Acuity Brands, Inc. Q4 FY2025 earnings call

• Neil Ashe noted fiscal 2025 fourth quarter performance was strong with growth in net sales, adjusted operating profit, margin, and adjusted diluted earnings per share. ABL delivered sales growth and improved margins driven by strategy execution, supply chain adaptability, productivity efforts, and product development. Launched care collection and Nightingale range in health care. • Karen Holcom discussed strong fourth quarter performance for total Acuity, growth in both segments, non-GAAP adjustments including noncash charge from pension plan derisking and one-time tax benefit, cash flow performance, and capital allocation including acquisitions, dividend increase, and share repurchases. • Neil Ashe highlighted Acuity's transformation, values, and focus on growth in ABL (product vitality, service levels, technology use, productivity) and AIS (making spaces smarter, safer, greener with unique technologies).

For Acuity Brands Lighting (ABL): Fourth quarter sales were $962 million, up $7 million or 1% vs prior year. Adjusted operating profit increased $22 million to $194 million, with adjusted operating profit margin of 20.1% (up 210 basis points). For Acuity Intelligent Spaces (AIS): Fourth quarter sales were $255 million, up $171 million. Atrius and Distech combined grew ~13%, QSC grew ~15% y-o-y. Adjusted operating profit in AIS was $55 million with margin of 21.4%. Total Acuity: Fourth quarter net sales $1.2 billion, up $177 million or 17% vs prior year. Adjusted operating profit $225 million, up $47 million or 26% vs prior year. Adjusted operating profit margin 18.6% (up 130 basis points vs prior year).

• For full year fiscal 2026, total net sales expected to be in range of $4.7 billion to $4.9 billion. ABL to deliver low single-digit sales growth, AIS to generate organic sales growth in low to mid-teens. • Adjusted diluted earnings per share expected to be in range of $19 to $20.50. • ABL pricing actions to offset tariff dollar impact in low- to mid-single digits. • AIS focused on growth in low to mid-teens with continued margin expansion opportunity, but will invest for growth which may impact near-term margin but long-term direction is higher margins.

• Impact of tariff costs and corresponding price increases on margins. • Volatility in corporate accounts business which is reliant on capital decisions of concentrated customers. • Elevated inventory levels due to higher cost of inventory and inventory brought in to protect from increasing tariffs.

Q: Chris Snyder asked about M&A pipeline and attractive categories in smart building ecosystem.

A: Neil Ashe said there's a consistent pipeline of potential acquisitions to expand AIS portfolio both organically and via acquisitions.

Q: Timothy Wojs asked about milestones in integrating AIS front and back of house.

A: Neil Ashe said each business will continue organic development, products will be commingled in implementation, and end users will see new capabilities from combined solutions.

Q: Ryan Merkel asked about market conditions and ABL guidance.

A: Neil Ashe said market conditions are tepid, ABL's low-single-digit growth for 2026 assumes more from Acuity than the market.

Q: Joseph O'Dea asked about QSC margins and cost actions.

A: Karen Holcom said QSC margins have improved and will continue to expand over time, Neil Ashe discussed sourcing changes to reduce China exposure and productivity efforts in ABL.

Q: Christopher Glynn asked about competitive momentum in commercial RFP environment.

A: Neil Ashe discussed new verticals, strong performance of Contractor Select portfolio, and specifier brands taking share.

Q: Brian Lee asked about margins in ABL and AIS.

A: Neil Ashe said ABL will continue margin expansion via productivity and mix, AIS is focused on growth with margin expansion over time.

Q: Jeffrey Sprague asked about tariff situation and inventories.

A: Neil Ashe said tariffs are mitigated via sourcing and pricing strategies, Karen Holcom said inventory levels will play down over 2026 as higher cost and tariff-protective inventory is addressed.