Acuity FY2026: GAAP EPS Up 36% to $17.05, Adjusted EPS Up 10.5%

Acuity reported two growth rates for the same year, and they are far apart. For the fiscal year ended August 31, 2026, diluted earnings per share rose 36.1% to $17.05. Adjusted diluted earnings per share rose 10.5% to $19.90. Net sales rose 6.8% to $4.64 billion and net income rose 34.0% to $531.3 million. Both EPS figures are in the company's own release. The gap between them comes from one-time items that sat on opposite sides of the two years: acquisition costs and a pension charge in fiscal 2025, and $51.3 million of tariff refunds in fiscal 2026.

One note on the source before the numbers. Acuity has not yet filed its fiscal 2026 Form 10-K. The figures for the year come from the earnings release furnished to the SEC on October 1, 2026, which says the results "are preliminary pending completion of the audit." Fiscal 2022 through fiscal 2025 come from the audited 10-Ks. The company was named Acuity Brands, Inc. until March 26, 2025, and its older filings carry that name.

The Headline Numbers​

Look at the first two rows together. Net sales rose $296.2 million and cost of products sold rose $24.0 million. So gross profit rose $272.2 million, which is 92 cents of every added sales dollar. No manufacturer earns that on new volume. Two things explain it. Cost of products sold in fiscal 2026 is stated after $51.3 million of tariff refunds. And cost of products sold in fiscal 2025 included $29.6 million of acquired profit in inventory from the QSC purchase, which did not repeat.

Selling, distribution, and administrative expenses rose 8.6%, faster than sales. They were 34.8% of net sales against 34.2% a year ago. Operating profit still rose 26.6% because the gross profit gain was more than twice the expense increase.

Below operating profit, miscellaneous expense fell from $41.7 million to $7.4 million. The fiscal 2025 10-K says that year's figure was "due primarily to the recognition of $30.9 million for non-cash pension settlement charges." Its absence added about $31 million to pre-tax income without any change in the business.

Revenue Deep Dive​

Acuity reports two segments. Acuity Brands Lighting (ABL) makes lighting and lighting controls. Acuity Intelligent Spaces (AIS) sells building management systems, software and, since January 2025, the QSC audio, video and control platform.

Acuity Brands Lighting is 77% of sales, and it shrank. Net sales fell $35.8 million, or 1.0%. The release breaks the segment into sales channels, and they did not move together.

The independent sales network, which is three quarters of the segment, grew 2.1%. The direct sales network lost $97.2 million, almost a quarter of its revenue. That one channel accounts for more than the whole segment decline. The release does not say why it fell.

ABL operating profit rose 5.6% to $623.5 million on lower sales. That looks like margin discipline, and part of it is. But $38.2 million of the tariff refunds landed in this segment. The release's adjusted figures remove them: adjusted ABL operating profit fell 2.5% to $646.0 million, and adjusted gross profit margin was 45.7% against 45.8%. On that basis the lighting business was flat on margin and slightly down on profit.

Acuity Intelligent Spaces grew 44.8% to $1.11 billion and is now 24% of sales. The growth rate needs a caveat. Acuity bought QSC on January 1, 2025, so fiscal 2025 held eight months of QSC and fiscal 2026 holds twelve. The fourth quarter is the cleaner read, because QSC is in both years: AIS net sales rose 16.6% to $297.6 million.

AIS operating profit more than doubled, from $76.1 million to $186.5 million. Three things moved. Fiscal 2025 carried the $29.6 million inventory charge, and fiscal 2026 does not. AIS received $13.1 million of the tariff refunds. And the segment grew. With the release's adjustments applied, which also remove amortization of acquired intangible assets and share-based pay, adjusted AIS operating profit was $255.0 million, up 55.2%, at a 23.0% margin against 21.5%.

We read the release for the seven demand and supply themes we track in every earnings post. We did not read a call transcript, and nothing here is quoted from one. What the release says:

• Results. The chief executive's statement reads: "We demonstrated solid execution in the fourth quarter of fiscal 2026. We grew sales and expanded our adjusted operating profit and adjusted operating profit margin." That describes the outcome. It makes no claim about customers.
• Strategy. "Throughout fiscal 2026 we strengthened Acuity Brands Lighting while continuing to scale Acuity Intelligent Spaces, building the operating and financial capacity needed to compound growth and value over time."
• Guidance. The release gives none for fiscal 2027.

