Shares of Acuity Brands (AYI) were sharply lower after the lighting company said its fiscal fourth-quarter net sales could decline slightly after third-quarter sales missed analysts’ estimates.
The Atlanta-based company, which provides lights and building management solutions, reported net sales of $947.6 million in the three months ended May 31, up 0.4% from the same quarter of the prior year, but that fell short of the consensus estimate of analysts polled by Capital IQ for $969.5 million.
Acuity’s shares dropped 9.4% in late morning trading on Tuesday.
The company said an increase in sales volumes of greater than 1% was partially offset by unfavorable foreign exchange rate changes and the adoption of a new account standard, which cut revenue by $3.8 million.
Adjusted earnings per share came in at $2.53, up 6.8% from the same quarter of the prior year and ahead of analysts’ forecasts for $2.51.
For the fourth quarter, the company said net sales could be down modestly compared with the prior year, which it said had benefitted from “significant initial stocking” of product in the stores of a new customer in the retail sales channel.
It expects the fourth quarter adjusted operating profit margin will, however, exceed the prior-year margin as well as improve on a sequential basis from the third quarter.
“We remain cautiously optimistic about overall market conditions for the remainder of calendar year 2019 and do not believe that the demand outlook has meaningfully changed from our outlook provided last quarter,” Vernon Nagel, chief executive of Acuity Brands, said.