Finances

Acuity Brands, Inc. (AYI) reported its fourth quarter and full-year earnings on Tuesday, October 4. The technology company reported record net sales, causing its stock to rise 8% following the release of the report.

The company's net sales reached $1.11 billion for the fiscal fourth quarter, up 12% from $992 million during the same period last year. This beat analysts' expectations for the ninth consecutive quarter. For the full year, the company posted net sales of $4.01 billion, up 16% from $3.46 billion last year.

"We continued to deliver strong results in the fiscal fourth quarter, concluding what has been a very good fiscal 2022," said Acuity Brands, Inc. President and CEO, Neil Ashe, "We had strong demand across our end markets, and we demonstrated our ability to capture price and drive volume through product vitality and service in both our lighting and spaces businesses throughout this fiscal year."

Acuity Brands reported quarterly net income of $115.4 million or $3.48 per adjusted share. This was an increase from $98.1 million during the same period last year. For the full year, the company reported $384.0 million or $11.08 per adjusted share.

The Atlanta, Georgia-based manufacturer of lighting products attributed its increased income to a focus on product vitality, service level and their investment in product development. The company's Lighting and Lighting Controls independent sales network sales increased 11.2% to $737.1 million and direct sales network sales increased 12.5% to $114.9 million in the quarter. For the full year, Acuity's Lighting and Lighting Controls segment increased 15.9%. The company repurchased approximately 3 million shares, reaching $512 million in buybacks for the full year.

Acuity Brands, Inc. (AYI) shares ended the week at $157.10, relatively unchanged for the week.

McCormick Posts Earnings Report

McCormick & Co Inc. (MKC) announced its third quarter results on Thursday, October 6. While the company's reported increased revenue and profits, shares dipped following the release of the earnings report.

Revenue came in at $1.60 billion for the third quarter, missing analysts' estimates of $1.78 billion. While the company's revenue did not meet analysts' expectations, revenue was up 3% from $1.55 billion during the same quarter last year.

"During the third quarter, supply chain challenges continued, and recovery of certain constrained materials has taken longer than expected," said McCormick & Co Inc. CEO, Lawrence E. Kurzius, "Over the coming months, we will be aggressively eliminating supply chain inefficiencies. Importantly, as we had expected in the third quarter, we began to recover the cost inflation that had been outpacing our pricing actions and other levers. We expect this will continue into next year as we plan to fully offset inflation over time."

For the quarter, the company reported profits of $222.9 million, or $0.83 per share. This is up 5% from $212.4 million, or $0.79 per share the year prior.

The Hunt Valley-based spice company's earnings reflected a 10% increase stemming from pricing increases. Despite high inflation and supply chain issues, the company has surpassed analyst' earnings per share estimates three times in the last four quarters. The company reported gross profits of $235 million this quarter, compared to the $265 million last year, a difference of 3%. Consumer sales in the Americas grew 3% in the quarter, while consumer sales in its Europe, Middle East and Africa segment dropped 13%. Higher cost inflation and other supply chain costs were partially offset by the pricing actions. The company reaffirmed its fiscal year earnings per share outlook of $2.64 to $2.69.

McCormick & Co Inc. (MKC) shares ended the week at $73.44, up 2% for the week.

Conagra Foods Reports Quarterly Results

Conagra Foods, Inc. (CAG) announced its first quarter earnings on Thursday, October 6. Despite reporting better than expected revenue for the quarter, the Chicago-based food company's stock dropped nearly 2% following the release of the report.

The company reported revenue of $2.9 billion during the first quarter. This was up 10% from $2.7 billion in the same quarter last year. The increase surpassed analysts' estimates of $2.8 million.

"The strength of our brands and continued execution of the Conagra Way playbook resulted in strong sales and adjusted operating profit during the first quarter," said Conagra CEO, Sean Connolly. "We continued to deliver improved service and productivity as we navigate ongoing inflationary pressures and industry-wide supply chain challenges. Our strong start to fiscal 2023 reaffirms our confidence in our outlook for the balance of the fiscal year as we remain focused on generating value for our shareholders."

For the quarter, Conagra reported adjusted net income of $275 million or $0.57 on an adjusted per share basis, exceeding analysts' estimates of $0.52 per adjusted share. This compares to earnings of $0.50 per adjusted share from the same time last year.

The packaged foods company, which holds popular brands such as Duncan Hines, Healthy Choice and Slim Jim, reported an increase of 9.7% in organic net sales. The company had its grocery and snacks segment account for $1.2 billion, a 10.5% increase in net sales during the quarter. Conagra's refrigerated and frozen segment increased 9.6% to $1.2 billion in the quarter, while foodservice increased 14.6% to $175 million. The company expects earnings per share growth of 1% to 5% for fiscal 2022.

Conagra Foods, Inc. (CAG) shares ended the week at $32.85, relatively unchanged for the week.

The Dow started the week at 28,855 and closed at 29,927 on 10/7. The S&P 500 started the week at 3,610 and closed at 3,745. The NASDAQ started the week at 10,659 and closed at 11,073.

Treasury yields rose mid-week as uncertainty over future interest rate intensified. Yields continued in an upward trend with a surge on Friday in reaction to a surprise unemployment decline.

U.S employers added 263,000 non-farm jobs in September, falling short of economists' expected payroll gain of 275,000, but enough to cool the labor market slightly. Unemployment rates fell to 3.5% from 3.7%, matching a half-century low that was last seen in July.

"We are seeing labor demand cool," said Sarah House, senior economist at Wells Fargo. "But we have a long way to go towards restoring balance between supply and demand for labor."

The benchmark 10-year Treasury note yield opened the week of October 3 at 3.83% and traded as high as 3.84% on Thursday. The 30-year Treasury bond opened the week of at 3.77% and traded as high as 3.82% on Thursday.

On Friday, the U.S. Labor Department reported jobless claims for the week ending October 1 rose by 29,000 to 219,000, with many economists pointing to disruptions from recent hurricanes. Continuing unemployment increased by 15,000, reaching 1.4 million.

"It's difficult to assess how much the labor market is cooling from initial claims and this will be the case for several weeks because of the distortions from Hurricane Fiona and Ian," said Ryan Sweet, a senior economist at Moody's Analytics.

The 10-year Treasury note yield closed at 3.89% on 10/7, while the 30-year Treasury bond yield closed at 3.85%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, October 6. Mortgage rates experienced a slight dip from the prior week.

The 30-year fixed rate mortgage averaged 6.66%, down from last week's average of 6.70%. During the same time last year, the 30-year fixed rate mortgage averaged 2.99%.

This week, the 15-year fixed rate mortgage averaged 5.90%, down from 5.96% last week. Last year at this time, the 15-year fixed rate mortgage averaged 2.23%.

"Mortgage rates decreased slightly this week due to ongoing economic uncertainty," said Freddie Mac's Chief Economist, Sam Khater. "However, rates remain quite high compared to just one year ago, meaning housing continues to be more expensive for potential homebuyers."

Based on published national averages, the savings rate was 0.17% as of 9/19. The one-year CD averaged 0.60 %.