LSI Industries Inc. (LYTS): BCG Matrix [Dec-2025 Updated]

You're after the straight story on LSI Industries Inc.'s portfolio health as of late 2025, so we've run the numbers through the classic Boston Consulting Group Matrix. Honestly, the picture shows a clear split: the Display Solutions segment is the undeniable Star, racking up $325.0 million in sales on a blistering 57% growth, demanding your focus. Meanwhile, the Lighting segment acts as the reliable Cash Cow, generating $34.7 million in Free Cash Flow despite its 5% sales dip, which funds the big bets. Now, you need to know where the real risk and reward lie among the Question Marks and Dogs-keep reading for the breakdown.

Background of LSI Industries Inc. (LYTS)

LSI Industries Inc. is a leading U.S. based manufacturer that designs, markets, and sells commercial lighting and retail display solutions. The company, founded in 1976, is headquartered in Cincinnati, Ohio, and serves various vertical markets including refueling and convenience stores, quick-service restaurants, and retail locations. As of late 2025, LSI Industries Inc. has approximately 2.17 K employees.

LSI Industries Inc. conducts its business through two primary reportable segments: the Lighting Segment and the Display Solutions Segment. The Lighting Segment provides outdoor and indoor lighting fixture and controls solutions, such as sensors and dimming technology, for commercial and industrial applications. The Display Solutions Segment focuses on exterior and interior visual image and display elements, including printed graphics and digital signage for retail environments.

Reviewing the most recently completed full fiscal year, which ended June 30, 2025, LSI Industries Inc. reported record net sales of $573.4 million, marking a 22% increase from the prior year period's net sales of $469.6 million. This growth was fueled by both organic expansion and contributions from acquisitions made during the year. For the twelve months ended June 30, 2025, the company posted a net income of $24.4 million, or $0.79 per diluted share, while adjusted net income reached $32.9 million, or $1.07 per diluted share.

Looking closer at the segment performance for the full fiscal year 2025, the Display Solutions Segment was the primary driver of top-line growth, with net sales increasing 57% to $325.0 million. Conversely, the Lighting Segment saw its net sales decrease by 5% year-over-year, ending the period with $248.4 million in net sales. The company finished fiscal year 2025 with a healthy balance sheet, reporting a ratio of net debt to trailing twelve months adjusted EBITDA of 0.8x as of June 30, 2025.

Carrying momentum into the new fiscal year 2026, LSI Industries Inc. reported strong results for the first quarter. Sales for Q1 2026 reached $157 million, which was a 14% increase compared to the first quarter of the previous year. Both segments delivered double-digit growth in that quarter, with Lighting sales up 18% and Display Solutions sales up 11%. Adjusted EBITDA for the first quarter of fiscal 2026 was $15.7 million, representing a 10% margin. As of December 2025, LSI Industries Inc. has a market capitalization of $0.55 Billion USD.

LSI Industries Inc. (LYTS) - BCG Matrix: Stars

You're looking at the engine room of LSI Industries Inc.'s current growth, and it's definitely the Display Solutions Segment. This unit fits the Star profile perfectly: high market share in a market that's still expanding rapidly.

For the fiscal year ending June 30, 2025, the Display Solutions Segment posted net sales of $325.0 million. To put that growth in perspective, segment sales climbed a massive 57% year-over-year for FY2025. That kind of expansion doesn't happen by accident; it shows you're leading the pack in a hot area. Honestly, this segment is the future of LSI Industries Inc., which is why it needs every dollar you can throw at it for promotion and placement to keep that market share lead.

The primary fuel for this growth comes from integrated solutions tailored for the refueling/c-store and grocery verticals. You're seeing substantial organic growth here, meaning the core business is thriving, but the recent acquisitions are accelerating the trend. For instance, the March 2025 acquisition of Canada's Best Holdings (CBH) for an all-cash price of $24.0 million plus a $7.0 million earnout is a clear move to grab more share. CBH, which had $24.2 million in annual sales, immediately brought higher EBITDA margins to the table, making it an immediately accretive, high-margin addition.

