Acuity Brands (AYI) Repurchases 2 Million Of Its Shares

Acuity Brands, Inc.’s (NYSE:AYI) recently completed the previously authorized share repurchase program. The repurchases represent a reduction of approximately 5% or 2 million shares of the company’s common stock. As of Mar 30, 2017, the company had approximately 44.1 million shares outstanding.

Share repurchases benefit the company’s earnings per share, book value as well as shareholder equity as it reduces the number of shares outstanding. Thus, share buyback programs raise optimism among investors and boost their confidence in a stock. Also, the company’s strong capital position is reflected in its regular share repurchases.

Acuity Brands strong balance sheet provides it with the financial flexibility to undertake shareholder-friendly initiatives. Cash and cash equivalents, as of Feb 28, 2016, were $463.2 million, up from $413.2 million in fiscal 2016.

Management believes that the repurchase is in line with Acuity Brands’ long-term goal of enhancing shareholder value while continuing to serve customers and grow its business, organically and through acquisitions.

The company expects the North American lighting market to return to growth in fiscal 2018. It expects to consistently outperform growth rates in markets that it serves by executing strategies focused on new construction and renovation projects, expansion into underpenetrated geographies and channels, and growth from continued introduction of lighting and building management.

Notably, Acuity Brands’ earnings per share lagged analysts’ expectation in all of the trailing four quarters, with an average negative surprise of 5%. Also in the second quarter of fiscal 2017, adjusted earnings of $1.65 decreased 2.9% on a year over year basis. We note that shares lost around 16.6% year to date, on par with the Zacks categorized Building Products - Lighting Fixtures industry’s fall.



Meanwhile, estimates for the current year and the next have moved down for the company over the last 60 days. We expect the share buyback to benefit the company’s EPS and lift up the market value due to reduced number of shares outstanding.

Zacks Rank & Peer Releases

Acuity Brands carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

D.R. Horton, Inc. (NYSE:DHI) exhibited an impressive performance in the second quarter of fiscal 2017, with earnings and revenues beating the Zacks Consensus Estimate by 1.7% and 5.2%, respectively.

NVR, Inc. (NYSE:NVR) reported first-quarter 2017 earnings of $25.12 per share, surpassing the Zacks Consensus Estimate by 27.3%. The reported figure rose 59% from the year-ago profit level.

Louisiana-Pacific (NYSE:LPX) reported adjusted earnings per share of 33 cents in the first quarter of 2017, beating the Zacks Consensus Estimate by 6.5%.

Net sales of $610.9 million in the quarter surpassed the Zacks Consensus Estimate of by 5.7%.

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