All seven themes are absent. There is no sentence about demand, orders, backlog, selling prices, supply or lead times, and none about a product ramp or new markets. The ledger agrees with the silence. Inventories fell 14.5%, from $526.7 million to $450.4 million, while sales rose 6.8%. Accounts receivable rose 6.4%, in line with sales. A company that cannot meet demand does not look like that. A company running a mature lighting business for cash and growing a newer one does.

One word in the statement deserves a test: "strengthened" Acuity Brands Lighting. Sales fell 1.0% and adjusted operating profit fell 2.5%. The GAAP margin rose a point, and the tariff refund supplied that point. The numbers support "held", and they do not yet support "strengthened".

The Margin Story​

Gross margin has risen every year, from 41.8% to 50.6%. That is 8.8 points in four years. The first half of that climb happened while sales were falling: net sales dropped from $4.01 billion in fiscal 2022 to $3.84 billion in fiscal 2024, and gross profit still rose by $109.0 million. Acuity was selling less lighting at a better margin.

The second half has a different cause. AIS earns a gross margin near 60%, against about 46% for lighting. When AIS went from 7.6% of sales in fiscal 2024 to 23.8% in fiscal 2026, the company's blended margin rose even with each segment standing still.

Now the next column. Selling, distribution, and administrative expenses went from 29.0% of net sales to 34.8%. That is 5.8 points, and it took back about two thirds of the gross margin gain. Research and development sits inside this line; the fiscal 2025 10-K puts it at $140.2 million, up from $97.1 million two years earlier. So does the amortization of acquired intangible assets, which the release puts at $93.1 million for fiscal 2026 against $76.5 million. A software and controls business has higher gross margins and higher operating expenses than a fixture factory, and both show here.

Fiscal 2026's 50.6% overstates the underlying figure. The release's adjusted gross profit margin, which removes the tariff refunds, is 49.5%, against an adjusted 48.5% in fiscal 2025. The refunds have a clear accounting trail. The third-quarter 10-Q explains that after court rulings in February and March 2026 on tariffs imposed under the International Emergency Economic Powers Act, the company "elected to account for refunds of these tariffs as gain contingencies based on the original tariff cost recognition." It recorded $6.4 million in cost of products sold through May. The release adds $44.9 million received in the fourth quarter. Without the $51.3 million, operating profit would have been $662.4 million by our arithmetic, a 14.3% margin, which is below fiscal 2024's 14.4%.

On price versus volume, the release says nothing. It does not mention pricing. The fiscal 2025 10-K credited that year's gross profit gain to "the fall through of higher net sales, including contributions from the QSC acquisition, as well as favorable materials costs," partly offset by "increased production costs, higher tariffs, and acquisition-date fair value adjustments to QSC's inventory." A reader should not credit the fiscal 2026 margin to pricing on this evidence.

The One Big Question: Which Growth Rate Is the Real One?​

GAAP earnings per share grew 36.1%. Adjusted earnings per share grew 10.5%. The release's own reconciliation shows exactly how one becomes the other.

The answer is in the "total pre-tax adjustments" row. In fiscal 2025 the company added back $235.6 million. In fiscal 2026 it added back $115.0 million. The adjustments halved.

Three fiscal 2025 items carry a dash in fiscal 2026: the inventory charge, the acquisition costs and the pension settlement. Together they were $84.3 million of expense that GAAP net income absorbed last year and does not absorb this year. Then fiscal 2026 has an item going the other way. The tariff refund is a $51.3 million gain that the company subtracts.

So GAAP net income rose 34.0% from a year that was held down to a year that was helped. Adjusted net income rose 8.8%, from $569.8 million to $619.9 million. Adjusted EPS rose a little faster, 10.5%, because the diluted share count fell from 31.6 million to 31.2 million.

Neither figure is wrong. The GAAP figure is what the company earned. Acuity really did receive the refunds and really did pay the acquisition fees. But a reader projecting next year should start from the smaller rate. The refunds are a recovery of costs from earlier periods, and the release does not say whether more will come.