Here's a quick comparison of the two main segments for the full fiscal year 2025, so you can see the shift in LSI Industries Inc.'s revenue mix:

The strategy here is to invest heavily to maintain this leadership position. Stars consume a lot of cash to fuel that high growth rate, often resulting in a near break-even on cash flow for the unit itself. Still, if LSI Industries Inc. can sustain this success until the market growth naturally slows, this segment will transition into a Cash Cow, providing the company with reliable returns down the line. You need to keep funding the expansion into adjacent verticals like banking, which CBH helps unlock.

Key drivers keeping this segment in the Star quadrant include:

• Strong demand in refueling/c-store programs.
• Organic growth exceeding 50% in some prior quarters.
• Accelerated market share gains via bolt-on acquisitions like CBH.
• Focus on integrated solutions for national brands.

The total company sales for FY2025 hit a record $573.4 million, up 22% from the prior year, with Display Solutions being the clear driver of that overall increase. You've got to keep the investment flowing here; it's the best bet for LSI Industries Inc.'s long-term value creation.

Finance: draft 13-week cash view by Friday.

LSI Industries Inc. (LYTS) - BCG Matrix: Cash Cows

The Lighting Segment of LSI Industries Inc. is positioned as a Cash Cow, characterized by a high market share in a mature, albeit slightly contracting, segment, which generates substantial cash flow despite low growth prospects.

This segment posted net sales of $248.4 million for the full Fiscal Year 2025, representing a 5% decline compared to Fiscal Year 2024 sales. This sales contraction occurred despite the broader outdoor lighting market projecting a Compound Annual Growth Rate (CAGR) of 7.2% through 2035, and the architectural lighting market a projected growth of 5.9% in 2025. The segment's performance in the final quarter of FY2025 showed a rebound, with net sales reaching $72.7 million, a 12% year-over-year increase, suggesting potential stabilization.

Profitability within this segment remains robust, a hallmark of a strong Cash Cow. For the third quarter of FY2025, the operating margin expanded by 110 basis points to reach 13.3% of sales. Management attributed this strong margin performance to a favorable product mix shift and disciplined cost controls, which cushioned the impact of the sales decline.

The segment's ability to generate cash is evident in the full-year results for LSI Industries Inc. The company generated $34.7 million in Free Cash Flow for FY2025. This significant cash generation is crucial, as it was utilized to fund strategic investments, including the acquisition of Canada's Best Holdings within the Display Solutions business. The company's overall financial health supports this strategy, with the net debt-to-Trailing Twelve Months Adjusted EBITDA ratio standing at 0.8x at year-end June 30, 2025.

The core characteristics supporting the Cash Cow classification for the Lighting Segment include:

• Lighting Segment FY2025 Net Sales: $248.4 million.
• FY2025 Segment Sales Decline: 5%.
• Q3 FY2025 Operating Margin: 13.3%.
• Q4 FY2025 Segment Sales Growth: 12%.
• FY2025 Full Year Free Cash Flow: $34.7 million.

The segment's high relative market share in core outdoor and architectural lighting applications allows it to maintain high margins even as the market matures or experiences project timing volatility. The focus for LSI Industries Inc. is clearly on 'milking' this unit for cash while minimizing promotional spending, instead directing capital toward infrastructure improvements to further enhance efficiency.

Here is a comparison of key financial metrics for the Lighting Segment:

The segment's ability to expand its operating margin to 13.3% in Q3 FY2025, despite a 9% year-over-year sales decrease in that quarter, demonstrates strong pricing power and cost discipline. This cash generation is vital for LSI Industries Inc. to support other parts of its portfolio.

LSI Industries Inc. (LYTS) - BCG Matrix: Dogs

The Dogs quadrant in the Boston Consulting Group Matrix represents business units or product lines operating in low-growth markets with low relative market share. For LSI Industries Inc., this category is most clearly represented by the underperforming elements within the Lighting Segment, which collectively dragged down the segment's overall performance in fiscal year 2025.

These Dogs are characterized as legacy, commoditized lighting products outside the core vertical market strategy LSI Industries Inc. is advancing. They include older, non-LED lighting lines that lack differentiation and are likely being phased out. These units tie up capital without generating significant returns, making them cash traps in the current portfolio structure.

