Acuity Brands Inc (AYI) 2024 Q1 法說會逐字稿

Good morning, and welcome to the Acuity Brands' Fiscal 2024 First Quarter earnings call. (Operator Instructions) Please be advised that today's conference is being recorded.

早安，歡迎參加 Acuity Brands 的 2024 財年第一季財報電話會議。 （操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to Charlotte McLaughlin, Vice President of Investor Relations. Charlotte, please go ahead.

現在我想將會議交給投資者關係副總裁夏洛特·麥克勞克林 (Charlotte McLaughlin)。夏洛特，請繼續。

Thank you. Good morning, and welcome to the Acuity Brands' Fiscal 2024 First Quarter Earnings Call. As a reminder, some of our comments today may be forward-looking statements based on our management's beliefs and assumptions and information currently available to our management at this time. These beliefs are subject to known and unknown risks and uncertainties, many of which may be beyond our control, including those detailed in our periodic SEC filings. Please note that our company's actual results may differ materially from those anticipated, and we undertake no obligation to update these statements.

謝謝。早安，歡迎參加 Acuity Brands 的 2024 財年第一季財報電話會議。提醒一下，我們今天的一些評論可能是基於我們管理層的信念和假設以及我們管理層目前可獲得的資訊的前瞻性陳述。這些信念受到已知和未知的風險和不確定性的影響，其中許多風險和不確定性可能超出我們的控制範圍，包括我們定期向 SEC 文件中詳細說明的風險和不確定性。請注意，我們公司的實際結果可能與預期有重大差異，我們不承擔更新這些聲明的義務。

Reconciliations of certain non-GAAP financial metrics with their corresponding GAAP measures are available in our 2024 first quarter earnings release, which is available on our Investor Relations website at www.investors.acuitybrands.com.

我們的 2024 年第一季財報中提供了某些非 GAAP 財務指標與其相應 GAAP 指標的對賬，該報告可在我們的投資者關係網站 www.investors.acuitybrands.com 上查閱。

With me this morning is Neil Ashe, our Chairman, President and Chief Executive Officer, who will provide an update on our strategy and give an overview of the quarter, and Karen Holcom, our Senior Vice President and Chief Financial Officer who will walk us through our fiscal first quarter financial performance. There will be an opportunity for Q&A at the end of this call. For those participating, please limit your remarks to 1 question and 1 follow-up if necessary.

今天早上與我在一起的是我們的董事長、總裁兼首席執行官尼爾·阿什（Neil Ashe），他將介紹我們的戰略最新情況並概述本季度的情況，我們的高級副總裁兼首席財務長凱倫·霍爾科姆（Karen Holcom）將引導我們了解我們第一財季的財務表現。本次電話會議結束時將有一個問答機會。對於參與的人，如有必要，請將您的評論限制在 1 個問題和 1 次跟進。

We are webcasting today's conference call live. Thank you for your interest in Acuity Brands.

我們對今天的電話會議進行網路直播。感謝您對 Acuity Brands 的興趣。

I will now turn the call over to Neil Ashe.

我現在將把電話轉給尼爾·阿什。

Thank you, Charlotte, and thanks to all of you for joining us this morning.

謝謝你，夏洛特，也謝謝大家今天早上加入我們。

We continue to demonstrate strong execution in our fiscal 2024 first quarter. We increased our adjusted operating profit, our adjusted operating profit margin and our adjusted diluted earnings per share. We generated significant free cash flow, and we allocated capital effectively to drive value. Both our Lighting and our Intelligent Spaces businesses continued to perform well during the quarter. Particularly in ABL, our performance was excellent. We increased adjusted operating profit by $15 million on $71 million less sales and increased the adjusted operating profit margin 280 basis points to 17.5%. Our strategy is yielding results. We're increasing product vitality, elevating service levels, using technology to improve and differentiate both our products and how we operate the business, and we are driving productivity.

我們在 2024 財年第一季持續展現強勁的執行力。我們增加了調整後的營業利潤、調整後的營業利潤率和調整後的稀釋每股收益。我們產生了大量的自由現金流，並有效地分配資本以推動價值。我們的照明和智慧空間業務在本季繼續表現良好。特別是在ABL中，我們的表現非常出色。我們將調整後營業利潤增加了 1,500 萬美元，銷售額減少了 7,100 萬美元，並將調整後營業利潤率提高了 280 個基點，達到 17.5%。我們的戰略正在取得成果。我們正在增強產品活力，提升服務水平，利用技術來改善和差異化我們的產品以及我們的業務運作方式，並且我們正在提高生產力。

Today, our products are perceived as being more valuable in the marketplace. At the same time, we are lowering costs. Our product vitality efforts are the combination of new product introductions and improvements to our existing portfolio to ensure that our products are more valuable to our customers and more profitable for us. Our Contractor Select portfolio is about 300 of our most popular products. They are used in common everyday lighting applications and are in stock at retailers and electrical distributors. We continue to invest in product vitality, and we have expanded our Lithonia Lighting ESXF Floodlight family. This is a better product for distributors because it allows them to carry less inventory and is better for contractors because it is easier to install.

如今，我們的產品被認為在市場上更有價值。同時，我們正在降低成本。我們的產品活力工作是將新產品的推出和現有產品組合的改進相結合，以確保我們的產品對客戶更有價值，並為我們帶來更多利潤。我們的承包商精選產品組合包含約 300 種最受歡迎的產品。它們用於常見的日常照明應用，並且在零售商和電氣經銷商處有庫存。我們繼續投資產品活力，並擴展了 Lithonia Lighting ESXF 泛光燈系列。對於分銷商來說，這是一種更好的產品，因為它可以減少他們的庫存，並且對於承包商來說更好，因為它更容易安裝。

This product family was first introduced in 2022 to offer a uniform lighting solution for parking lots, walkways and outer buildings. It uses switchable technology to provide installers 36 on-site options, including lumen output, color temperature, photocell and mounting options.

該產品系列於 2022 年首次推出，為停車場、人行道和外部建築提供統一的照明解決方案。它採用可切換技術為安裝人員提供 36 種現場選項，包括流明輸出、色溫、光電管和安裝選項。

Our design select portfolio consists of configurable product options that meet the key choices of lighting specifiers with high levels of service. This quarter, we added additional products in our downlighting, panel, emergency lighting and outdoor categories. As we expand the options available in this portfolio, our focus is on product vitality and making it easier for the specification community to chose superior solutions.

我們的設計精選產品組合由可配置的產品選項組成，可滿足照明規範制定者的關鍵選擇，並提供高水準的服務。本季度，我們在筒燈、面板燈、緊急照明和戶外類別中添加了更多產品。隨著我們擴展該產品組合中的可用選項，我們的重點是產品活力，並使規範社群更容易選擇卓越的解決方案。

Our efforts to elevate service are having a positive impact on our customers. In October, we were once again recognized by the voters of IMARK Electrical as one of the suppliers of the year for 2023. We also continue to invest in productivity improvements in our operations. Earlier this quarter, we traveled with a group of associates to our Mexican manufacturing facilities to open our new state-of-the-art Santa Rosa production facility, which includes our highly efficient new paint line. This facility embraces technology to deliver a better product to our customers and improves the efficiency of the paint line process while also reducing the environmental impact.

