LSI Industries’ lighting segment generated $64.8 million in sales in the fiscal first quarter ended Sept. 30, down 6% from $69.1 million a year earlier. The result left lighting slightly below the $72.4 million contributed by Royston Group, the retail fixture company LSI acquired in March.
The comparison underscores how much LSI’s revenue mix has changed. Lighting accounted for 28.7% of company revenue, down from 43.9% a year earlier. Most of that shift reflects the addition of a full quarter of Royston sales rather than a sudden collapse in lighting, but the segment’s direction was still lower.
Organic sales decline
Total net sales rose 44% to $225.9 million. Excluding Royston, organic sales declined 2% to $153.4 million. LSI attributed the decline to “demand softness within the North American non-residential lighting market,” a direct assessment that earnings releases do not always provide.
Lighting’s $64.8 million total was the segment’s lowest since the third quarter of fiscal 2026, when sales were $60.0 million. It was also $5.5 million below the $70.3 million posted in the fourth quarter. Over a longer period, the segment has ranged from roughly $57 million to $73 million since the second quarter of fiscal 2022.
Margins and orders
LSI said lighting gross margin improved despite lower volume, citing “focused price actions in response to cost inflation.” Adjusted gross margin rose 10 basis points to 33.7%. Because dollar sales fell 6% while prices rose, unit volume likely fell by more, though LSI did not state that and it remains an inference.
Below the gross margin line, adjusted operating income fell to $8.2 million from $9.3 million, and adjusted EBITDA declined to $8.9 million from $9.9 million. The adjusted EBITDA margin was 13.7%, compared with 14.4% a year earlier. LSI said operating expenses held flat because of continued spending on new products and customer initiatives. Lighting still earned a richer margin than Display Solutions, which ran at 11.5%.
Order indicators were flat rather than falling. Project quote activity held steady sequentially and year over year, lighting orders rose 1%, and the release described book-to-bill as “steady at 1.0,” while a call deck described it as above 1.0. The deck also said quote-to-order conversion is lengthening on both large and small projects.
That detail may be more useful to lighting distributors and agencies than the headline sales decline. Customers are still asking for quotes, but they are taking longer to turn those quotes into orders. Lighting orders were up 5% in the fourth quarter and are up 1% now, showing that momentum has cooled.
Vertical market split
LSI reported lighting sales growth in refueling, sports and banking applications. Sales declined in parking, small retail, warehouse and automotive, which CEO James Clark described as verticals where LSI “maintains a strong position.” A strong position in a shrinking market offers limited comfort, especially when several of those are among the segment’s larger markets.
Clark also said demand across LSI’s key vertical markets “remains resilient,” while the same release blamed non-residential lighting softness for the organic decline. Both statements can hold if the “key verticals” reference leans heavily on Display Solutions.
Refueling is worth watching. Display’s refueling and convenience-store sales rose 5%, and a 2,500-site refresh for a major oil company is expected to ramp through fiscal 2027 and into fiscal 2028. LSI has not said whether it will route more lighting through direct national-account relationships outside the traditional rep channel; lighting growth in that vertical is a hint, not evidence.
LSI also said one large quick-service restaurant customer approved a 3,000-store interior renovation program, with LSI selected as one of three providers. Work is scheduled to begin late in the third quarter of fiscal 2027 and run about three years. The customer is unnamed, and LSI has not said whether lighting is included in the scope. QSR demand is down double digits, and comparable Display sales rose just 1% as customers missed renovation schedules ahead of the holiday pause.
Steady quoting shows customers remain interested, but it does not guarantee they will sign. For lighting suppliers, LSI’s quarter reads as a status report: the quote logs say the work exists. The next two quarters will show whether stretched conversion cycles are a pause before orders are released or the early phase of a slowdown that has not yet been named.