AYI: PAA Research's September 2024 Lighting Agent Survey

The report below outlines feedback from our latest survey of lighting agents across the country.

PAA Research’s Fourth Quarter 2023 Lighting Agent Survey - How long can AYI sustain record gross margins with pricing...

PAA Research surveys lighting agents across the country on a semi-annual basis.  The latest survey was conducted in the first two weeks of December.  17 lighting agents responded to our...

AYI: Riding Three Unsustainable Trends; The Threat of Mean Reversion (or Worse) in Gross Margins Looms Large

Heading into 2023, we thought the broader industrial complex would be fertile ground for short ideas, particular those companies that generated meaningful revenue, earnings, and cash flow growth through...

AYI: Customer Incentives Are Growing Rapidly, Price Reductions Could Come Next

Is anyone else tired of hearing the phrase “product vitality” from this management team?  There were 10 references to “product vitality” during AYI’s 1Q23 earnings conference call, which means if you were...

AYI: PAA Research's 4Q22 Lighting Agent Survey - Here Comes the Slowdown

Attached is a report outlining feedback from lighting agents across the United States. It appears the lighting industry is headed towards a significant slowdown and the pricing gains that have driven growth for the past 18-24 months are fading...

AYI: The Topping Process Starts with Growth Quality Issues

We imagine that many AYI bulls are highly disappointed with the stock price action in response to what appeared to be on the surface a “blowout” quarter for the company.  However, upon further review, perhaps the quarter wasn’t as strong...

AYI: Downplaying Price Increases When You’re a Supply Chain Disruption Winner

“So some of the backlog will have different impacts of the price increase. So we had our first price increase announced in March, which was impacting late in the fourth quarter, very, very little, and we saw some of that realization...

AYI: Lighting Agent Survey - How Long Can Pricing Hold Up?

AYI: When Mix Shift Is Your Gross Margin Expansion Story

“Given our current gross profit margin improvement, we think that we can achieve the gross profit of above 42% for the balance of the fiscal year.” Karen Holcom, Senior VP and CFO, Acuity Brands, Inc. 3/31/21. 2Q21 Earnings Conf. Call For...

AYI: Squashing UV-C and Gross Margin Expansion Hopes

“So I am increasingly confident that this [UV-C anti-germicidal lighting] is a long-term product portfolio opportunity, not a point-in-time product portfolio opportunity. None of us can quantify how much that is yet. So good news is it's a -- it appears to...

AYI: 4Q20 Lighting Agent Survey Suggests Neither UV-C, Nor Biden Can Save the Lighting Industry

Below please find a link to a powerpoint presentation outlining the results of our latest survey of lighting agents across the country.  

AYI: Things Will Likely Get Considerably Worse Before They Get Better (If Ever)

“Acuity is selling at levels below the importers.” Lighting Agent. June 2020 Even though AYI beat our EPS estimates handily in the quarter, the primary discussion surrounding the company’s business and dynamics...

PAA Research's Summer 2020 Lighting Agent Survey: AYI's Pending Earnings Devastation - When a Secularly Challenged...

The attached report outlines the feedback from our latest survey of lighting agents.  The economic downturn has exacerbated what already were significant secular challenges for AYI.  Sales...

AYI: What’s the Cost of a Digital Transformation? For Shareholders, It Could Be a Lot; Our Revised Estimates

               “The recent revenue trends, however, will not fix themselves. There has been industry deflation. We have additional...

AYI: A perfect storm of demand destruction and continued competition from Asian imports has emerged; Lowering AYI Price...

This note represents the first of what will be a series of reports that we will publish in the coming weeks backed by surveys across a variety of industries.   While there are many...

AYI: PAA Research's Fourth Quarter 2019 Lighting Agent Survey

Below is a link to a report outlining the findings from our 4Q19 survey of lighting agents. There are five critical conclusions that we want to point out: The efficacy of the 2H18 and early 2019 list price increases has eroded meaningfully The...

AYI: How Does This Get Better? Lowering Price Objective to $79

               “…we feel it is important for all investors and analysts to understand that we believe our net sales could be down modestly in this coming fourth quarter...

AYI: Game Over – Acuity’s Growth Days Are Gone

With all due respect to AYI management, there was nothing ridiculous about the (-11%) sell-off in AYI shares this morning.  Obviously we are in the minority here, as the stock rallied 3-4 to close down a more meager -8%.   Based on our checks with...

AYI: Quickly Passing Through the Eye of the Storm - Pricing Pressure and Asian Competition Are Re-Emerging As the...

Attached please find a slide deck outlining the feedback from our latest survey of lighting agents.

AYI: A Question of Quality as Management Simply Makes It Up as They Go Along

Well, let’s chalk today’s price action to yet another example of the difficulties of predicting near term gyrations in any given stock.  Even with PERFECT information, we would not have predicted that AYI shares would rally 9%...

AYI: 4Q18 Lighting Agent Survey - List Price Increases Have Not Been a Cure All for the Lighting Industry

List price increases are not a cure all for the lighting industry as the overwhelming secular trends weigh heavily

AYI: When Does “A Bit of Pressure” Equate to 350 bps? Lowering Price Objective to $89

“We are certainly seeing a bit of headwind in material cost, largely around the commodity metals, steel, aluminum, both of which -- more from a secondary impact of the tariffs. We don't purchase that much steel that are...

PAA Research's Second Quarter 2018 Lighting Agent Survey

More of the same on the pricing front as structural disruption in the channel continues and agents increasingly question the duration of the led cycle...

AYI: The Lighting Industry Is Under Siege and Management is Grasping for Straws, Can Tax Reform Be AYI’s Obi Wan?...

“I’m not an economist so I don’t have a crystal ball” Vernon Nagel, Chairman, President, and CEO. Acuity Brands Inc. 1/9/18. 1Q18 earnings conf. call Finally, a...

AYI: Nowhere to Hide - PAA Research's Fourth Quarter Lighting Agent Survey

PAA Research surveys lighting agents across the country on a semi-annual basis.  The latest survey was conducted in the first few weeks of November.  35 lighting agents responded to our survey.     

AYI: Time to Turn Out the Lights? The LED Adoption Cycle Could Be Cresting

“We are often asked about the vitality and conditions of the key end markets we serve. We now know that the overall growth rate of the lighting market over the last 2 quarters was essentially flat and even slightly down compared with the...

AYI: As Management Makes It Up as They Go Along, It’s Becoming Clear This Is No Longer a Growth Company

For some investors and analysts, today was yet another grand exercise in banging your head against the wall, which some have affectionately (or not so affectionately) called short selling.  We recognize why...

AYI: Product Price Deflation Has Become the Dominant Trend in Lighting - PAA Research's 2Q17 Lighting Agent Survey

There has been a great deal of discussion in the investment community over the past 6-12 months about the slowdown in the lighting equipment industry.  Many investors as well as the lighting equipment...

AYI: Management Has a Vision, Just Not a Clear One, Lowering Price Objective to $108

Truth be told, we’ve all seen this happen before: A management team gets praised for consistently beating numbers and its “long term vision” for the company during the early stage of a product/economic cycle. ...

AYI: Time Is on Our Side as AYI Enters the First Phase of “Re-Rating”; Lowering Price Objective to $129

When we first introduced AYI as a short idea approximately 9-months ago, the largest pushback on the merits of our investment thesis related to the perceived quality of the company’s management team. ...