我們提升服務的努力正在對客戶產生正面影響。 10 月，我們再次被 IMARK Electrical 選民評選為 2023 年度供應商之一。我們也繼續投資於提高營運生產力。本季度早些時候，我們與一群同事一起前往我們的墨西哥製造工廠，開設我們最先進的聖羅莎新生產工廠，其中包括我們高效的新油漆生產線。該工廠採用的技術旨在為客戶提供更好的產品，提高塗裝線流程的效率，同時減少對環境的影響。

I'd like to highlight a couple of ways we're doing this. Our paint guns and torque guns in our new facility are powered by a high-efficiency air compressor that aims to reduce approximately half of our CO2 generation compared to the air compressor from our previous paint line. High-efficiency walls, burners and booster technology in our ovens require less gas than similar systems and use around 40% less natural gas than our previous infrared ovens. The transition to this facility has been seamless. We relocated an existing facility to the new SPF facility without any service interruption and now have capacity available for future growth.

我想強調我們這樣做的幾種方法。我們新工廠中的噴漆槍和扭矩槍由高效能空氣壓縮機提供動力，與我們先前噴漆生產線的空氣壓縮機相比，該壓縮機旨在減少約一半的二氧化碳排放量。我們的烤箱中的高效壁、燃燒器和增壓技術比類似系統需要更少的氣體，並且比我們以前的紅外線烤箱少使用約 40% 的天然氣。向該設施的過渡是無縫的。我們將現有設施遷移到新的 SPF 設施，沒有任何服務中斷，現在的容量可用於未來的成長。

Our combined paint and natural gas savings are delivering on our required financial return for the facility while also meeting our sustainability objectives. You can learn more about this project and other accomplishments in our recently released EarthLIGHT report, available on our ESG for Investors page on our Investor Relations website.

我們節省的油漆和天然氣綜合成本為設施提供了所需的財務回報，同時也實現了我們的永續發展目標。您可以在我們最近發布的 EarthLIGHT 報告中了解有關該項目和其他成就的更多信息，該報告可在我們的投資者關係網站上的投資者 ESG 頁面上找到。

Now moving to our Spaces Group. Our mission in our Intelligent Spaces business is to make spaces smarter, safer and greener through our strategy of connecting the edge to the cloud. Distech has the best edge control devices on the market, while Atrius will be the best in cloud applications.

現在轉到我們的 Spaces Group。我們智慧空間業務的使命是透過邊緣與雲端的連結策略，讓空間變得更智慧、更安全、更環保。 Distech 擁有市場上最好的邊緣控制設備，而 Atrius 將是雲端應用領域最好的。

At Distech, we are focused on expanding our addressable market in 2 ways. The first is geographic and the second is increasing what we control in a build space. This quarter, we continued our geographic expansion, adding several new system integrators in the U.K., Asia and Australia. In one of our original markets, France, our hard work is paying off. The Building Services Research and Information Association called out Distech as dominating the French building automation and control systems market in a newly released report.

在 Distech，我們專注於透過兩種方式擴大我們的目標市場。第一個是地理上的，第二個是增加我們對建築空間的控制。本季度，我們繼續進行地域擴張，在英國、亞洲和澳洲增加了幾家新的系統整合商。在我們最初的市場之一——法國，我們的努力正在得到回報。建築服務研究和資訊協會在最新發布的報告中稱 Distech 主導法國建築自動化和控制系統市場。

We also continue to increase what we can control in a build space. In October, we launched our Distech Resense Move sensor at several industry conferences in Europe. This is an advanced 7-in-1 ceiling-mounted sensor that is able to detect occupancy in spaces. It counts the number of people using a space, providing feedback on occupancy requirements to the building users. It is AI-powered and can be used to optimize indoor air quality, reduce energy and cleaning costs and enhance occupancy comfort. It will be revealed to our North American and international customers at the AHR Expo in Chicago later this month.

我們也繼續增加我們在建造空間中的控制能力。 10 月份，我們在歐洲的多個產業會議上推出了 Distech Resense Move 感測器。這是一款先進的七合一天花板安裝感應器，能夠偵測空間的佔用情況。它計算使用空間的人數，向建築用戶提供有關佔用要求的回饋。它由人工智慧驅動，可用於優化室內空氣品質、降低能源和清潔成本並提高居住舒適度。該產品將於本月稍後在芝加哥舉行的 AHR 博覽會上向我們的北美和國際客戶展示。

Our expansion into refrigeration controls is also going well with the integration of KE2 Therm on track and performing as we expected. During the quarter, we released the KE2 Therm Edge manager with a BACnet communication stack. This is the same open protocol technology that is used by Distech and is an important step to ensure compatibility between both the Distech edge controllers and the KE2 Therm edge controllers.

我們向製冷控制領域的擴張也進展順利，KE2 Therm 的整合已步入正軌並按我們的預期運作。本季度，我們發布了具有 BACnet 通訊堆疊的 KE2 Therm Edge 管理器。這與 Distech 使用的開放協定技術相同，是確保 Distech 邊緣控制器和 KE2 Therm 邊緣控制器之間相容性的重要一步。

Now turning to our outlook. The changes that we have made to the business are impactful and long lasting. Our order rates are growing both year-over-year and sequentially. We're back to typical lead times and absent the excess backlog from last year, we would be experiencing sales growth. We are focused on controlling what we can control and we are confident our execution will continue.

現在轉向我們的展望。我們對業務所做的改變是有影響力且持久的。我們的訂單率逐年增長且環比增長。我們回到了典型的交貨時間，如果沒有去年的過多積壓，我們將經歷銷售成長。我們專注於控制我們能控制的事情，我們有信心我們的執行將繼續下去。

In our Lighting and Lighting Controls business, we will continue to focus on delivering margin and cash flow. In our Spaces group, we will continue to grow geographically and by adding to what we can control in a build space. We're delivering applications that are making a difference.

在我們的照明和照明控制業務中，我們將繼續專注於提供利潤和現金流。在我們的空間團隊中，我們將繼續在地域上發展，並增加我們在建築空間中可以控制的內容。我們正在提供具有影響力的應用程式。

Now I'll turn the call over to Karen, who will update you on our first quarter performance.

現在我將把電話轉給凱倫，她將向您介紹我們第一季業績的最新情況。

Thank you, Neil, and good morning to everyone on the call.

謝謝你，尼爾，祝所有參加電話會議的人早安。

We started the year with strong performance. We increased our adjusted operating profit by $14 million year-over-year, improved our adjusted operating profit margin by 250 basis points over the prior year and by 40 basis points sequentially. We increased our adjusted diluted earnings per share by $0.43 year-over-year and generated cash flow from operations of $190 million. We continue to improve our businesses and allocated capital effectively.

我們以強勁的業績開始了這一年。我們調整後的營業利潤年增了 1,400 萬美元，調整後的營業利潤率比前一年提高了 250 個基點，比上年提高了 40 個基點。我們調整後的稀釋每股收益年增了 0.43 美元，營運現金流達到 1.9 億美元。我們不斷改善業務並有效配置資本。

For total AYI, we generated net sales in the first quarter of $935 million, which was $63 million or 6% lower than the prior year as a result of the lower net sales in our ABL business. This was partially offset by continued growth in the ISG business of 13% in the quarter.

