LSI Industries reported fiscal first-quarter lighting sales of $64.8 million, down 6% from $69.1 million a year earlier. The segment was also smaller than Royston Group, the retail-fixture company LSI acquired in March, which contributed $72.4 million in the quarter ended September 30. For lighting suppliers, however, the more telling detail was not the revenue comparison but the demand signal: customers are still requesting quotes, yet they are taking longer to convert those quotes into orders.
Total net sales rose 44% to $225.9 million, but 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. The company also reported that Lighting revenue was its lowest since the third quarter of fiscal 2026, when sales were $60.0 million, and down $5.5 million from $70.3 million in the fourth quarter. Over a longer view, the segment has stayed within a band of roughly $57 million to $73 million since the second quarter of fiscal 2022.
LSI's two reported segments now look very different. Display Solutions grew 83% to $161.0 million, including Royston and $88.6 million in legacy Display sales. Lighting accounted for 28.7% of company revenue, down from 43.9% a year earlier. Most of that shift reflects the arithmetic of a full Royston quarter compared with a year-earlier period that included no Royston sales.
Margins improve, but operating profit slips
Lighting's adjusted gross margin rose 10 basis points to 33.7% despite lower volumes. LSI credited focused price actions in response to cost inflation. Because dollar sales fell 6% while prices moved higher, unit volumes likely fell by more than revenue did; LSI did not disclose unit volumes, so that remains an inference. Adjusted operating income slipped to $8.2 million from $9.3 million, and adjusted EBITDA fell to $8.9 million from $9.9 million. The EBITDA margin was 13.7%, compared with 14.4% a year earlier. LSI said operating expenses held flat as it continued spending on new products and customer initiatives. Lighting still earned a richer margin than Display Solutions, which ran at 11.5%.
Quotes hold steady; conversion stretches
The leading indicators were flat rather than collapsing. Project quote activity held steady both sequentially and year over year. Lighting orders rose 1%, and LSI put book-to-bill at a steady 1.0, while a call-deck slide described it as above 1.0. The same deck added a detail that matters to distributors and agency principals: quote-to-order conversion is lengthening on large and small projects alike. Orders were up 5% in the fourth quarter and are up 1% now, showing some cooling in momentum.
LSI's release also carries two signals that can coexist. CEO James Clark said demand across key vertical markets remained resilient, while the same document blamed non-residential lighting softness for the organic decline. Both statements can hold if the key verticals lean mostly on Display. Lighting sales grew in refueling, sports and banking applications. They declined in parking, small retail, warehouse and automotive, which Clark described as areas where LSI maintains a strong position.
Refueling and QSR programs to watch
Refueling is the vertical worth watching. 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 that vertical, a hint that LSI might route more lighting through direct national-account relationships outside the traditional rep channel, though the release does not establish that as a trend.
LSI also has a potential restaurant opportunity. One large quick-service restaurant customer approved a 3,000-store interior renovation program, and LSI is one of three providers selected. Work is scheduled to start late in the third quarter of fiscal 2027 and run about three years. The customer is unnamed, and LSI has not said whether lighting is part of the scope. 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 that customers are still interested, but it does not guarantee they will sign. For lighting, LSI's quarter reads as a status report rather than a verdict. The quote logs say the work exists. The next two quarters will show whether stretched conversion cycles are a pause before orders are released or the early phase of a slowdown that has not yet been named.