Acuity Tumbles After Warning of Cost Pressure on Materials
2022.04.05 20:31
By Dhirendra Tripathi
Investing.com – Acuity Brands stock (NYSE:AYI) plunged 9% Tuesday after the lighting products maker cited cost increases and shortages of raw materials as major challenges.
The company uses steel and aluminum to make its products, and prices of both of those materials have climbed to record highs in recent times in the wake of Russia’s invasion of Ukraine. A shortage of microchips is another worry for the company.
The company has also decided not to apply recent price increases to its backlog, honoring original agreements, according to MarketWatch.com. This is even as margins eroded in the second quarter.
CEO Neil Ashe told analysts in a conference call the company’s backlog rose slightly from last quarter. He said transportation costs should ease, assuming upcoming talks with labor at the West Coast ports are resolved soon.
Net sales in the second quarter ended Feb. 28 rose 17% year-on-year to top $909 million.
Adjusted diluted profit per share rose 21% to $2.57.