就 AYI 總額而言，我們第一季的淨銷售額為 9.35 億美元，比上年減少 6,300 萬美元，即 6%，這是由於 ABL 業務淨銷售額下降所致。這被本季 ISG 業務 13% 的持續成長所部分抵銷。

We continue to deliver year-over-year margin improvement. During the quarter, our adjusted operating profit increased by $14 million on lower sales, while we expanded adjusted operating profit margin to 16.5%, an increase of approximately 250 basis points from the prior year. This increase was driven largely by the significant year-over-year improvement in our gross profit margin as we continued to execute and drive margin through product vitality, the management of price and cost and productivity improvements.

我們持續實現利潤率年增。本季度，由於銷售額下降，我們調整後的營業利潤增加了 1,400 萬美元，同時我們將調整後的營業利潤率擴大到 16.5%，比前一年增加了約 250 個基點。這一增長主要是由於我們的毛利率同比顯著提高，因為我們繼續透過產品活力、價格和成本管理以及生產力提高來提高利潤率。

During the quarter, our adjusted diluted earnings per share of $3.72, increased $0.43 or 13% over the prior year, primarily as a result of higher net income and to a lesser extent, lower shares outstanding due to the share repurchases.

本季度，我們調整後的稀釋每股收益為3.72 美元，比上年同期增加0.43 美元，即13%，這主要是由於淨利潤增加，以及在較小程度上由於股票回購導致的流通股減少。

In ABL, net sales were $876 million in the quarter, a decrease of around 7% compared with the prior year, driven by declines across most of our channels, offset slightly by continued strong performance in our retail channel. Sales growth in ABL this quarter had a challenging year-over-year comparison as the results in the first quarter of fiscal 2023 benefited from working down an elevated level of backlog. ABL's adjusted operating profit increased 11% to $154 million on lower net sales and we delivered adjusted operating profit margin of 17.5%, a 280 basis point improvement over the prior year.

在 ABL 中，本季淨銷售額為 8.76 億美元，與上年相比下降約 7%，這是由於我們大多數通路的下滑所致，但零售通路持續強勁的業績略有抵消。本季 ABL 的銷售成長與去年同期相比具有挑戰性，因為 2023 財年第一季的業績得益於積壓水準的下降。由於淨銷售額下降，ABL 的調整後營業利潤成長了 11%，達到 1.54 億美元，調整後營業利潤率為 17.5%，比上年提高了 280 個基點。

ISG's net sales for the first quarter were $64 million, an increase of 13% as Distech continued to grow and KE2 Therm performed as we expected. ISG's adjusted operating profit was $10 million.

ISG 第一季的淨銷售額為 6,400 萬美元，成長 13%，因為 Distech 持續成長，KE2 Therm 的表現符合我們的預期。 ISG 調整後的營業利潤為 1000 萬美元。

Now turning to our cash flow performance. We generated $190 million of cash flow from operating activities for the first quarter of fiscal 2024, an increase of $3 million over the prior year, primarily due to an improvement in net income partially offset by a decrease in cash flow from working capital.

現在轉向我們的現金流表現。 2024 財年第一季度，我們從經營活動中產生了 1.9 億美元的現金流，比前一年增加了 300 萬美元，這主要是由於淨利潤的增長被營運資本現金流的減少部分抵消。

During the first quarter of fiscal 2024, we continue to allocate capital consistent with our priorities. We invested $15 million in capital expenditures and allocated approximately $50 million to repurchase around 300,000 shares. Since the beginning of the fourth quarter of fiscal 2020, we have repurchased over 9 million shares at an average price of about $143 per share, which was funded by organic cash flow.

在 2024 財年第一季度，我們繼續根據我們的優先事項分配資本。我們投資了 1,500 萬美元的資本支出，並撥款約 5,000 萬美元用於回購約 30 萬股股票。自2020財年第四季初以來，我們以每股約143美元的平均價格回購了超過900萬股股票，資金來源為有機現金流。

To wrap up, we had a strong quarter, particularly in ABL. We continued to deliver strong margin and cash flow performance. We grew adjusted operating profit and improved adjusted operating profit margin. We increased adjusted diluted earnings per share, generated strong cash flow from operations and allocated capital effectively. We are pleased with our performance, and we will reevaluate the outlook at the midpoint of the year.

總而言之，我們度過了一個強勁的季度，尤其是在 ABL 領域。我們持續提供強勁的利潤率和現金流表現。我們增加了調整後營業利潤並提高了調整後營業利潤率。我們增加了調整後的稀釋每股收益，從營運中產生了強勁的現金流，並有效地配置了資本。我們對我們的表現感到滿意，我們將在今年年中重新評估前景。

Thank you for joining us today. I will now pass you over to the operator to take your questions.

感謝您今天加入我們。現在我將把您轉交給接線員回答您的問題。

(Operator Instructions) Our first question comes from the line of Joe O'Dea with Wells Fargo.

（操作員說明）我們的第一個問題來自富國銀行的 Joe O'Dea。

So -- I mean, really impressive gross margin obviously this quarter. I think just any additional detail unpacking that you talked kind of high level on vitality, productivity and price cost. But anything in terms of kind of quantifying that bridge when we think about sequentially gross profit down kind of less than what we saw out of the revenue decline and trying to appreciate sort of what some of the moving pieces are there and then bigger picture just the sustainability of a 45.8% gross margin?

所以——我的意思是，本季的毛利率確實令人印象深刻。我認為您所談到的任何其他細節都在活力、生產力和價格成本方面達到了很高的水平。但是，當我們考慮連續的毛利下降幅度小於我們從收入下降中看到的水平時，任何量化這座橋的事情都會發生，並試圖了解一些移動的部分，然後更大的圖景只是45.8%的毛利率能否持續？

Yes. Thank you, Joe. Good morning to all of you. So -- as we unpack the margin performance, a couple of things to talk about. First of all, obviously, our year is off to a really good start. We're taking the companies to levels of performance that it has never seen before and these margins are the results of the impacts of the strategy and the work that our team has been doing to implement that around product vitality, around service, around technology and around productivity. That is culminated in this performance, specifically in this quarter, we're recognizing that our products, as I said in the prepared remarks, are being valued for their impact in the marketplace, which affords us the opportunity to manage price strategically. We continue to take cost out of the production of the products. So the output is the margin that you see.

是的。謝謝你，喬。各位早安。因此，當我們分析利潤率表現時，有幾件事需要討論。首先，顯然，我們的一年有了一個好的開始。我們正在將公司帶到以前從未見過的績效水平，這些利潤是策略影響的結果，也是我們團隊圍繞產品活力、服務、技術和實施策略所做的工作的結果。圍繞著生產力。這在這一業績中達到了頂峰，特別是在本季度，我們認識到，正如我在準備好的發言中所說，我們的產品因其對市場的影響而受到重視，這為我們提供了策略性管理價格的機會。我們持續降低產品生產成本。所以輸出就是你看到的邊距。

This quarter was mildly impacted by some mix. The -- our Controls business was strong. Our ISG is obviously growth accretive, margin accretive and return accretive, so that has some impact. But when you boil it all down, this quarter is a result, and the margin performance in this quarter, is a result of the strategy and the work that we've been doing around product vitality, around service, around technology and around productivity.

