AYI Acuity Brands Inc

By Micah Maidenberg 

Acuity Brands Inc. reported sales volumes fell 16% in its latest quarter, as the trade war between the U.S. and China whipsawed the lighting-products manufacturer.

Shares of the company fell 11% Wednesday morning, as it warned that global trade issues, including tariffs, are hampering demand.

The Atlanta-based company produces and sells a wide-range of lighting products, from antique-style street lamps to dimming LED systems, that are used in homes and commercial settings such as big-box retail stores.

Acuity depends on Chinese producers, sourcing certain lighting components. About 15% of finished goods came from the country during the company's fiscal 2018, according to its annual report.

Tariffs the Trump administration levied on Chinese imports last year hit those items, the company has said, forcing it to increase prices, look for non-Chinese suppliers and take other steps to mitigate the additional costs.

Acuity Chief Executive Vernon Nagel on Wednesday described overall demand for lighting products as sluggish. Tariffs have further hurt Acuity as the companies behind major construction projects hold off on building.

"The uncertainty of tariffs has a meaningful impact on when they say 'go, '" Mr. Nagel told analysts on a conference call.

Customers, meanwhile, have also rushed to get ahead of price increases the company has implemented in part to offset tariffs.

For example, sales rose 11% in its quarter ended in November of last year. Executives at Acuity said they believed that growth was bolstered by customers buying products before the higher prices took effect.

That "pull forward" of orders likely will weigh on the company's results in its next quarter, according to the company.

Overall, sales dropped 12% to $938.1 million in the quarter ended this past August, missing Wall Street forecasts, Acuity said. Profit fell to $96.1 million, or $2.42 a share, from $108.2 million, or $2.70 a share, the year earlier.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

October 02, 2019 11:51 ET (15:51 GMT)

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