There is a second point about the adjusted figure. It adds back $93.1 million of amortization and $49.5 million of share-based pay every year. Those are recurring costs. The amortization is the price of QSC arriving on the income statement over many years: the fiscal 2025 10-K valued the acquired intangible assets at $713.9 million with a weighted average life of 13 years. Adjusted EPS of $19.90 is $2.85 above GAAP EPS, and most of that difference will recur.

Tracking a $4.6B Lighting and Controls Company in Plain Text​

An acquisition changes a company in ways a single year's income statement does not show. Double-entry bookkeeping makes the change visible, because the purchase price has to land somewhere on the balance sheet. The conventions are the ones we use for every company in this series: how we model every company. Income postings are credits (negative), expenses are debits (positive), and Equity:Adjustments takes net income so the transaction sums to zero. Acuity reports in millions to one decimal, and the ledger keeps that precision.

; Check: −4,641.8 + 2,342.4 + −51.3 + 1,613.3 + 23.7 + 25.6 + 7.4 + 149.4 + 531.3 = 0 ✓
2026-08-31 * "Acuity Inc." "FY2026 Income Statement"
  Income:Revenue                             -4641.8 MUSD  ; net sales: ABL 3,576.4 + AIS 1,106.6 − eliminations 41.2
  Expenses:CostOfRevenue                      2342.4 MUSD  ; cost of products sold before tariff refunds (filed line 2,291.1 + refunds 51.3)
  Expenses:CostOfRevenue                       -51.3 MUSD  ; tariff refunds received (named one-off; the release removes them from adjusted gross profit)
  Expenses:SellingGeneralAdministrative       1613.3 MUSD  ; selling, distribution, and administrative expenses (research and development is inside this line)
  Expenses:SellingGeneralAdministrative         23.7 MUSD  ; special charges — the filing's own separate operating line (named one-off)
  Expenses:OtherNet                             25.6 MUSD  ; interest expense, net
  Expenses:OtherNet                              7.4 MUSD  ; miscellaneous expense, net
  Expenses:IncomeTax                           149.4 MUSD  ; income tax expense
  Equity:Adjustments                           531.3 MUSD  ; net income offset (preliminary, unaudited)

Two accounts appear twice. Expenses:CostOfRevenue has one posting for cost of products sold before the tariff refunds and one negative posting for the refunds; they add to the filed $2,291.1 million. Expenses:SellingGeneralAdministrative carries the special charges as a second, labeled posting, because the filing prints them on their own line. A reader can remove either one-off and see the year without it.

The balance-sheet lines that tell this company's story sit one year back, across the QSC purchase:

2024-08-31 balance Assets:NonCurrent:Goodwill                      1098.7 MUSD  ; goodwill
2025-08-31 balance Assets:NonCurrent:Goodwill                      1495.5 MUSD  ; goodwill
2024-08-31 balance Assets:NonCurrent:IntangibleAssets               440.5 MUSD  ; intangible assets, net
2025-08-31 balance Assets:NonCurrent:IntangibleAssets              1099.0 MUSD  ; intangible assets, net
2024-08-31 balance Liabilities:NonCurrent:LongTermDebt             -496.2 MUSD  ; long-term debt
2025-08-31 balance Liabilities:NonCurrent:LongTermDebt             -896.8 MUSD  ; long-term debt
2024-08-31 balance Assets:Current:Cash                              845.8 MUSD  ; cash and cash equivalents
2025-08-31 balance Assets:Current:Cash                              422.5 MUSD  ; cash and cash equivalents

Goodwill rose $396.8 million and intangible assets rose $658.5 million in one year. Long-term debt rose $400.6 million and cash fell $423.3 million. That is the acquisition, entered four times. The fiscal 2025 10-K gives the cash consideration as $1,240.7 million. At August 31, 2025, goodwill and intangible assets together were $2.59 billion, or 55% of total assets.

The fiscal 2026 ledger is coarser, and the reason is the source. The release prints a condensed balance sheet with one "other long-term assets" line of $2,657.5 million, and stockholders' equity as a single total of $2,974.3 million. Goodwill, intangible assets and lease assets are inside that one line. The ledger records the line as the release prints it and does not estimate the parts. It asserts the separate goodwill and intangible accounts at zero for fiscal 2026, with a comment that this means "included in the aggregate". When the 10-K is filed, the period will be checked against it and the detail restored.