本季受到一些因素的輕微影響。我們的控制業務非常強勁。我們的 ISG 顯然具有成長增值、利潤增值和回報增值的作用，因此會產生一些影響。但當你把這一切歸結起來時，這個季度就是一個結果，這個季度的利潤率表現是我們圍繞產品活力、服務、技術和生產力所做的策略和工作的結果。

And just a quick clarification because you did make the point in prepared remarks and just kind of reiterated there, where products perceived is more valuable in the marketplace today. I thought about sort of the pricing dynamic over the last couple of years as being priced in response to cost. But is it fair to sort of deduce that this quarter, you're actually in the market sort of taking price up because it's the value that you're delivering, and so you're still able to achieve price up?

只是快速澄清一下，因為您確實在準備好的評論中指出了這一點，並且只是在那裡重申了，當今市場上被認為更有價值的產品。我認為過去幾年的定價動態是根據成本定價的。但可以公平地推斷，本季度，您實際上在市場上漲價了，因為這是您提供的價值，因此您仍然能夠實現價格上漲？

So we -- I believe that's a fair conclusion. Yes, we are realizing the benefits in the first quarter price. We talked about in the last call and in the second quarter, we also implemented a price increase. So we're demonstrating to the market that we will continue to manage price. So -- and that's obviously in the second quarter, so has no impact on these numbers. But -- but as I've said consistently, we're moving to strategically manage price. And by that, we mean that, number one, our products need to be valued in the marketplace because they need to -- to deserve to be valued. We're in a good position on that front.

所以我們——我相信這是一個公平的結論。是的，我們正在意識到第一季價格的好處。我們在上次電話會議中談到，在第二季度，我們也實施了漲價。因此，我們向市場證明我們將繼續管理價格。所以——這顯然是在第二季度，所以對這些數字沒有影響。但是，正如我一直所說的那樣，我們正在轉向策略性地管理價格。我們的意思是，第一，我們的產品需要在市場上受到重視，因為它們需要——值得受到重視。我們在這方面處於有利地位。

The second around our product vitality efforts is that we need to demonstrate that we can make more money with profit as a result of those prices, which is what we're doing from a cost perspective. So -- so I believe this is a good foundation.

圍繞我們產品活力的第二個努力是，我們需要證明我們可以透過這些價格賺更多的錢並獲得利潤，這就是我們從成本角度來看正在做的事情。所以——所以我相信這是一個很好的基礎。

Now obviously, these are extraordinary margins. So we don't need to continue to perform at this level for the rest of the year, but to deliver outstanding results, but we feel very good about the how in these margins.

顯然，這些利潤率非常高。因此，我們不需要在今年餘下的時間內繼續保持這個水平，而是需要提供出色的業績，但我們對這些利潤率的表現非常滿意。

Our next question comes from the line of Tim Wojs with Baird.

我們的下一個問題來自 Tim Wojs 和 Baird 的對話。

Maybe just my first question. Neil, you had kind of talked about in the prepared remarks that order rates kind of improved sequentially and that they're up year-over-year. I know it's probably hard, but I'll ask the question anyway. I mean, how much of that do you think is just the year-over-year comparisons kind of lapping some of the backlog depletion and a lead time improvement versus maybe what's going on in the underlying end market?

也許只是我的第一個問題。尼爾，您在準備好的發言中談到訂單率有所改善並且逐年上升。我知道這可能很難，但我還是會問這個問題。我的意思是，您認為其中有多少只是同比比較，即一些積壓的減少和交貨時間的改善，與潛在終端市場的情況相比？

Yes. Thanks for the question, Tim. Let me unpack that because I think this is really important.

是的。謝謝你的提問，提姆。讓我來解開這個問題，因為我認為這非常重要。

So -- so our net sales is obviously a result of our shipments in the period. The shipments in the period are a result of the orders that led up to at times the lead time basically. So we are now in a position where our lead times have more normalized. In other words, the order and the shipment rates are relatively consistent with each other. And so it's important that on both the sequential basis and on a year-over-year basis, our order rates are modestly up, in other words, without last year's comparable sales would be growing.

因此，我們的淨銷售額顯然是我們在此期間發貨的結果。在此期間的出貨量基本上是有時導致交貨時間的訂單的結果。因此，我們現在的交貨時間更加正常化。換句話說，訂單和出貨率是相對一致的。因此，重要的是，無論是環比還是同比，我們的訂單率都在適度上升，換句話說，如果去年的可比銷售額不會成長。

Last year was -- the net sales were the beneficiary of backlog reduction from orders which had been placed earlier. So -- the order -- when we talk about this order rate being up modestly, that versus the daily order rate of last year's first quarter and last year's fourth quarter. So -- the best way that we've come to think about this is that there was more of a pull forward last year industry-wide than there was a cycle. So -- so in effect, we processed a lot more business last year than that existed.

去年的淨銷售額受益於早期訂單積壓的減少。因此，當我們談論訂單率小幅上升時，訂單率是與去年第一季和去年第四季的每日訂單率相比。因此，我們思考這個問題的最佳方式是，去年全產業的推動力比週期更大。因此，實際上，我們去年處理的業務比現有的要多得多。

When you smooth the line over time and we've talked about this consistently, when you smooth the line over time, we will be -- the Lighting and Lighting Control business will be a consistent grower.

當你隨著時間的推移平滑生產線時，我們一直在討論這一點，當你隨著時間的推移平滑生產線時，我們將——照明和照明控制業務將成為持續成長的公司。

And I guess, have you seen any sort of kind of underlying improvement in the end market? I mean obviously, rates have kind of moved back with what the Fed has done. I'm just kind of curious if you see that in your order rates at all?

我想，您是否看到終端市場有任何潛在的改善？我的意思是，顯然，隨著聯準會的舉措，利率有所回落。我只是有點好奇你是否在訂單價格中看到了這一點？

Yes. So obviously, we're seeing -- if it's year-over-year improvement and sequential improvement, there is improvement in our order rate. As we look forward to our -- kind of our view on the macro, as I've been consistent with this, we don't have a better crystal ball than you do. Our -- we are confident in the current levels of the order rate and the performance of the order rate.

是的。顯然，我們看到——如果是逐年改善和環比改善，我們的訂單率就會有所改善。當我們期待我們對宏觀的看法時，正如我一直堅持的那樣，我們沒有比你們更好的水晶球了。我們對目前的訂單率水準和訂單率表現充滿信心。

As I said last quarter, we're comfortable operating in this environment. And as we look forward, we feel pretty good about where things are. Our outlook doesn't expect things to get materially better or materially worse basically. So as Karen said, we'll reevaluate at the middle of the year where we are for the rest of the year.

正如我上季所說，我們在這種環境下運作很舒服。當我們展望未來時，我們對事情的現狀感到非常滿意。我們的前景基本上並不指望事情會變得實質上變得更好或實質上變得更糟。正如凱倫所說，我們將在年中重新評估今年剩餘時間的情況。

And then maybe just the second question, just on maybe margins. Just given where the gross margins have kind of landed over the last couple of quarters, I mean, has that changed how you think about kind of the reinvestment that you'd want to make or need to make in the business to drive above-market growth? Or do you think it's just kind of a higher base level of margin for the business kind of going forward?

