July 11, 2023
Halfway through 2023: Dim Performance for Lighting Stocks
Key players face headwinds, offering a contrasting picture to S&P 500's robust growth
For the first half of 2023, the United States stock market has seen significant growth. The S&P 500 saw a rise of 15.9%, marking its most robust first half since 2019. Meanwhile, the Nasdaq has seen an impressive surge of 31.7%, its best first-half performance since 1983. The Dow, a collection of 30 blue-chip stocks, reported a more modest gain, but still added 3.8% to its value.
Despite these gains, attempting to predict future trends for any six-month period within the stock market can often prove futile. But we thought we could strip out the large positive impact that megacap stocks like Apple and Nvidia are having on financial markets and examine how lighting and electrical manufacturing related stocks are performing halfway through 2023.
In stark contrast to general markets, lighting stocks seem to be having a down year which is a continuation of 2022 for many companies. Price increases have stabilized and demand has seemingly weakened causing a continuing hit to stock performance which is often priced for short- to mid-term future market expectation.
All of the financial common stock price data below was sourced from Yahoo Finance. Year to date common stock prices are through July 7. Here’s what we found:
Lighting (>50% lighting revenues) Manufacturers: Stock Performance
Ranked by market cap, high to low.
| Company | HQ (Currency) | 2022 Adj Close | July 7 Adj Close | YTD % |
| Acuity Brands | USA (USD) | 165.36 | 161.56 | -2% |
| Signify | Netherlands (EUR) | 29.59 | 25.79 | -13% |
| LSI Industries | USA (USD) | 12.15 | 11.99 | -1% |
| Zumtobel | Austria (EUR) | 6.81 | 7.31 | 7% |
| Dialight | UK (GBP) | 310 | 221 | -29% |
| Orion | USA (USD) | 1.82 | 1.64 | -10% |
| Energy Focus | USA (USD) | 2.24 | 1.94 | -13% |
Other related manufacturers (<15% lighting revenues): Stock Performance
| Company | HQ (Currency) | 2022 Adj Close | July 7 Adj Close | YTD % |
| Legrand | France (EUR) | 74.82 | 87.8 | 17% |
| Hubbell | USA (USD) | 232.74 | 327.8 | 41% |
Acuity Brands ($ 5.2B market cap)
The company’s revenues are derived mainly in North America, although CEO Neil Ashe has made mentions in recent quarters about strengthening its global geographic reach with its Intelligent Spaces Group. The company delivered $4 billion in sales in fiscal year 2022, and is expecting sales to be in the $3.9 billion to $4.0 billion range for the current fiscal year that ends next month on August 31.
During the company’s third quarter earnings call on April 4, Acuity Brands reported “a slowing in the order rate for our project business” which was seemingly part of the root cause that dropped its common stock price from around $183 to $163 on that day – and it has remained hovering around the $160’s since.
Signify (€ 3.4B market cap)
Signify reported full-year 2022 sales of EUR 7.5 billion. One-third (33%) of global sales were derived from the United States. If the Euro gains noticeable strength compared to the US Dollar, it may cause the US share to decline in the future. Signify, Philips, Color Kinetics and Cooper Lighting Solutions are among the notable Signify brands in North American markets.
Citing market volatility, Signify refrained from issuing full-year sales forecasts during its earnings call in January, and maintained this stance in May when CEO Eric Rondolat spoke with financial analysts, offering no further revenue guidance. As the world's largest lighting corporation, Signify boasts unparalleled global diversification compared to other companies on this list. In addition, a significant portion of Signify's operations is tied to consumer markets more than its publicly traded lighting counterparts are.
LSI Industries ($ 349M market cap)
LSI’s stock saw an impressive 83% gain from $6.64 to $12.15 in 2022. The company’s 2023 fiscal year just ended on June 30, but results aren’t yet published. Harkening back to 2022, the company’s lighting segment delivered 51% of overall revenues.
Fiscal year 2023 has been a strong growth year for lighting, so we expect the overall lighting share to tick upwards slightly when the official results are shared in a few weeks. Total company revenues are expected to be approximately $500 million in 2023.
Zumtobel (€ 317M market cap)
The Zumtobel Group is active worldwide, but Europe remains the most important market with approximately 85% of total revenues which exceeded 1.2 billion EUR in the most recent fiscal year. The company, whose core brands are Zumtobel, Thorn and Tridonic, cites 5500 employees worldwide and just under 90 in the United States.
Dialight (£ 73.4M market cap)
In 2022, Dialight, a UK-based maker of LED industrial lighting, reported generating revenue of £169.7 million (approximately $218.9 million USD at the conversion rate of 1 GBP = $1.29 USD). The company's operations in North America were particularly strong, contributing £132.7 million to the total revenue, representing 78% of the overall revenue. This North American contribution converts to roughly $171.1 million USD.
Legrand
In 2022, Legrand reported a global revenue of €8.3 billion, equivalent to $9.13 billion USD, and a revenue of €3.2 billion, or $3.52 billion USD, in the United States. The company does not provide specific figures for each brand, but estimates suggest that the lighting sector (Focal Point, OCL, Finelite, Pinnacle, and Kenall) plus the Wattstopper and Encelium brands, generate a range of annual revenue from €770 million to €1 billion ($850 million to $1.1 billion USD).
Hubbell, Inc.
Is Hubbell still a lighting company? It’s been 16 months since the company’s commercial and industrial lighting business was sold to Current. That business generated approximately $515 million in sales in 2020. The most notable lighting pieces that still remain at Hubbell are Progress Lighting and a smattering of specialty lighting products within the Chalmit and Killark brands.
Orion Energy Systems ($ 54M market cap)
Orion reported revenue of $77.4M for its fiscal year 2023 (FY 2023) ended March 31, 2023. This figure represented a significant drop from FY 2022, when the company achieved revenue of $124.4M. The decrease in revenue of $47M, or about 38%, was primarily due to lower revenue from Orion's largest customer, The Home Depot, as well as delays in the start of certain large LED retrofit projects.
Energy Focus ($ 6.7M market cap)
This publicly traded company once logged annual revenues in excess of $60 million in 2015 and has seen sales steadily decline since then. In the trailing twelve months, the company has reported less than $6 million in revenue. In order to maintain Nasdaq compliance, the company recently executed a 1-for-7 reverse stock split.