The Multi-Year Arc​

Net sales grew 15.9% from fiscal 2022 to fiscal 2026, or 3.8% a year. All of it, and more, came from AIS. That segment went from $216.1 million to $1.11 billion, about five times larger, mostly by purchase. Lighting net sales were $3,810.1 million in fiscal 2022 and $3,576.4 million in fiscal 2026, a decline of 6.1%.

Net income grew 38.4% over the same years. The income line is uneven, with a dip in fiscal 2023 and again in fiscal 2025, the acquisition year.

The cash columns are steadier than the income column. Operating cash flow exceeded net income in each of the last four years. Over five years Acuity generated $2.94 billion of operating cash flow against $2.08 billion of net income, and spent $333.3 million on property, plant and equipment. A business that needs about 11 cents of capital spending per dollar of operating cash flow has a lot left to allocate.

Follow where it went. In fiscal 2022 the company spent $514.8 million on its own shares. Repurchases then fell for two years while cash built to $845.8 million. In fiscal 2025 that cash and a $600.0 million term loan bought QSC. In fiscal 2026 the direction turned again. The third-quarter 10-Q says the company voluntarily repaid $200.0 million of the term loan, then repaid the remaining $200.0 million with borrowings under a new $800.0 million revolving credit facility signed on May 8, 2026. Total debt on the balance sheet fell from $896.8 million to $697.4 million. Repurchases rose to $287.2 million and cash rose $213.8 million, all in the same year.

Debt less cash was $474.3 million a year ago. It is $61.1 million now. Twenty months after a $1.2 billion purchase, net debt is close to zero, with the acquired business still on the balance sheet.

For a sector peer at the opposite point in the same cycle, compare the Cintas ledger. Cintas has returned about 90% of its net income to shareholders for five years and is now waiting to close an acquisition worth more than half its total assets. Acuity shows what the second year after a large purchase can look like when the cash flow holds.

The Verdict: Bull vs. Bear​

Bull Case

• Operating cash flow was $825.6 million, up 37.3%, and free cash flow as the release defines it was $747.9 million. Both exceed net income of $531.3 million.
• Debt less cash fell from $474.3 million to $61.1 million in one year while the company also spent $287.2 million on repurchases.
• AIS grew 16.6% in the fourth quarter, a quarter in which QSC is in both periods, at an adjusted operating margin of 24.9%.
• Gross margin has risen in every year in the ledger. With the tariff refunds removed it was still 49.5%, a point above the adjusted fiscal 2025 figure.
• Inventories fell 14.5% on higher sales, which released cash.

Bear Case

• The release makes no claim about demand, orders, pricing or supply, and gives no fiscal 2027 guidance. None of the seven signals we look for is supported by a sentence, so none can be credited.
• Lighting, 77% of sales, fell 1.0% for the year and 0.4% in the fourth quarter. Its direct sales network fell 23.6%, and the release gives no reason. Adjusted lighting operating profit fell 2.5%.
• About $51 million of operating profit is tariff refunds. Without them the operating margin was 14.3%, below fiscal 2024's 14.4%, and the release does not say whether refunds continue.
• Selling, distribution, and administrative expenses have risen from 29.0% to 34.8% of net sales since fiscal 2022. Two thirds of the gross margin gain has been spent below the gross profit line.
• The 36.1% GAAP EPS growth compares a helped year with a held-down year. The repeatable rate in the company's own reconciliation is closer to 10%, and that figure excludes $93.1 million of amortization that recurs.
• The fiscal 2026 figures are unaudited. The 10-K may change them, and the full balance sheet is not yet public.

Our Take

Use the 10.5%. Acuity had a good year, and the cash flow statement shows it more plainly than the income statement does: $825.6 million of operating cash flow, a term loan gone, and net debt nearly erased within two fiscal years of a $1.2 billion purchase. That is real. The 36% headline is also real, and it overstates the year, because one-time costs fell away from last year and a one-time gain arrived in this one. What the filings show underneath is a lighting business that is no longer growing and is run for margin and cash, and a controls and audio-video business that is growing in the mid-teens and earns much more per sales dollar. The ledger makes the trade visible. The open question for fiscal 2027 is whether AIS growth can outrun a flat lighting segment once the refunds stop, and the release offers no guidance on it.