然後也許只是第二個問題，只是在邊緣。考慮到過去幾季毛利率的下降情況，我的意思是，這是否改變了您對業務中想要或需要進行的再投資以推動高於市場水平的看法生長？或者您認為這只是業務未來發展的更高的基本利潤水平？

It's a little bit of both, and I would say on that front, Tim, we don't believe that these margins are a result of harvesting. So we believe that they're the outcome of the strategy, as I've said kind of -- and I won't continue to be redundant on it. But I believe there are an outcome. So we believe this is a point in time.

兩者兼而有之，蒂姆，在這方面我想說，我們不相信這些利潤是收穫的結果。因此，我們相信它們是該戰略的結果，正如我所說的那樣，我不會繼續在這方面多餘。但我相信會有一個結果。所以我們相信這是一個時間點。

At the same time, we also are beginning to focus on verticals and areas where we haven't on the Lighting side, either been strong or participated at all. A very small example, we made a tiny investment in Horticulture. Why? Because we think over the next kind of period of time that will be an opportunity and so we're positioning for that now. So we'll start to make those kind of investments, Tim, so that we can continue to hopefully expand the addressable market on the Lighting side.

同時，我們也開始關注垂直領域和我們在照明領域尚未涉足的領域，要么是實力雄厚，要么根本沒有參與。舉一個很小的例子，我們在園藝方面進行了少量投資。為什麼？因為我們認為在接下來的一段時間內這將是一個機會，所以我們現在正在為此做好準備。因此，蒂姆，我們將開始進行此類投資，以便我們能夠繼續擴大照明方面的潛在市場。

And then I don't want to miss the opportunity to talk about Spaces. And Karen can address the specifics of the quarter -- the financials in the quarter, if necessary later. But in the big picture, the Spaces Group is growth accretive, margin accretive and returns accretive. And we feel really good about what we're doing there and their impact -- their ability to continue to impact the company going forward.

然後我不想錯過談論空間的機會。如有必要，凱倫可以稍後討論本季的具體情況——本季的財務狀況。但從大局來看，Spaces Group 具有成長成長、利潤成長和回報成長的作用。我們對我們在那裡所做的事情及其影響感到非常滿意——他們有能力繼續影響公司的未來。

Our next question comes from the line of Chris Snyder with UBS.

我們的下一個問題來自瑞銀集團的克里斯·史奈德。

I wanted to follow up on the gross margin up a 410 basis points year-on-year despite the sales decline, which is really impressive. It seems to us that the driver there is one price cost. You guys have helped prices costs have moderated due to the technology, the vitality and all the stuff you mentioned, Neil, but also some level of selectivity, which you've talked to over the past couple of quarters. When we think about that 410 basis points, could you kind of break down the build between selectivity and price cost improvement over the last year?

儘管銷售額下降，但我想跟進毛利率比去年同期上升410個基點，這確實令人印象深刻。在我們看來，司機有一個價格成本。你們幫助價格成本有所緩和，這得益於技術、活力和你提到的所有東西，尼爾，還有一定程度的選擇性，你在過去幾個季度中談到過這一點。當我們考慮 410 個基點時，您能否分解去年選擇性和價格成本改善之間的關係？

Yes, I'll start. Karen, you fill in for us.

是的，我要開始了。凱倫，你代替我們。

We have not built a walk directly from -- to break down the 410. So I'm going to do this more off the top of my head, Chris, than I am kind of reading on a walk.

我們還沒有直接建造一條步行道來分解 410。因此，克里斯，我會更多地憑自己的想法來做這件事，而不是在散步時閱讀。

Big picture. Let's start with -- let's start with price. So -- as we've said consistently, we managed price to where we think we need to be in the marketplace. So -- Obviously, we have real strength in Contractor Select. You can see the retail channel was up this quarter. It's the growth spot despite the fact that net sales were down. So -- so obviously, we're meeting the market at that level of the market.

大圖景。讓我們從價格開始。因此，正如我們一直所說的那樣，我們將價格控制在我們認為市場需要的水平。所以——顯然，我們在承包商選擇方面擁有真正的實力。您可以看到本季零售通路有所成長。儘管淨銷售額下降，但它仍然是成長點。所以——很明顯，我們正在這個市場水平上迎合市場。

On the project side, we have the ability to choose which projects we take, obviously. So in our pricing and then our bidding on those projects, we are choosing which projects we want to invest it in. And so -- and we do invest in some projects. So this is not -- we're not pure price takers here. We are choosing and based on the marketplace. And that's really the key for us is that when we talk about managing price strategically, we're meeting price where it needs to be.

在專案方面，顯然我們有能力選擇我們要進行的專案。因此，在我們的定價以及對這些項目的投標中，我們正在選擇我們想要投資的項目。因此，我們確實投資了一些項目。所以這不是——我們不是純粹的價格接受者。我們正在選擇並基於市場。對我們來說真正的關鍵是，當我們談論策略性管理價格時，我們正在滿足所需的價格。

Second, on the cost front. So obviously, there's been material improvements in the portfolio over the course of the last 3 years, and that continues. That has allowed us to create a more normalized distribution of margin within the portfolio. So we don't have the laggards that we had in the past. And so it's not wholly dependent on mix in a way that it has been in the past.

其次，在成本方面。很明顯，在過去的三年裡，產品組合有了實質的改進，而且這種情況還在繼續。這使我們能夠在投資組合內創建更標準化的保證金分配。因此，我們不再像過去那樣落後。因此，它不再像過去那樣完全依賴混合。

Now I would say that this quarter, we had a good quarter in Controls and obviously ISG performed at a higher growth level than ABL. So there is some mix impact, but it is modest. It is not determinative.

現在我想說的是，本季我們在控制方面表現良好，顯然 ISG 的成長水準高於 ABL。因此，存在一些混合影響，但影響不大。它不是決定性的。

And then finally, to your point on cost moderating, there are kind of -- there are some obvious post-pandemic costs, which have changed, steel containers, et cetera. And it's worth kind of calling out containers as an example because now we're dealing with obviously the Red Sea challenges. So container costs that were about $3,000 per container can now rise as much as $6,000 per container. With that in context, at the peak, those were in the $20,000 per container kind of rate. So that gives you an idea of kind of where those differences are. And so we have a plan to deal with those higher container costs for the remainder of the year.

最後，就您對成本調節的觀點而言，有一些明顯的大流行後成本已經發生了變化，例如鋼製貨櫃等。值得以貨櫃為例，因為現在我們正在應對明顯的紅海挑戰。因此，每個貨櫃約 3,000 美元的貨櫃成本現在可能會上漲至每個貨櫃 6,000 美元。考慮到這一點，在高峰時期，每個貨櫃的價格為 20,000 美元。這樣您就可以了解這些差異在哪裡。因此，我們計劃在今年剩餘時間內應對貨櫃成本上漲的問題。

So when I summarize those 3 things together. One is, as I said in the remarks, our products are being recognized for their value in the marketplace. That's fundamental. That's key. That's number one. Two is, the strategy has produced a more consistent result across our portfolio. So mix is less impactful than it may have been in the past. And then the third is, we've moved aggressively to get to a more consistent cost basis on materials.

