Acuity Brands Gears Up for Q4 Earnings: Things to Keep in Mind

Acuity Brands, Inc. AYI is scheduled to announce fourth-quarter fiscal 2025 results on Oct. 1, before the opening bell.In the last reported quarter, the company’s adjusted earnings topped the Zacks Consensus Estimate by 15.8% and increased 23.4% year over year. The top line beat the consensus mark by 3% and increased 21.7% from the prior year.Acuity Brands beat earnings expectations in the trailing 20 quarters.How Are Estimates Placed for AYI Stock?For the quarter to be reported, the Zacks Consensus Estimate for earnings per share (EPS) has remained unchanged at $4.60 in the past 30 days. The estimated figure indicates an increase of 7% from $4.30 per share reported in the year-ago quarter.The consensus mark for revenues is pegged at $1.2 billion, indicating a 16.8% increase from the year-ago reported figure.Factors to Shape AYI’s Q4 ResultsAcuity Brands’ earnings and revenues are expected to have increased year over year in the fourth quarter of fiscal 2025, supported by backlog conversion, continued product innovation/diversification, ongoing productivity initiatives, technological advancements and growth in Intelligent Spaces. Strong performance is anticipated from both the Acuity Brands Lighting (ABL) and Acuity Intelligence Spaces (AIS) segments.The company’s strategic focus on expanding its market presence, entering new verticals such as sports lighting, education, healthcare and infrastructure, and leveraging technology and productivity improvements has likely played a key role in driving performance in the to-be-reported quarter.Acuity Brands has benefited from its diversified portfolio of innovative lighting control solutions and energy-efficient luminaires, supported by the recent acquisition of QSC, which is already contributing strong sales growth and margin expansion. Recent product launches, including the Q-SYS Vision Suite and enhancements to the Eclypse portfolio, together with pricing actions and productivity initiatives, bode well for the company.Backlog conversion is expected to be a meaningful tailwind. Management noted that a surge of accelerated orders in the fiscal third quarter — driven by pricing actions ahead of tariff changes — created a healthy backlog. While part of this was already shipped in the fiscal third quarter, the remainder is scheduled for fulfillment in the to-be-reported quarter, providing a revenue lift that will help smooth out performance over the second half of fiscal 2025.Segment-wise, for the to-be-reported quarter, our model predicts total ABL segment revenues to decrease 0.3% year over year to $952.1 million.Within the ABL segment, we expect Independent Sales Network, Direct Sales Network and Other revenues to increase 1.6%, 1.9% and 1%, while expect Corporate Account and Retail are anticipated to decrease 19.1% and 9.7%, respectively, year over year. Our model predicts the AIS segment’s revenues in the fiscal fourth quarter to surge 206% year over year to $256.7 million.Acuity Brands’ profitability is expected to benefit from its diversified portfolio, including Contractor Select, Design Select, and Made-to-Order offerings, alongside expansion into new verticals such as healthcare, refueling, sports lighting and infrastructure. Strategic pricing actions, cost management and accelerated productivity initiatives are likely to have aided it in boosting margins, cushioning the margin impact from tariffs and sustaining EPS growth.However, AYI’s earnings may face several headwinds. The most significant is the full impact of tariffs, which were largely absent in the prior quarter but will now flow through, creating margin dilution despite pricing actions to offset costs. Another factor is the normalization of demand following accelerated orders in the fiscal third quarter, which may leave softer volumes as customers work through inventory. The company also faces risks within its Pro Audio business under QSC, which is more exposed to China sourcing. This unit has been hit harder by tariff policy, and management warned that profitability there may remain under pressure in the near term while supply chain adjustments are underway. Weakness in this pocket could weigh modestly on overall Intelligent Spaces margins.We expect the company’s adjusted EBITDA margin to decline to 17.7% in the fiscal fourth quarter from 18.5% a year ago.What Our Model Indicates for AYI StockOur proven model does not conclusively predict an earnings beat for Acuity Brands this time around. The company does not have the right combination of the two key ingredients, a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), to increase the odds of an earnings beat.AYI’s Earnings ESP: The company’s earnings ESP is 0.00% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.AYI’s Zacks Rank: Acuity Brands currently has a Zacks Rank #2.Stocks With the Favorable CombinationHere are some companies in the Zacks  Business Services sector that, according to our model, have the right combination of elements to post earnings beats in the quarter to be reported.AppLovin Corporation APP has an Earnings ESP of +3.34% and currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.The company’s earnings beat estimates in each of the trailing four quarters, with an average surprise of 22.4%. AppLovin’s earnings for the third quarter of 2025 are expected to increase by 87.2%.Marqeta, Inc. MQ presently has an Earnings ESP of +20.00% and a Zacks Rank of 2.The company’s earnings beat estimates in three of the trailing four quarters and met on one occasion, with an average surprise being 44.2%. Marqeta’s earnings for the third quarter of 2025 are expected to increase 83.3%.APi Group Corporation APG currently has an Earnings ESP of +0.17% and a Zacks Rank of 3.The company’s earnings beat estimates in three of the trailing four quarters and met on one occasion, with the average surprise being 4.3%. APi Group’s earnings for the third quarter of 2025 are expected to increase 14.7%.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AppLovin Corporation (APP): Free Stock Analysis Report Acuity, Inc. (AYI): Free Stock Analysis Report APi Group Corporation (APG): Free Stock Analysis Report Marqeta, Inc. (MQ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks