Acuity Brands Reports Decrease in Revenue for Q1 2024
Segments of revenue
Acuity Brands, Inc. (AYI) reported a decrease in revenue for the first quarter of fiscal 2024. The ABL segment, which includes all channels except the retail sales channel, experienced a decline in net sales by $70.7 million, or 7.5%, to $876.4 million compared to the prior-year period. On the other hand, the ISG segment saw an increase in net sales of $7.4 million, or 13.0%, to $64.2 million.
Despite the overall decrease in revenue, Acuity Brands' ABL segment showed an improvement in operating profit. The operating profit for ABL increased by $25.7 million to $143.8 million, representing 16.4% of ABL net sales. This increase in profitability was primarily attributed to improved profitability on lower sales, offset by increased employee-related costs. Additionally, the decrease in outstanding diluted shares contributed to higher net income.
The ABL segment's decline in net sales across all channels, except the retail sales channel, presents a challenge for Acuity Brands. This decrease in sales impacted the overall revenue performance for the company in the first quarter of fiscal 2024. Furthermore, the ISG segment experienced a decline in operating profit by $2.4 million, or 31.2%, to $5.3 million, representing 8.3% of ISG net sales. This decline in profitability may indicate potential challenges within the ISG segment.
Acuity Brands recorded $6.9 million of special charges and $4.0 million of accelerated amortization expense for intangibles associated with discontinued brands during the first quarter of fiscal 2023. This may have impacted the operating profit for the prior-year period.
Acuity Brands faced a decrease in revenue for the first quarter of fiscal 2024, primarily driven by lower net sales in the ABL segment. However, the company demonstrated strength in improving operating profit within the ABL segment, despite the decline in sales. The ISG segment experienced an increase in net sales, but a decline in operating profit. The special charges and accelerated amortization expense recorded in the prior-year period may have influenced the operating profit for that period. Overall, Acuity Brands will need to address the challenges in the ABL segment and evaluate the performance of the ISG segment to drive future revenue growth.