the back half of fiscal 2025—an impact that carried into both the fourth quarter of last year and the first quarter of fiscal 2026.
ABL adjusted operating profit increased $6 million to $160 million, which Holcomb attributed to efforts to lower operating expenses. Adjusted operating profit margin for Lighting was 17.9%, up 60 basis points from the prior year.
In Acuity Intelligence Spaces (AIS), sales were $257 million, up $184 million, reflecting the inclusion of three months of QSC. Holcomb said both Atrius and Distech combined, and QSC, “grew in the mid-teens” during the quarter. Like Lighting, AIS also benefited from elevated backlog related to accelerated orders before prior-year price increases.
AIS adjusted operating profit was $57 million, with adjusted operating profit margin of 22%, up 100 basis points year over year.
Products, awards, and cross-portfolio solutions
Chief Executive Officer Neil Ashe attributed ABL performance to the “cumulative effect” of the company’s strategy to increase product vitality, improve service levels, apply technology to products and operations, and drive productivity. Ashe cited several product and market initiatives from the quarter, including:
- Lithonia EAX Area Luminaire: A new outdoor luminaire family offered in the Design Select portfolio with more than 60 configurable options, including an option to embed nLight controls.
- Nightingale healthcare lighting: Ashe said the brand won multiple 2025 Nightingale Awards from Healthcare Design Magazine, highlighting patient-centric product design. He pointed to the Aten Sconce and ASURE Night Light as examples designed to provide low-level illumination supporting sleep while enabling caregiver tasks.
- Refuel: Ashe said Acuity is expanding from canopy lighting into a more comprehensive offering by incorporating AIS products including Atrius software and Distech controls, spanning “outside to refrigeration controls in the back of the convenience store.”
- Design recognitions: Several products received Grand Prix du Design Awards and Lit Lighting Design Awards, including Cyclone Loopa and Eureka Signe, which Ashe said were recognized by both programs.
Within AIS, Ashe positioned Atrius, Distech, and QSC as complementary technologies that manage spaces and experiences, with a longer-term goal of improving productivity through data interoperability and “making spaces autonomous.” He highlighted a solution combining Distech’s Resense Move (a multi-sensor device using thermal, light, sound, air quality, temperature, and humidity sensors with AI at the edge) with QSC’s Q-SYS platform to adjust room equipment such as screens, cameras, and microphones. Ashe said the company demonstrated the solution to a large multinational technology company, which then chose to implement it across its headquarters.
Ashe also cited recognition for AIS offerings, including Atrius Facilities being named a winner in the Smart Buildings category of the 2025 Facilities Net Vision Awards, and multiple Q-SYS awards from industry groups.
Cash flow, buybacks, and debt repayment
Holcomb said the company generated $141 million of cash flow from operations in the first three months of fiscal 2026, up $9 million from the same period a year earlier, primarily due to higher profitability.
Capital allocation during the quarter included:
- $28 million used to repurchase more than 77,000 shares at an average price of about $357.
- $100 million repaid on the company’s term loan, bringing total repayments to $300 million of the $600 million in debt used to finance the QSC acquisition.
Market conditions, tariffs, backlog normalization, and outlook
Management repeatedly characterized the lighting market as “tepid,” with Ashe saying the market appears to be awaiting clarity around interest rates, inflation, and policy. On AIS, Ashe said the businesses are “disruptive” and “taking share,” allowing them to grow through market environments.
On margin dynamics in Lighting, Ashe discussed “noise” over the last several quarters, including inconsistent tariffs and the company’s responses through productivity efforts and strategic pricing actions. He reiterated the company’s longer-term target of 50–100 basis points of operating profit margin improvement per year in ABL, while cautioning that results will not necessarily rise each quarter.
Regarding the elevated backlog that benefited recent results, Holcomb said seasonality could be “skewed” in the second quarter, with Q2 potentially “down a little bit more than normal” as the impact of accelerated orders fades. Ashe added that backlog levels are now closer to pre-pandemic norms, making order rates more consistent with quarterly performance.
In response to a question about guidance, management said the company’s outlook was unchanged and that the same sales and EPS guidance provided in the fourth quarter would be included in materials posted after the call.
About Acuity (NYSE:AYI)
Acuity Brands, Inc (NYSE: AYI) is a leading provider of lighting fixtures, controls and building management solutions designed for commercial, institutional, industrial and residential markets. The company’s core offerings include a broad range of LED luminaires, lighting controls, sensors and networked building systems that enhance energy efficiency, occupant comfort and operational productivity. Acuity Brands’ portfolio spans indoor and outdoor lighting fixtures, emergency lighting, task lighting and architectural products, as well as advanced controls such as daylight harvesting, occupancy sensing and wireless sensor networks.
Beyond traditional lighting, Acuity Brands delivers integrated digital solutions through its Connected Building platform, which combines smart sensors, cloud-based analytics and mobile applications to enable real-time monitoring and remote management of lighting and environmental systems.
