Orion Energy Systems OESX, a leader in energy-efficient LED lighting, has just announced a significant contract extension with one of its major retail clients. The deal, lasting five years, will see Orion supplying all interior and exterior LED lighting fixtures for the customer's new store construction projects. The company estimates this contract will generate between $23 million and $30 million in total revenues, with annual earnings expected to range from $4.5 million to $6 million.

Growth Driven by Long-Term Relationships

This contract is not Orion’s first with this retail giant. Orion previously completed a full LED retrofit across the client’s existing stores, which is a testament to the success of the partnership. The continued trust between both parties highlights Orion’s reliability and the superior quality of its products.

A Step Toward Enhanced Revenue

With shipments beginning in Orion’s third-quarter fiscal 2025, this deal promises to significantly boost the company’s financials. Given the consistent demand for energy-efficient lighting in commercial retail spaces, the contract aligns well with the ongoing expansion of green building initiatives. By playing a key role in the new store construction projects, Orion secures a steady revenue stream for years to come.

Strengthening Orion's Nationwide Presence

The new contract also expands Orion’s footprint across the country, with the company already providing LED lighting maintenance to over 2,000 of the client’s stores. This commitment to both installation and maintenance services showcases Orion’s comprehensive approach to customer satisfaction, setting it apart in a competitive market.

With this contract, Orion not only strengthens its financial position but also enhances its reputation as a trusted partner in the energy-efficient lighting sector.

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OESX Share Price Performance

Shares of Orion have lost 4.6% over the past six months, against the industry’s 14.3% growth. The company has been facing significant inflationary pressures in the past several quarters, leading to many older contracts becoming unprofitable. In response to higher costs, OESX increased its pricing to align its profit margin more closely with its overall business. Also, continuous contact wins will help the company boost its topline (read more: Orion Receives $2M LED Lighting Projects From Automotive OEM).

OESX's Zacks Rank & Key Picks

OESX currently carries a Zacks Rank #3 (Hold).

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