LSI Industries’ lighting segment recorded $64.8 million in sales in the fiscal first quarter ended Sept. 30, down 6% from $69.1 million a year earlier. The decline came as parent company revenue rose 44% to $225.9 million, lifted by the March acquisition of retail fixture maker Royston Group, which contributed $72.4 million and outsold the legacy lighting business.
That comparison changes LSI’s revenue mix: lighting accounted for 28.7% of sales, down from 43.9% a year earlier, mostly because the latest quarter included a full period of Royston ownership while the year-earlier quarter included none. Display Solutions grew 83% to $161.0 million, including $88.6 million from the legacy display business. Excluding Royston, organic sales declined 2% to $153.4 million, which LSI attributed to demand softness in the North American non-residential lighting market.
For lighting, the $64.8 million total was the segment’s lowest since fiscal third quarter 2026, when sales were $60.0 million, and $5.5 million below the $70.3 million posted in the fourth quarter. The longer trend is less dramatic: quarterly lighting sales have stayed within a band of roughly $57 million to $73 million since the second quarter of fiscal 2022.
Profitability was mixed. LSI said lighting gross margin improved despite lower volume, crediting price actions taken in response to cost inflation; adjusted gross margin rose 10 basis points to 33.7%. Because prices rose while dollar sales fell 6%, unit volume likely declined by more, though LSI did not state that and the calculation is an inference. Adjusted operating income fell to $8.2 million from $9.3 million, and adjusted EBITDA declined to $8.9 million from $9.9 million, a 13.7% margin versus 14.4% a year earlier. The company said operating expenses held flat as it continued spending on new products and customer initiatives.
Demand signals were flat rather than collapsing. Project quote activity held steady both 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 slide put it above 1.0. Order growth had cooled from 5% in the fourth quarter. More important for distributors and contractors, LSI said quote-to-order conversion is lengthening on both large and small projects—the pipeline remains visible, but decisions are moving later.
Lighting sales grew in refueling, sports and banking applications. They declined in parking, small retail, warehouse and automotive, which CEO James Clark described as markets where LSI maintains a strong position. A strong share of a shrinking market offers limited comfort, especially because several of those are sizable lighting verticals. 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 can be true if the resilient “key verticals” refer mainly to display.
Refueling is the vertical to watch. 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. Lighting also grew in refueling, raising the question of whether LSI can route more lighting through direct national-account relationships outside the traditional representative channel. That remains a question, not evidence of a shift.
In quick-service restaurants, one large customer has approved a 3,000-store interior renovation program, and LSI is one of three selected providers. Work is scheduled to start late in fiscal third quarter 2027 and run about three years. The customer is unnamed, and LSI has not said whether lighting is in scope. The uncertainty matters because QSR demand is down by double digits, and comparable display sales rose only 1% as customers missed renovation schedules ahead of the holiday pause.
Steady quoting shows that customers are still planning work; it does not guarantee signatures. LSI’s quarter reads as a status report rather than a verdict. The next two quarters will show whether longer conversion cycles are a delay before orders are released or the early stage of a slowdown that has not yet been named.