所以當我把這三件事總結在一起時。一是，正如我在發言中所說，我們的產品因其在市場上的價值而受到認可。這是根本。這是關鍵。這是第一名。二是，該策略在我們的投資組合中產生了更一致的結果。因此，混合的影響力不如過去。第三是，我們積極採取行動，以實現更一致的材料成本基礎。

I appreciate that. And if I could just may follow up more thematically. It sounds like a lot of it say, we want to get price for the value we're bringing to the market. But the company has always been -- it's prickly. I know, Neil, you have only been there for a few years, but over your time, I think the company has always been a leader on technology and a leader on product quality. So what's kind of flipped there to get the gross margin from 41%, 42% now to 45% plus? Because it feels like a lot of the -- you've always kind of leading on the product technology side.

我很感激。如果可以的話，我可能會在主題上進行更多跟進。聽起來很多人都在說，我們希望獲得與我們為市場帶來的價值相符的價格。但該公司一直很棘手。我知道，尼爾，你只來了幾年，但隨著時間的推移，我認為公司一直是技術的領導者，產品品質的領導者。那麼，到底是怎樣的轉變才能讓毛利率從現在的 41%、42% 提高到 45% 以上呢？因為感覺很多——你在產品技術方面總是處於領先地位。

Yes. Thanks, Chris. These things take time. I wish I was not as old as I am, but I've been around the barn more than once. And you just realize that like kind of all of these changes are cumulative and it takes time for them to all kind of line up. And obviously, and this is a conversation that we have with our team here, which is that we're taking the company to levels of performance that it's never seen before. That's true in the market -- broader market where the competence of our product quality cascades through our sales team, through our independent sales agents, et cetera, through distributors, through the service levels and the programs that we've put in place. So those things cumulatively add up to the performance that you're seeing today.

是的。謝謝，克里斯。這些事情需要時間。我希望我沒有那麼老，但我已經不只一次去過穀倉了。你就會意識到，所有這些變化都是累積的，需要時間讓它們排列起來。顯然，這是我們與我們的團隊進行的對話，我們正在將公司帶到以前從未見過的績效水平。在市場上也是如此——在更廣泛的市場中，我們的產品品質能力透過我們的銷售團隊、我們的獨立銷售代理商等、透過經銷商、透過我們制定的服務水準和計劃而級聯。因此，這些因素累積起來就構成了您今天看到的性能。

Our next question comes from the line of Ryan Merkel with William Blair.

我們的下一個問題來自瑞安·默克爾和威廉·布萊爾的對話。

So my first question, Neil, can you talk about large projects back market? How is activity? Are you seeing delays, cancellations? Or is that sort of improving? Just what's the latest update?

所以我的第一個問題，尼爾，你能談談市場上的大型專案嗎？活動怎麼樣？您是否看到延誤、取消？或者說這種情況正在改善？最新更新是什麼？

Yes, Ryan, thanks. I mean we called out the order rate to kind of demonstrate that we're finding a new kind of normal. I think anecdotally, there's a lot of talk around big projects in kind of calendar '25, that sort of period, whether it's infrastructure or other things. I think that's just kind of the general kind of on the street sentiment about kind of what's going on out there. So other than that, we're in a relatively -- I think we're in a kind of a new normal from a consistency perspective.

是的，瑞安，謝謝。我的意思是，我們調出訂單率是為了表明我們正在尋找一種新的常態。我認為，有趣的是，在 25 世紀這樣的時期，有很多關於大型專案的討論，無論是基礎設施還是其他事情。我認為這只是街頭對正在發生的事情的普遍看法。除此之外，我們相對而言──我認為從一致性的角度來看，我們處於一種新常態。

Okay. So you're not seeing large projects be particularly weak?

好的。那麼您沒有看到大型專案特別薄弱嗎？

I mean, anecdotally, there's some discussion about kind of that. I don't know what weak means. And I think that's a -- it's worth us all kind of taking a step back and saying, okay, if we had an industry-wide pull forward over kind of, call it, '22 and '23, which is what we're talking about on our comparables, that has manifested in net sales higher than order rates for some period as we were very clear about that in '23. Now with order rates and shipments more equilibrated and a normal relationship in a period, this is kind of the normal run rate of the market. And so yes, there are some good days and some bad days within that, obviously. So -- but it's not -- we don't -- we're not viewing a cliff on the horizon anywhere.

我的意思是，有趣的是，有一些關於這一點的討論。我不知道弱是什麼意思。我認為這是值得我們大家退後一步說，好吧，如果我們在整個行業範圍內向前推進，稱之為“22 和 23”，這就是我們正在做的談到我們的可比數據，這在一段時間內表現為淨銷售額高於訂單率，因為我們在23 年就非常清楚這一點。現在訂單率和出貨量比較均衡，一段時間內關係正常，這算是市場的正常運作率。所以，是的，顯然，其中有一些美好的日子，也有一些糟糕的日子。所以——但事實並非如此——我們沒有——我們並沒有在任何地方看到地平線上的懸崖。

Okay. And then I had a question on gross margin as well. Obviously, first quarter was really strong. Normal seasonality would put you at about 45% for the year. I'm just curious, is there any reason that we should be below that is the biggest risk just sales and fixed cost deleverage at this point?

好的。然後我還有一個關於毛利率的問題。顯然，第一季的表現非常強勁。正常的季節性將使您全年的成長率約為 45%。我只是很好奇，是否有任何理由讓我們應該低於目前最大的風險（僅是銷售和固定成本去槓桿化）？

Karen, do you want to take that?

凱倫，你想接受這個嗎？

Yes, Ryan. So in terms of seasonality, just when we look at where we are today, I think we are probably -- that Neil said, order rates and shipment rates are coming in alignment. So it's looking like we're getting back to seasonality, but we haven't fully seen that. On the margin side, when you look at where we are comparative to the first quarter last year, we ended up last year at 45.1%. So we increased our gross profit margin throughout the year. And as Neil described, that was a combination of our strategy and also executing on some costs that were higher in the first half of the year that moderated in the second half.

是的，瑞安。因此，就季節性而言，當我們看看今天的情況時，我認為我們可能會——尼爾說，訂單率和發貨率正在趨於一致。所以看起來我們正在回歸季節性，但我們還沒有完全看到這一點。在利潤率方面，當你看看我們與去年第一季的比較時，我們去年的利潤率為 45.1%。因此，我們全年的毛利率有所提高。正如尼爾所描述的，這是我們的策略和執行上半年較高但下半年放緩的一些成本的結合。

So really, if you look at where we are now, we think this is a pretty strong level of gross profit impacted by the mix for Controls impacted by the mix of the higher ISG. So I would say that around this level is probably pretty high, but we expect to be pretty confident in our gross profit margin.

所以，實際上，如果你看看我們現在的處境，我們認為這是一個相當強勁的毛利水平，受到較高 ISG 組合影響的控制組合的影響。所以我想說，這個水平可能相當高，但我們預計對我們的毛利率非常有信心。

Our next question comes from the line of Christopher Glynn with Oppenheimer & Company.

我們的下一個問題來自奧本海默公司的克里斯多福‧格林 (Christopher Glynn)。

Congrats on a strong start to the year. I was curious on Design Select, still kind of early days, but anything kind of pithy or interesting, you could share about the market reception on that rollout?

