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Acuity Brands shares are looking a bit dim today after the company reported fiscal Q1 (Nov) results. While AYI beat on EPS, the upside was notably narrower than in the prior two quarters, tempering enthusiasm. Revenue increased 20.2% yr/yr to $1.14 bln, roughly in line with expectations. Importantly, management reaffirmed FY26 guidance, calling for adjusted EPS of $19.00--20.50 and revenue of $4.7--4.9 bln.

• Acuity operates through two segments: Acuity Brands Lighting (ABL) and Acuity Intelligent Spaces (AIS).
• ABL revenue grew 1% yr/yr to $895.1 mln, driven mainly by growth in its independent sales network. The sales network benefited from an elevated backlog, as customers accelerated orders ahead of tariff-related price increases in the back half of FY25, which favorably impacted Q4 and Q1.
• Despite these benefits, ABL continues to face a tepid lighting market, as customers await clarity around interest rates, inflation, and policy.
• AIS revenue surged 250% yr/yr to $257.4 mln, driven largely by the QSC acquisition, which added a cloud-manageable audio, video, and control (AVC) platform. AIS also benefited from the same tariff-related backlog pull-forward, boosting results in Q4 and Q1. Management highlighted AIS's expanding footprint across end markets ranging from amusement parks and theaters to universities, healthcare facilities, stadiums, and offices.

Briefing.com Analyst Insight:

AYI's Q1 results were solid on the surface, but the narrowing degree of EPS upside compared to recent quarters explains today's muted reaction. Both segments benefited from tariff-driven order acceleration, which helped mask ongoing softness in the core lighting market and inflates growth comparisons for AIS following the QSC acquisition. While management deserves credit for reaffirming FY26 guidance and executing well in a challenging demand environment, investors may remain cautious until there is clearer evidence of a sustained recovery in the lighting market and more organic momentum within AIS. For now, the results feel steady rather than inspiring.