Acuity Brands (AYI) is down 15% after the company missed quarterly estimates on the top and bottom line for the third quarter in a row.
For the second consecutive quarter, Acuity said demand for its lighting solutions had slowed.
Second quarter volume slowed to 4% growth from 10% in the first quarter. Sales rose 3.5% but earnings fell 2% year-over-year. Adjusted gross profit margin of 41.7% declined 180 basis points, primarily due to higher manufacturing expenses resulting from increased wages and benefits, inbound freight costs, and quality costs.
"Acuity Brands continued to deliver sales growth while initial industry data suggests that the North American lighting market declined modestly during our fiscal second quarter, reflecting continued weakness in smaller, short-cycle projects. Additionally, sales in certain international markets, including Europe and Mexico, were down year-over-year."
The company expects to continue to outperform within its markets, but the outlook isn't all that encouraging. "third-party forecasts suggest that the softness in market demand that began in the third calendar quarter of 2016 and continued through our second quarter may persist through the remainder of our fiscal 2017. These forecasts indicate that the North American lighting market should return to growth in fiscal 2018."
Acuity has a $7.7 billion market cap. The stock is trading at a fourteen month low, testing support near its 200 day moving average just under the 174 level.