Acuity Inc. (NYSE: AYI) — Fiscal 2026 Form 10-K
Business context and reporting period. This is the annual report for the fiscal year ended August 31, 2026—not a standalone fourth-quarter report. Acuity operates in two segments: Acuity Brands Lighting (ABL), selling lighting and controls, and Acuity Intelligent Spaces (AIS), offering building management, software, and audio, video, and control solutions.
Financial performance and liquidity
| Metric | Fiscal 2026 | Fiscal 2025 | Change |
|---|---|---|---|
| Net sales | $4,641.8 million | $4,345.6 million | +6.8% |
| Gross profit / margin | $2,350.7 million / 50.6% | $2,078.5 million / 47.8% | +13.1%; +280 bps |
| Operating profit / margin | $713.7 million / 15.4% | $563.9 million / 13.0% | +26.6%; +240 bps |
| Net income | $531.3 million | $396.6 million | +34.0% |
| Diluted EPS | $17.05 | $12.53 | +36.1% |
| Operating cash flow | $825.6 million | $601.4 million | +$224.2 million |
| Capital expenditures | $77.7 million | $68.4 million | +$9.3 million |
Cash and cash equivalents were $636.3 million at year-end, up $213.8 million. Debt was $697.4 million, including $500 million principal of 2.150% senior notes due in 2030 and $200 million under the revolving credit facility. The company reported $593.3 million of additional revolver capacity and said cash plus available capacity totaled $1.2 billion. It was in covenant compliance. On September 10, 2026, it repaid the remaining $200 million revolver borrowing; the filing does not provide a post-repayment cash balance.
Fiscal 2026 cash from operations benefited from higher profit, $51.3 million of tariff refunds, and lower income tax payments. Income taxes paid were $107.6 million, compared with $151.8 million in fiscal 2025. Contractual purchase obligations of $450.2 million were due in fiscal 2027. Management said available cash, projected operating cash flows, borrowing availability, and capital-market access were expected to meet near-term liquidity needs.
Material changes and segment results
- AIS: Sales rose 44.8% to $1,106.6 million; operating profit increased to $186.5 million from $76.1 million, and operating margin expanded to 16.9% from 10.0%. Growth was primarily attributed to QSC, acquired in January 2025, and higher Distech sales. The prior-year comparison included only part-year QSC results.
- ABL: Sales declined 1.0% to $3,576.4 million, while operating profit rose 5.6% to $623.5 million and operating margin improved to 17.4% from 16.4%. Lower sales in certain channels were offset in part by lower tariff, material, and quality costs.
- Company-wide sales growth was therefore acquisition-led and partially offset by lower ABL sales; the filing does not provide a comparable organic-growth rate.
- Research and development expense increased to $165.6 million from $140.2 million. The company repurchased approximately 0.9 million shares for $289.5 million and paid $23.8 million in dividends during fiscal 2026.
Outlook, unusual items, and risks
- The filing provides no quantified fiscal 2027 revenue or earnings guidance. Management described its capital priorities as investment in the business, acquisitions, dividends, and share repurchases, subject to cash needs and other conditions.
- The $51.3 million IEEPA tariff refund was recorded in cost of products sold. The company said it had received refunds but that timing and receipt of future refunds were uncertain. U.S. tariff policy remains unsettled; the U.S. declined to renew the USMCA in July 2026, and annual reviews make its future status uncertain, although the agreement remains in force unless formally withdrawn.
- Fiscal 2026 special charges were $23.7 million, mainly tied to productivity initiatives involving the product portfolio, supply chain, operating footprint, and labor costs. These included $2.9 million of intangible-asset impairment and $3.1 million related to a discontinued leased facility.
- Fiscal 2025 included a $30.9 million non-cash pension settlement charge that did not recur, and $29.6 million of QSC acquisition-date inventory fair-value adjustments that also did not recur in fiscal 2026. These items affect comparisons.
- Key risks include construction and renovation demand, competitive pricing, raw-material and component availability and costs, tariffs and trade uncertainty, foreign exchange, and reliance on Mexican manufacturing. The company reported that approximately 49% of finished products were manufactured in Mexico. Collective bargaining agreements cover approximately 59% of employees, with agreements representing approximately 54% of the workforce expiring within one year.
- The company also identifies cybersecurity, privacy, and AI deployment risks; product warranty and recall exposure; and potential legal, environmental, tax, and goodwill-impairment risks. Product recall and warranty liabilities are self-insured. Goodwill was $1,493.5 million; fiscal 2026 impairment testing found no goodwill impairment.
Ernst & Young issued unqualified opinions on the consolidated financial statements and internal control over financial reporting. Management also concluded disclosure controls and internal financial reporting controls were effective as of August 31, 2026.
Important facts for investors to verify
- How much AIS growth and margin improvement persists after separating QSC’s full-year contribution from underlying growth, and whether Distech momentum continues.
- Whether ABL sales stabilize and whether gross-margin gains can be sustained without tariff refunds and other cost benefits.
- The timing, amount, and accounting treatment of any further tariff refunds, and the effects of USMCA reviews or new tariffs on sourcing, costs, and demand.
- Post-repayment cash, debt, and revolver availability, alongside the $450.2 million of fiscal 2027 purchase obligations and planned capital returns.
- Performance and valuation assumptions supporting the $1.49 billion goodwill balance, as well as execution of productivity actions and potential labor negotiations in Mexico.