Acuity Brands, Inc. (NYSE:AYI) Q2 2023 Earnings Call Transcript

Jeffrey Sprague: Yes. Then I guess just kind of coming off that and just thinking about your guidance, right? What would have to happen to get us to the bottom end of the range, right? I mean if we look at kind of historical first half, second half patterns, right, unless there’s an abrupt change in the economic environment, it seems like you’re in the upper 1/3 of that range by historical standards. What — I don’t know if you agree with that but what do you think would have to happen here to get you to the bottom of that range? It’s a wide range with half a year to go.

Neil Ashe: Yes. I mean as we said, Jeff, what we’re — our intention is not to update the range throughout the year. The — based on our performance for the first half of the year, it would imply for the rest of the year that sales will be harder to achieve but we’re demonstrating that profits are achievable. That’s the bullet point summary of kind of how the rest — we think the rest of the year plays out.

Jeffrey Sprague: Great. And maybe just one quick last one. Just on inventories. Your own inventory performance has been notable, right? You brought it down pretty dramatically. It looks like you’re kind of near historical averages on days inventory. Anyhow, is there — I mean, is there a lot of additional opportunity in your view at this point to unlock cash through further inventory liquidations? Or have we reached some kind of normalized level here?

Karen Holcom: I think, Jeff, for the most part, we are at a more normalized level. We’re still a little bit heavy on component inventory for electronics but it’s modest compared to the decreases that we’ve made so far.

Neil Ashe: And then I’d add to that, we have multiple efforts ongoing to continue to reduce that. So I think we are at historically normal levels. And I also believe that we can improve those over time.

Operator: Thank you. And I’m showing no further questions in the queue at this time. I’d like to turn the call back to Neil Ashe for any closing remarks.

Neil Ashe: Thank you. We really appreciate you joining us this morning. We’re pleased with our performance so far this year. We are in control of what we can control and we’re confident about our ability to deliver no matter the market conditions on our customer requirements. So thank you for spending some time with us this quarter and we look forward to talking to you again next quarter.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.