祝賀今年取得了良好的開局。我對 Design Select 很好奇，雖然還處於早期階段，但是您可以分享一下有關該推出的市場反響的任何簡潔或有趣的內容嗎？

The market reception has been really strong. So we continue to tweak how it's presented in the market so that people can understand it. The industry has historically focused on something that's called Quick Ship. And so sometimes this is confused for Quick Ship, it is not Quickship -- this is an overhaul of a group of products that the specification community can know that they can choose and the options they can choose with those products. And so that's starting to manifest as we talked about, nothing -- I'm thinking -- I'm trying to think of a pithy answer for you. I don't have a good pithy answer for you, but we're really -- or a good anecdote for you, but it is progressing really well, and we're pleased with where it is.

市場反應非常強烈。因此，我們繼續調整它在市場上的呈現方式，以便人們能夠理解它。該行業歷來專注於所謂的「快速發貨」。因此，有時這會與 Quick Ship 混淆，它不是 Quickship——這是對一組產品的徹底修改，規範社區可以知道他們可以選擇這些產品，以及他們可以為這些產品選擇的選項。因此，正如我們所談論的那樣，這一點開始顯現出來，沒什麼——我在想——我正在努力為你想出一個簡潔的答案。我沒有一個簡潔明了的答案給你，但我們確實——或者對你來說是一個很好的軼事，但進展非常順利，我們對目前的情況感到滿意。

Okay. Well, that was pithy enough for me. And then on the seasonality, it sounds like I think Karen said, not declaring victory really, if I could paraphrase, but sort of leaning into normal seasonality. I think is the message I got there as we look at the forward quarters. I'm curious, the market is one part of that. And then it sounds like maybe your share momentum relative to the market in any given period might be adding muscle. So I'm curious about the interplay of that versus market when we say that we're kind of leaning towards normal seasonality here.

好的。嗯，這對我來說已經夠簡潔了。然後關於季節性，我認為凱倫所說的，並不是真正宣布勝利，如果我可以解釋的話，而是有點傾向於正常的季節性。我認為這是我在展望未來幾季時得到的資訊。我很好奇，市場是其中的一部分。聽起來，在任何特定時期內，你的股票相對於市場的動力可能會增加力量。因此，當我們說我們傾向於正常季節性時，我很好奇這與市場的相互作用。

Yes. So let me kind of take your comment. Thank you for paraphrasing Karen. That was a long answer to get to. We're not declaring victory yet, but that's exactly what the message was meant to be.

是的。所以讓我接受你的評論。謝謝你對凱倫的解釋。這是一個很長的答案。我們還沒有宣布勝利，但這正是我們想要傳達的訊息。

The -- so building up, first of all, on what we can control. We feel very, very good about what we control. So that is -- that's the kind of the foundation. I think a lot of questions we've gotten from this crowd over the course of the last few quarters is, "Hey, are you sacrificing -- are you sacrificing share for margin?" And we don't believe that we are. We've said that consistently as we've gone through. So -- so that culminates in the order rates that we are describing. So up sequentially and up year-over-year. However, modestly, they're up sequentially and year-over-year. So that is, as I said earlier, we believe these things are cumulative. In other words, the market really starting to realize those things.

因此，首先要建立在我們可以控制的事情上。我們對自己所控制的事情感覺非常非常好。這就是——這就是基礎。我認為在過去幾個季度中，我們從人群中得到的很多問題都是，“嘿，你是否在犧牲——你是否為了利潤而犧牲份額？”但我們並不相信我們是這樣的。正如我們所經歷的那樣，我們一直這麼說。因此，我們所描述的訂單率達到了頂峰。因此依序上升並且逐年上升。然而，適度地，它們連續上升並且逐年上升。也就是說，正如我之前所說，我們相信這些事情是累積的。換句話說，市場真正開始意識到這些事情。

As I said, when we open, we don't need to operate at these levels of margin for the rest of the year to deliver outstanding results. So -- so we don't have outrageous aspirations for the remainder of the year. But we're very confident in the quality, the how of how we're delivering these results.

正如我所說，當我們開業時，我們不需要在今年剩餘時間以這樣的利潤水平運作來取得出色的業績。所以——所以我們對今年剩餘時間沒有過高的期望。但我們對交付這些成果的品質和方式非常有信心。

Our next question comes from the line of Jeffrey Sprague with Vertical Research.

我們的下一個問題來自垂直研究領域的 Jeffrey Sprague。

Maybe just kind of picking up on that, I know you don't want to kind of speak to the framework or the guidance every quarter. But coming off this quarter and thinking about what you said about you don't need to do anything heroic now for the remainder of the year. What would -- in your mind, what would drive you to the bottom half or bottom even 2/3 of that larger framework that you put out?

也許只是想了解這一點，我知道您不想每個季度都談論框架或指導。但在本季結束後，想想你所說的話，你現在不需要在今年剩下的時間裡做任何英雄事。在您看來，什麼會推動您到達您推出的較大框架的下半部分或底部，甚至 2/3？

Yes. So let me unpack that a little bit and make sure kind of we're all on the same page. It is not our desire to provide quarterly guidance or update guidance on a quarterly basis. Karen was clear in her prepared remarks that we are going to take a look at the outlook and framework at the middle of the year, which is inconsistent with how we would normally do things. So obviously, we can do the math also. If we take consensus plus our (inaudible) this quarter on an EPS basis, you get way up in the -- in our EPS range. So -- so as she said, we'll take a look going forward in the middle point of the year.

是的。因此，讓我稍微解釋一下，並確保我們都在同一頁上。我們不希望提供季度指導或按季度更新指導。凱倫在她準備好的演講中明確表示，我們將在年中審視前景和框架，這與我們通常的做事方式不一致。顯然，我們也可以做數學計算。如果我們在每股盈餘的基礎上採取共識加上本季的（聽不清楚），那麼你的每股盈餘範圍就會大幅上升。因此，正如她所說，我們將在今年年中展望未來。

And then just on SG&A. So that did move up a couple of hundred bps on a full year basis last year and up again this quarter, probably some deleverage on the sales decline obviously. But -- where are we at in terms of kind of getting to a normalization there or the ability to deliver some operating leverage on the SG&A line?

然後就是SG&A。因此，去年全年這一數字確實上升了幾百個基點，本季又上升了，這可能是對銷售下滑的明顯去槓桿化。但是，我們在實現正常化或在 SG&A 線上提供一些營運槓桿的能力方面處於什麼位置？

Sure, Jeff. As you recall in the fourth quarter, we did take some costs out of the ABL business. So we feel pretty good about the cost reductions as we evaluate how we do the work. And we think we're really at the right level of investment from where we need to be to leverage when the sales growth comes back. That being said, in the ISG business, we did have some isolated cost this year that don't really affect the run rate of that business. So overall, I just feel good about the current level of investment going forward that we can leverage.

當然，傑夫。正如您在第四季度所記得的那樣，我們確實從 ABL 業務中削減了一些成本。因此，當我們評估我們的工作方式時，我們對成本降低感到非常滿意。我們認為，當銷售成長回升時，我們確實處於正確的投資水平，我們需要利用這一水平。話雖這麼說，在 ISG 業務中，我們今年確實有一些孤立的成本，這些成本並沒有真正影響該業務的運作率。總的來說，我對我們可以利用的當前投資水準感到滿意。

Our next question comes from the line of Jeff Osborne with TD Cowen.

