Earnings Preview: AYI, LW, STZ, LEVI, TLRY

By Duncan Ferris


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This week’s company earnings include Acuity Brands (NYSE: AYI), Lamb Weston Holdings (NYSE: LW), Constellation Brands (NYSE: STZ), Levi Strauss (NYSE: LEVI) and Tilray Brands (NASDAQ: TLRY).

Photo by Mnz on Unsplash

Read on for some of the key earnings reports to look out for in the week ahead:

Acuity Brands

Arriving on Tuesday morning, Acuity Brands (NYSE: AYI) will release its final set of quarterly results from its 2022 fiscal year.

This business is an industrial technology outfit, with its areas of expertise including lighting, lighting controls, building management systems and location-aware applications.

Atlanta-based Acuity Brands has operations across North America, Europe, and Asia, with these being powered by approximately 13,500 employees. 

The company’s most recently released earnings, which covered the third quarter period ending 31 May, showed net sales growth of $1.06bn. This amounted to a 17.9% jump compared to the same period 12 months prior.

Though costs also increased, the company was profitable during the period and saw earnings per share rise from $2.40 to $3.10.

The period showed how reliant Acuity Brands is on its independent sales network, which saw net sales rise by $97.9m to $725.9m in the period. This growth is impressive and dwarfs the size of contributions from other revenue streams.

However, deceleration here could lead to a significant overall slowdown in sales growth, so it’s an important area for investors to keep an eye on.

Lamb Weston Holdings Inc

Coming in on Wednesday is Lamb Weston Holdings (NYSE: LW), a business which boasts that it is “North America’s premier potato company”.

Experts in all things potato, the company offers curly fries, sweet potato mash and everything in between.

In the company’s last earnings update, which covered the fourth quarter of its 2022 fiscal year, the business detailed its outlook for 2023.

  • Net sales of $4.7bn to $4.8bn.

  • Net income of $360m to $410m.

  • Diluted EPS of $2.45 to $2.85.

  • Adjusted EBITDA including unconsolidated joint ventures of $840m to $910m.

As such, the first quarter will likely need to show significant net sales and net income growth, with the latter particularly important as it has actually been declining over recent periods.

With pricing having been adjusted in the second half of last year and margins returning to normal levels, the business will likely be expecting some positive movement from its net income.

Constellation Brands

This business is a leading international producer and marketer of beer, wine and spirits with operations in the US, Mexico, New Zealand and Italy. 

Investors can expect the Constellation Brands’ (NYSE: STZ) second quarter earnings release on Thursday morning this week.

The business topped expectations in its last earnings update when it reported net sales of $2.4bn, which constituted growth of 17% compared with the same period one year prior. Additionally, net income and operating income both climbed by 10%.

Constellation Brands’ strong performance in this period was largely thanks to its beer segment, which saw net sales growth of 21% to reach a contribution of $1.9bn as Modelo and Corona brands both sold well.

The business has said it expects net sales from this segment to climb by between 7% and 9% across the full year, offsetting a net sales decline of between 1% and 3% from the wine and spirits arm. As such, investors should watch out for continued strength from beer sales and not be too alarmed by small decreases in sales of other beverages.

Levi Strauss

Thursday is also set to bring investors the next quarterly update from Levi Strauss (NYSE:  LEVI). Across the full year, this world-famous designer of the original blue denim jeans says it expects to achieve:

  • Net revenues growth of 11% to 13%, between $6.4bn and $6.5bn.

  • Adjusted diluted EPS of $1.50-to-$1.56.

Analysts from Zacks have stated that they expect the business to report quarterly revenue growth of around 8%, while EPS is anticipated to fall by around 23% to $0.37.

The business has placed a strong emphasis on the growth of its direct-to-consumer sales channel, so investors should look carefully for success here. For reference, the most recent three-month period saw direct sales increase by 16% as sales in Levi-branded stores rose by 23%.

Wholesale net revenues still make up the bulk of the company’s business, with the direct route accounting for 37% in the most recent period, but its growth is being outpaced. Levi Strauss’ strategy is to grow as a brand-led business, so investors should anticipate further growth in sales from Levi stores and online shopfronts.

Tilray Brands Inc

Tilray Brands (NASDAQ: TLRY) are leading experts when it comes to cannabis lifestyle and consumer goods products. Investors should expect the company’s next earnings update to hit this coming Friday.

The business could do with a strong showing here, as its share price has declined by north of 60% across the year to date. It’s a trajectory that can be seen across many cannabis stocks, with the declines potentially due to legalization and decriminalization progress not meeting investors’ expectations. 

Tilray doesn’t turn a profit and is unlikely to do so for quite some time yet, but its earnings can still show positive signs. However, the business’ most recent quarterly update did not inspire confidence in investors and analysts, with a wider loss than expected for the period.

This came after an 8% increase in revenue was more than offset by a 34% jump in cost of sales and soaring operating expenses. Narrowing the disparity between costs and sales must be a key objective for Tilray if the business is to be in a state to capitalize on widespread cannabis legalization and decriminalization, whenever it happens.  


In this article:

Author: Duncan Ferris

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Duncan Ferris does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Duncan Ferris has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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