Statistically, the presence of these underperformers is evidenced by the full-year fiscal 2025 results for the Lighting Segment. While the Display Solutions Segment saw significant growth, the Lighting Segment's net sales for the twelve months ended June 30, 2025, were $248.4 million. This figure reflects a 5% decrease year-over-year from fiscal 2024, directly aligning with the scenario's description of sub-segments contributing to an overall sales decrease in the division.

The challenge is isolating the exact financial contribution of these specific Dog products, as the segment also saw a strong 12% sales growth in the fourth quarter of fiscal 2025, reaching $72.7 million. However, the full-year decline suggests that the rate of decline in the Dog categories outpaced the growth in the stronger, core lighting offerings for most of the year. These units are defintely candidates for divestiture or aggressive cost reduction because expensive turn-around plans usually do not help in low-growth, low-share environments.

Here is a comparison of the segments that house these potential Dogs against the company's overall performance for the twelve months ended June 30, 2025:

The characteristics that place specific product lines within the Lighting Segment into the Dogs quadrant include:

• Legacy, commoditized lighting products outside the core vertical market strategy.
• Older, non-LED lighting lines that are being phased out or have minimal differentiation.
• Product lines with declining sales volume that require maintenance capital but offer low returns.
• Sub-segments contributing to the overall 5% sales decrease in the Lighting division in FY2025.

The focus for management regarding these assets should be on minimizing cash consumption. You need to look closely at the capital expenditure required just to maintain these older lines. If the return on that maintenance capital is significantly below the cost of capital, divestiture becomes the clear path to free up resources for Stars or Question Marks.

LSI Industries Inc. (LYTS) - BCG Matrix: Question Marks

The Question Marks quadrant in the Boston Consulting Group Matrix represents business units operating in high-growth markets but currently holding a low relative market share. For LSI Industries Inc., this positioning is most evident within the newer, high-tech offerings of the Display Solutions segment, which requires substantial capital to build market presence.

The high-growth nature of this area is clearly reflected in the segment's financial performance for the fiscal year ended June 30, 2025. The Display Solutions Segment generated net sales of $325.0 million for the full fiscal year 2025, marking a significant year-over-year increase of 57%. This rapid expansion signals that the underlying markets for digital signage and large-format LED video screens are indeed growing quickly, demanding aggressive investment to convert this growth into dominant market share.

The strategic moves to capture this growth involve integrating recent acquisitions, which are themselves new, high-tech offerings or complementary businesses. The acquisition of Canada's Best Holdings (CBH) in March 2025 for an all-cash purchase price of $24.0 million, with a potential earnout of $7.0 million (totaling $31.0 million), is a prime example of the necessary investment. CBH became part of the Display Solutions segment in fiscal third quarter 2025, adding $8.9 million to that segment's sales in Q3 2025 alone.

These products and acquired entities consume cash to scale up, as they compete against established players in fast-evolving technology spaces. The strategy hinges on quickly increasing market share before these units stagnate and potentially become Dogs.

Key financial and strategic data points illustrating the Question Mark characteristics:

• Full Fiscal Year 2025 Display Solutions Segment Net Sales: $325.0 million.
• Full Fiscal Year 2025 Display Solutions Segment Growth: 57% year-over-year.
• CBH Acquisition Cost (Total Potential): $31.0 million.
• CBH Integration Start Date: Fiscal Third Quarter 2025.
• Q4 Fiscal 2025 Display Solutions Net Sales: $82.3 million.
• LSI Industries Inc.'s overall FY2025 Net Sales: $573.4 million.

The potential for these Question Marks to become Stars is tied directly to successful integration and market penetration. The company's overall strategy, 'Fast Forward 2028,' targets overall EBITDA margins of 11-12.5%, suggesting that the high-growth Display Solutions area must improve its returns significantly to meet these profitability goals.

The cross-selling opportunities between newly acquired Display companies like CBH and LSI Industries Inc.'s core lighting customer base represent the path to higher returns. The CBH acquisition, for instance, was noted to have approximately 80% of its fiscal 2024 revenue with customers not previously served by LSI Industries Inc., highlighting the need for investment to realize synergy and cross-sell potential.

The challenge for LSI Industries Inc. is allocating capital effectively to these units. If the investment in digital signage and large-format LED screens does not quickly translate into a larger relative market share, these cash-consuming units risk slipping into the Dog quadrant as market growth inevitably slows.