LSI Industries Rises on Strong Q2 Earnings and Revenue Beat
Company reports 15% growth in its Lighting segment and signals a positive outlook for the second half of its fiscal year, boosting investor confidence.
Shares of LSI Industries Inc. (NASDAQ: LYTS) gained traction in early trading after the Cincinnati-based manufacturer posted second-quarter fiscal 2026 results that surpassed analyst expectations on both revenue and profit. The company's performance was bolstered by significant growth in its Lighting segment and an optimistic forecast for its Display Solutions unit.
The stock climbed as much as 3.4% to $20.38 per share following the pre-market announcement. LSI reported adjusted earnings per share of $0.26, beating the consensus estimate of $0.22 by over 18%. Revenue for the quarter reached $147.0 million, exceeding the anticipated $140.1 million, according to its regulatory filing.
LSI's Lighting segment was a key driver of the quarter's success, with sales increasing 15% year-over-year. Orders for the segment also saw a 10% rise compared to the same period last year, indicating sustained demand for its illumination systems in the North American market. This performance helped offset temporary softness in the Display Solutions segment, which the company now expects to see a resumption of growth in.
“Our second-quarter results reflect continued strong execution of our strategic initiatives, resulting in significant year-over-year improvement in sales, profitability, and cash flow,” stated James A. Clark, President and CEO of LSI Industries, in the company's official earnings release. Clark highlighted an 8% increase in total company orders during the quarter, providing a positive outlook for the latter half of the fiscal year.
Beyond the top-line beat, LSI demonstrated notable improvements to its financial health. The company generated $23.3 million in free cash flow during the quarter and reduced its total debt by nearly $23 million. This deleveraging effort strengthens the company's balance sheet and provides greater operational flexibility moving forward.
In conjunction with its earnings, LSI's Board of Directors declared a regular quarterly cash dividend of $0.05 per share, payable to shareholders of record. The dividend underscores the board's confidence in the company's sustained cash generation and commitment to shareholder returns.
Analysts have set a consensus price target of $27.67 for LYTS, suggesting potential upside from its current trading level. The solid quarterly results, which topped Zack’s Consensus Estimate, could lead to revised forecasts as the market digests the company's growth trajectory in both its primary business segments. With a market capitalization of approximately $613 million, LSI Industries is positioning itself to capitalize on continued demand for high-quality lighting and display solutions across the retail, commercial, and industrial sectors.