Vigorous small and medium-sized commercial projects and a shift to lower-cost equipment in the large commercial market are shaping fortunes in the lighting fixture market, according to comments in the latest earnings release from fixture giant Acuity Brands, Inc., Atlanta.
Acuity announced fiscal 2019 first quarter net sales of $932.6 million, an increase of $89.8 million, or 10.7%, compared with the year-ago period. Operating profit for the first quarter slipped 3.2% to $116.4 million, while net income rose 11.3% to $79.6 million. (The increase in net income resulted primarily from a lower provision for income taxes.)
“Net sales through our independent sales network, which historically comprises approximately 70 percent of our total net sales, were up 10 percent in the first quarter compared with the year ago period, primarily as demand for lighting solutions used in small and medium sized lighting projects improved as well as continued strong growth for our building management solutions,” said Vernon Nagel, chairman, president, and CEO of Acuity Brands. “This was partially offset by continued weak demand for larger non-residential lighting projects as well as continued product substitution to lower priced alternatives for certain lighting products.”
Nagel said price increases to offset rising costs in materials and tariffs on goods and components sourced from China affected the quarterly results but it was impossible to quantify how much of the increased revenues were due to buyers trying to get ahead of tariff implementations.
Looking ahead, Nagel said the company remains cautiously optimistic about fiscal 2019. “We continue to believe the lighting and lighting-related industry as well as building management systems have the potential to experience solid growth over the next decade, particularly as owners and users of lighting equipment and buildings see the potential to transform those investments into strategic assets by deploying our distinctive solutions. We believe we are uniquely positioned to fully participate in this exciting industry.”