LSI Industries’ lighting business slipped in the fiscal first quarter ended September 30, with sales falling 6% to $64.8 million from $69.1 million a year earlier. The decline came as the company described a North American non-residential lighting market in which customers still request quotes but take longer to turn them into orders.
The quarter also reflected a changed corporate mix. Royston Group, the retail fixture company LSI acquired in March, contributed $72.4 million in sales, more than the entire Lighting segment. Royston sits within Display Solutions, which grew 83% to $161.0 million; legacy Display sales were $88.6 million. Lighting accounted for 28.7% of LSI revenue, down from 43.9% a year earlier, a shift driven largely by owning Royston for a full quarter versus none a year before.
Total net sales rose 44% to $225.9 million. Excluding Royston, organic sales fell 2% to $153.4 million. LSI attributed the organic decline to “demand softness within the North American non-residential lighting market,” a direct attribution the company put on the record.
Within lighting, the $64.8 million total was the segment’s lowest since fiscal 2026’s third quarter, when sales were $60.0 million, and $5.5 million below the $70.3 million posted in the fourth quarter. Over a longer view, Lighting has moved between roughly $57 million and $73 million since the second quarter of fiscal 2022.
Gross margin improved even as volume-related dollar sales fell. LSI credited “focused price actions in response to cost inflation.” Adjusted gross margin rose 10 basis points to 33.7%. Because prices moved higher while dollar sales declined 6%, unit volume likely fell by more; LSI has not disclosed that figure, and it remains an inference from the reported numbers.
Below the gross margin line, adjusted operating income declined to $8.2 million from $9.3 million, and adjusted EBITDA fell 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 carried a richer margin than Display Solutions, which ran at 11.5%.
Quotes Are Steady, Conversion Is Slower
The leading indicators were flat rather than collapsing. Project quote activity held steady sequentially and year over year, Lighting orders rose 1%, and LSI described book-to-bill as “steady at 1.0,” while a call-deck slide put it above 1.0. The more important detail for pipeline watchers was that quote-to-order conversion is lengthening on both large and small projects.
Order momentum has cooled, however. Lighting orders were up 5% in the fourth quarter and are up 1% now. The release also contains two signals that pull in different directions: CEO James Clark said demand across LSI’s key vertical markets “remains resilient,” while the same document blamed non-residential lighting softness for the organic sales decline. Both statements can coexist if the “key verticals” reference leans heavily on Display; readers must weigh how much each applies to Lighting.
Lighting sales grew in refueling, sports and banking applications. They declined in parking, small retail, warehouse and automotive, which Clark described as verticals where LSI “maintains a strong position.” A strong position in a shrinking pool offers limited comfort, especially because those include some of the segment’s larger 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 will route more lighting through direct national-account relationships outside the traditional representative channel is an open question; lighting growth in that same vertical is a hint, not yet evidence.
Separately, one large quick-service restaurant customer has approved a 3,000-store interior renovation program, and LSI is one of three selected providers. 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. That question matters because 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; it does not guarantee they will sign. For lighting readers, LSI’s quarter is less a verdict than a status report. The quote logs say work exists. The next two quarters will show whether extended conversion cycles are a pause before releases arrive or the early phase of a slowdown that has not yet been named.