LSI Industries reported a 6% decline in fiscal first-quarter lighting sales as customers continued to request quotes but took longer to convert them into orders. For the quarter ended Sept. 30, Lighting revenue fell to $64.8 million from $69.1 million a year earlier. That was down $5.5 million from $70.3 million in the prior quarter and marked the segment’s lowest total since fiscal 2026’s third quarter, when sales were $60.0 million.
The result came inside LSI’s broader fiscal first quarter, when total net sales rose 44% to $225.9 million. The increase was driven largely by Royston Group, the retail fixture company LSI acquired in March, which contributed $72.4 million. Excluding Royston, organic sales declined 2% to $153.4 million. LSI attributed that decline to “demand softness within the North American non-residential lighting market.”
Lighting’s share of company revenue fell to 28.7% from 43.9% a year earlier, though most of that shift was arithmetic: this was a full Royston quarter measured against a year-earlier period with no Royston sales. Royston is reported inside Display Solutions, which grew 83% to $161.0 million. Within that segment, legacy Display sales were $88.6 million, ahead of Lighting’s $64.8 million. LSI still reports two segments.
Despite lower lighting volume, LSI said Lighting gross margin improved, crediting focused price actions in response to cost inflation. Lighting’s adjusted gross margin rose 10 basis points to 33.7%. The company did not disclose unit volume, but if prices rose while dollar sales fell 6%, unit volume likely declined by more; that is an inference from the disclosed figures, not a company statement.
At the segment level, 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 segment’s adjusted EBITDA margin was 13.7%, compared with 14.4% a year earlier. LSI said operating expenses held flat, with continued spending on new products and customer initiatives. Lighting remained more profitable than Display Solutions, which ran at an 11.5% margin.
Quotes hold steady, conversions stretch
LSI’s leading indicators were flat rather than collapsing. Project quote activity held steady sequentially and year over year, Lighting orders rose 1%, and the earnings release described book-to-bill as “steady at 1.0,” while a call deck slide put it above 1.0. The deck also said quote-to-order conversion is lengthening on both large and small projects.
Order momentum did cool. Lighting orders had risen 5% in the fourth quarter, according to LSI’s prior update, and were up 1% in the latest quarter. CEO James Clark said demand across LSI’s key vertical markets “remains resilient,” even as the same release blamed non-residential lighting softness for the organic sales decline. The two statements can coexist if the “key verticals” reference relies mostly on Display.
Lighting sales grew in refueling, sports and banking applications. They declined in parking, small retail, warehouse and automotive—verticals where Clark said LSI “maintains a strong position.” A strong position in a shrinking market offers limited comfort, particularly because several of those are sizable lighting markets.
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. Whether LSI might route more lighting through direct national-account relationships outside the traditional representative channel remains an open question; lighting growth in that vertical is a hint, not evidence.
Separately, one large quick-service restaurant customer has approved a 3,000-store interior renovation program, and LSI is one of three providers selected. Work is scheduled to begin late in fiscal 2027’s third quarter and run about three years. The customer is unnamed, and LSI has not said whether lighting is in scope. QSR demand is down double digits, and comparable Display sales rose just 1% as customers missed renovation schedules ahead of the holiday pause.
For lighting observers, the quarter is less a verdict than a status report. Steady quoting shows customers remain interested, but it does not guarantee orders. The next two quarters will show whether lengthening conversion cycles are a pause before releases arrive or the early phase of a slowdown that has not yet been named.