LSI Industries (NASDAQ:LYTS) Issues Earnings Results, Misses Estimates By $0.12 EPS

Key Points

• LSI missed Q3 estimates—adjusted EPS of $0.28 versus consensus $0.40 (a $0.12 miss) and revenue of $150.5M versus expected $163.5M, despite total sales rising 14% and adjusted EBITDA of $15.0M (10% of sales).
• Segment divergence: Display Solutions outperformed with sales +14% and adjusted operating income +64% driven by grocery and C‑store wins, while Lighting showed near‑term softness and management expects Q4 lighting sales to decline mid‑single digits, pressuring consolidated revenue.
• LSI completed the Royston acquisition, which management says is accretive and pushes pro forma revenue run‑rate toward $900M with pro forma TTM net debt/EBITDA around 2.7x; the company also generated $11.8M free cash flow and declared a quarterly dividend of $0.05 (0.9% yield).

LSI Industries (NASDAQ:LYTS - Get Free Report) issued its quarterly earnings data on Thursday. The construction company reported $0.28 earnings per share for the quarter, missing analysts' consensus estimates of $0.40 by ($0.12), FiscalAI reports. The company had revenue of $150.53 million for the quarter, compared to the consensus estimate of $163.53 million. LSI Industries had a net margin of 4.34% and a return on equity of 10.90%.

Here are the key takeaways from LSI Industries' conference call:

• The company reported a solid fiscal Q3: total sales rose 14% to $150.5M, adjusted EPS was $0.28, and adjusted EBITDA was $15.0M (10% of sales), with adjusted EBITDA excluding Royston up 26% year‑over‑year and margins improving ~130 bps.
• Display Solutions materially outperformed—segment sales +14% and adjusted operating income +64% YoY—driven by grocery (orders +20%) and stronger C‑store activity, including a >$5M program award and a backlog above prior year.
• Lighting showed near‑term softness: Q3 growth was only ~2%, the quote‑to‑order conversion cycle lengthened, and management expects Q4 lighting sales to decline mid‑single digits, which will pressure consolidated Q4 revenue growth.
• LSI completed the Royston acquisition (six‑day stub in Q3), which management says is accretive to Display margins, expands capabilities across verticals and contributes to a pro forma revenue run‑rate approaching $900M (pro forma TTM net debt/EBITDA ~ 2.7x).
• Strong cash generation continued with free cash flow of $11.8M in the quarter and management emphasized disciplined integration and operational improvements—note these are management statements and subject to execution risk.

LSI Industries Stock Performance

LYTS stock traded down $0.37 during midday trading on Friday, reaching $22.30. 231,873 shares of the company's stock traded hands, compared to its average volume of 251,337. LSI Industries has a 52-week low of $13.78 and a 52-week high of $24.75. The stock has a market cap of $694.20 million, a P/E ratio of 27.21 and a beta of 0.32. The company has a current ratio of 2.15, a quick ratio of 1.21 and a debt-to-equity ratio of 0.11. The stock's 50-day moving average is $20.10 and its 200 day moving average is $20.28.

LSI Industries Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Tuesday, May 12th. Shareholders of record on Monday, May 4th will be issued a dividend of $0.05 per share. This represents a $0.20 dividend on an annualized basis and a yield of 0.9%. The ex-dividend date of this dividend is Monday, May 4th. LSI Industries's dividend payout ratio is currently 24.39%.

Institutional Trading of LSI Industries

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in LYTS. Northwestern Mutual Wealth Management Co. increased its stake in shares of LSI Industries by 205.0% in the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 1,534 shares of the construction company's stock worth $28,000 after purchasing an additional 1,031 shares in the last quarter. Strs Ohio purchased a new stake in shares of LSI Industries in the first quarter worth $34,000. EverSource Wealth Advisors LLC purchased a new stake in shares of LSI Industries in the second quarter worth $47,000. Quarry LP purchased a new stake in shares of LSI Industries in the third quarter worth $55,000. Finally, Russell Investments Group Ltd. increased its stake in shares of LSI Industries by 711.7% in the third quarter. Russell Investments Group Ltd. now owns 2,703 shares of the construction company's stock worth $64,000 after purchasing an additional 2,370 shares in the last quarter. 73.91% of the stock is owned by hedge funds and other institutional investors.

Analyst Upgrades and Downgrades

A number of brokerages recently weighed in on LYTS. HC Wainwright restated a "buy" rating and set a $30.00 price objective on shares of LSI Industries in a research report on Tuesday, January 27th. Weiss Ratings reaffirmed a "hold (c)" rating on shares of LSI Industries in a report on Monday, December 29th. Canaccord Genuity Group upped their target price on shares of LSI Industries from $25.00 to $27.00 and gave the company a "buy" rating in a report on Friday, January 23rd. Zacks Research raised shares of LSI Industries from a "strong sell" rating to a "hold" rating in a report on Monday, March 30th. Finally, Wall Street Zen raised shares of LSI Industries from a "hold" rating to a "buy" rating in a report on Sunday, February 15th. Three analysts have rated the stock with a Buy rating and two have issued a Hold rating to the stock. According to MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and a consensus price target of $28.33.

About LSI Industries

LSI Industries, Inc NASDAQ: LYTS is a diversified manufacturer and distributor of lighting, graphics and building technology products. Headquartered in Cincinnati, Ohio, the company develops energy-efficient LED lighting systems, branded and digital graphic displays, and integrated building technology solutions. Serving customers in the retail, quick-service and convenience store, industrial, hospitality and transportation markets, LSI combines design, engineering and manufacturing capabilities to address both aesthetic and functional needs.

In its lighting segment, LSI offers interior and exterior LED fixtures, canopy lights, high-bay and low-bay systems, and specialized horticultural grow lights.

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