我們的下一個問題來自 Jeff Osborne 和 TD Cowen 的對話。

Karen, I just had a question on what was the surprise relative to the guidance that you had given or the commentary 3 months ago around margins declining sequentially. Was it the strength in controls or the strength in the retail channel? Just trying to get a sense of the surprise because Neil had indicated that the 4 areas of vitality service, technology and productivity are essentially a culmination of years of investment. So what was the differential relative to 3 months ago's outlook?

凱倫，我只是想問一下，相對於您給出的指導或 3 個月前關於利潤率連續下降的評論，令人驚訝的是什麼？是控制力強還是零售通路強？只是想感受一下驚喜，因為尼爾表示，活力服務、技術和生產力這四個領域本質上是多年投資的結晶。那麼與 3 個月前的展望有何差異呢？

Yes. So what I would say is that I would not use the word surprise. We really weren't surprised by the level of gross margin that you're seeing this quarter. As Neil said, we're taking the company to levels of performance that it hasn't seen before. What -- kind of the gross margin of the 45.8%, the -- not typical level of performance that you would see. It's just a higher mix of control that had some impact this quarter. But overall, it's really the execution of the business, the continued growth of ISG and really the strategy as we execute over product vitality, service, technology and productivity improvements that are driving this level of gross profit margin.

是的。所以我想說的是，我不會使用“驚喜”這個詞。我們對本季看到的毛利率水準並不感到驚訝。正如尼爾所說，我們正在將公司的業績提升到前所未有的水平。 45.8% 的毛利率是多少，這不是您所看到的典型績效水準。只是更高的控制組合在本季產生了一些影響。但總體而言，真正推動毛利率達到這一水平的是業務的執行、ISG 的持續成長以及我們在產品活力、服務、技術和生產力改進方面執行的策略。

Yes, Jeff, just a quick build on that. What Karen had said last quarter is that normally, on a sequential basis, the gross margin would go down from Q4 to Q1.

是的，傑夫，只是在此基礎上快速構建。凱倫上季表示，通常情況下，按順序計算，毛利率會從第四季下降到第一季。

Got it. And then what was abnormal then this time? I guess I'm still confused on that.

知道了。那麼這次有什麼異常呢？我想我對此仍然感到困惑。

Performance. We continue to perform.

表現。我們繼續表演。

Perfect. And then, Neil, your predecessor, Vern, would -- I think the past 2 election cycles that highlighted weakness in the end markets and sort of the skittish buyer, if I recall, the terminology correct. I'm just curious, it sounds like your outlook on the macro is a bit more calm and pipeline looks good, et cetera. Do you anticipate the November election having any impact on either larger projects or smaller projects?

完美的。然後，尼爾，你的前任弗恩，我認為過去的兩個選舉週期凸顯了終端市場的疲軟和有點不安的買家，如果我沒記錯的話，這個術語是正確的。我只是很好奇，聽起來你對宏觀的看法更加冷靜，管道看起來不錯，等等。您預計 11 月的選舉會對大型計畫或小型計畫產生影響嗎？

I mean I don't know what Vern's logic was there. I can tell you that one thing I do know about Vern's feelings this morning is that he's a proud Michigan Wolverine. So I am sure that he was celebrating late into the night last night.

我的意思是我不知道弗恩的邏輯是什麼。我可以告訴你，我確實了解弗恩今天早上的感受的一件事是，他是一名自豪的密西根狼獾。所以我確信他昨晚慶祝到深夜。

As we look forward on the macro, the -- it is as we have described earlier in the call, we believe that we found a kind of new normal and we're not expecting -- we're not expecting anything extraordinarily positive or extraordinarily negative between now and the end of the calendar year.

當我們展望宏觀時，正如我們之前在電話會議中所描述的那樣，我們相信我們找到了一種新常態，我們沒有期待任何異常積極或異常的情況從現在到日曆年年底之間為負值。

Our next question comes from the line of Brian Lee with Goldman Sachs.

我們的下一個問題來自高盛的布萊恩李 (Brian Lee)。

This is Grace on for Brian. I guess there's a lot of questions on margins. So I have -- I just have one question on the demand trend on the order rate. I think a year ago, you were the first one to call out the interest rate impact and slower order rate. Now you talked about order rates up year-over-year and sequentially. So can you talk about what are the drivers of that? Are you taking market share? Is it because of lower interest rates? And also given how interest rates have been trending in the past few months, maybe this is too early to tell, but do you see any order rate acceleration based on your conversation with customers today?

這是布萊恩的葛蕾絲。我想關於利潤率有很多問題。所以我有一個關於訂單率需求趨勢的問題。我想一年前，您是第一個指出利率影響和訂單速度放緩的人。現在您談到了訂單率逐年上升和連續上升。那麼您能談談造成這種情況的驅動因素是什麼嗎？你正在搶佔市場份額嗎？是因為利率較低嗎？而且考慮到過去幾個月的利率趨勢，也許現在下結論還為時過早，但根據您今天與客戶的對話，您是否看到訂單率有所加速？

Yes, Grace. I mean, I want to kind of make the same kind of point. So this will be mildly redundant. But the order rate is obviously year-over-year. The issue on a last year basis -- not the issue. The results last year on the net sales basis were the results of order rates that had happened prior to that. We pointed out that through -- kind of through the course of the year that there was an impact on those order rates, you're seeing the impact on those order rates.

是的，格蕾絲。我的意思是，我想表達同樣的觀點。所以這會有點多餘。但訂單率明顯較去年同期。這是去年的問題——不是現在的問題。去年基於淨銷售額的結果是先前發生的訂單率的結果。我們指出，在這一年中，這些訂單率受到了影響，您將看到對這些訂單率的影響。

Now those order rates have normalized, and we have found kind of a consistent level of operating performance. So as we annualize those -- the comps and eliminate the excess backlog impact that happened at the beginning of FY '23, then you'll start to see a kind of more normal performance, specifically from the Lighting business. Obviously, ISG has continued to grow.

現在這些訂單率已經正常化，我們發現營運績效處於穩定水準。因此，當我們對這些指標進行年度計算並消除 23 財年年初發生的過多積壓影響時，您將開始看到一種更正常的表現，特別是來自照明業務的表現。顯然，ISG還在持續成長。

So over the long arc of time, this will continue the Lighting business, basically had a pull forward, an industry-wide pull forward, and will look like on a compounded annual growth rate exactly where we expect it to be, which is in the kind of mid single digits of growth rate.

因此，在很長一段時間內，這將繼續照明業務，基本上有一個推動力，一個全行業的推動力，並且複合年增長率看起來將完全符合我們的預期，即在中等個位數的增長率。

And I'm showing no further questions in the queue at this time. I'd like to turn the call back to Neil Ashe for closing remarks.

目前我在隊列中沒有顯示任何其他問題。我想將電話轉回尼爾·阿什，讓其致閉幕詞。

Thank you all for joining us this morning. Obviously, our year is off to a really good start, and we are both pleased about that and encouraged about what that means for the future.

感謝大家今天早上加入我們。顯然，我們的一年有了一個非常好的開始，我們對此感到高興，並為這對未來的意義感到鼓舞。

We are focused on the strategy, and it is yielding results both in ABL and in the Spaces Group, and we look forward to catching up with you again this time next quarter. Have a good day.

我們專注於該策略，並且它在 ABL 和 Spaces Group 中都取得了成果，我們期待下個季度的這個時候再次與您會面。祝你有美好的一天。

This concludes today's conference call. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。