Acuity Brands Reports Fiscal 2020 Second Quarter Results
ATLANTA, April 2, 2020 - Acuity Brands, Inc. (NYSE: AYI) (“Company”) today announced results for the second quarter ended on February 29, 2020. Second quarter net sales were $824 million, a decrease of 3.5% compared with the year-ago period. Gross profit margin of 41.7% increased 260 basis points from the prior-year period. Operating profit margin of 9.9% declined 130 basis points and adjusted operating profit margin of 12.3% declined 90 basis points from the prior-year period. Diluted earnings per share (EPS) of $1.44 declined 13.8% and adjusted diluted EPS of $1.84 declined 7.5% from the prior-year period. For the six months ended February 29, 2020, cash flow from operations increased $26 million, or 14.0%, from the prior-year period to $215 million.
Neil Ashe, President and Chief Executive Officer of Acuity Brands, commented, “Results for the second quarter were a combination of continuing trends with some signs of improvement. We are embarking on the next generation of Acuity Brands while at the same time we are dealing with the shocks caused by the COVID-19 pandemic. We are focused on the health and well-being of our associates while aggressively managing the risks and opportunities that the COVID-19 shocks present to the Company. We enter this period with a strong balance sheet and a strong team.”
Fiscal 2020 Second Quarter Results
Fiscal 2020 second quarter net sales of $824 million decreased 3.5% compared with the prior-year period due primarily to a 7% decrease in volume, partially offset by a contribution from acquisitions of approximately 3%, and a 1% net favorable change in price and mix of products sold (“price/mix”). Management estimates that price/mix was impacted by a favorable shift in sales channel mix, partially offset by an unfavorable mix of products sold.
Gross profit for the second quarter of fiscal 2020 increased $10 million to $344 million compared with $334 million in the prior-year period due primarily to the contribution from acquisitions, lower costs for certain inputs, and favorable price/mix. These increases were partially offset by lower sales volume and increased tariffs. Fiscal 2020 second quarter gross profit margin of 41.7% increased 260 basis points compared with the prior-year period’s gross profit margin.
Selling, distribution, and administrative (“SD&A”) expenses for the second quarter of fiscal 2020 totaled $261 million, an increase of $23 million, or approximately 9.8%, compared with the prior-year period. The increase in SD&A expense in the second quarter was due primarily to the addition of costs from acquired businesses, increased commissions, higher professional fees, and higher variable incentive compensation. Adjusted SD&A expenses for the second quarter of fiscal 2020 totaled $242 million, an increase of $20 million, or 8.9% compared with the prior-year period.
Operating profit for the second quarter of fiscal 2020 was $81 million, or 9.9% of net sales, compared with $96 million, or 11.2% of net sales, for the prior-year period. The decrease in operating profit was due to higher SD&A expenses and increased special charges, partially offset by higher gross profit. Adjusted operating profit for the second quarter of fiscal 2020 was $102 million, or 12.3% of net sales, compared with $112 million, or 13.2% of net sales, for the prior-year period.
Net sales for the first six months of fiscal 2020 were $1.66 billion compared with $1.79 billion reported for the prior-year period, a decrease of $128 million, or 7.2%. Operating profit for the first six months of fiscal 2020 was $165 million compared with $212 million for the prior-year period, a decrease of $47 million, or 22.3%. Operating profit margin for the first six months of fiscal 2020 decreased 200 basis points to 9.9% of net sales compared with 11.9% of net sales in the year-ago period. Net income for the first six months of fiscal 2020 was $114 million, a decrease of $32 million, or 21.7%, compared with $146 million for the