Lennox International : 20260429 LII 1Q26 Earnings Presentation FINAL
LII
Published on 04/29/2026 at 07:11 am EDT
INTEGRITY | RESPECT | EXCELLENCE
EARNINGS RELEASE
APRIL 29, 2026
Navigating industry headwinds and mitigating tariff impacts
Reaffirming EPS Guidance
Full Year
Earnings Per Share*
$23.50 - $25.00
REVENUE
TOTAL SEGMENT
PROFIT*
TOTAL SEGMENT
PROFIT MARGIN*
$1.1B
$164
14.4%
+6% YoY
(3%) YoY
(130 bps) YoY
ADJUSTED EPS*
$3.35
OPERATING
CASH FLOW
$16M
NET DEBT / ADJ. EBITDA*
1.3x
(8%) YoY
+$52M YoY
+0.1x YoY
ECONOMIC OUTLOOK
Revenue Growth
Channel destocking complete in early Q2
Dealer and contractor confidence recovering
Consumer remains cautious - stable sentiment
New home construction remains weak
Growth initiatives gaining momentum
Cost Inflation
Metal and commodities inflation higher
Fuel and transportation cost increasing
Countermeasures Intensifying:
Productivity & material cost actions
Supply chain & manufacturing refinement
Vendor cost sharing
Pricing actions to offset costs
Tariff impact increasing
Sales improved sequentially within Q1
HOME COMFORT SOLUTIONS
Restocking in two step channel
Replace vs. repair stabilizing
Successful launch of water heaters
New heat pumps gaining traction
On-track integration of Supco
BUILDING CLIMATE SOLUTIONS
Industry volume stabilizing
Emergency replacement momentum
National account wins
Leveraging full lifecycle offerings
On-track Integration of Duro Dyne
Residential Heat Pumps
Signature collection cold climate
(down to -20°F)
Elite series side discharge
space-savings design
Merit series two stage heat pump
Lennox Powered by Samsung
ductless systems
RECENT PRODUCT INTRODUCTIONS
Strategos Commercial Rooftop Heat Pump
Backwards electrical compatibility for cost savings
Flexible heating options; electric, gas, or dual-fuel
Ultra-high efficiency with variable speed technology
Residential Heat Pump Water Heaters (Ariston JV)
Ariston JV for water heating
High-efficiency heat pump water heaters
Supports future convergence of HVAC and water heating
Lennox Home application support
Compact Residential Air Handlers
Space-efficient design for tight and retrofit installs
Improves installation efficiency
Optimized for high-SEER
Integrated with Lennox controls
Integrity | Respect | Excellence
(US$ MILLIONS)
($5M) or (3%)
+$63
$168
$164
($31)
($5)
($32)
2025
Volume Mix/Price Product
Cost
Other
2026
ROS 14.4%
ROS 15.7%
TOTAL SEGMENT PROFIT*
(US$ MILLIONS)
+6%
+5%
$1,135
$1,073
+9%
(8%)
2025
Volume Mix/Price
Other
2026
REVENUE
Adjusted EPS*
(8%) to $3.35
Commercial and M&A led growth
Residential markets soft but improved versus Q4
Production absorption costs weighed on profitability
* See appendix for reconciliation to GAAP performance; total segment profit includes unallocated corporate expenses
Revenue:
One step: ~(10%)
Two Step: ~(15%) M&A: ~+2%
Product Cost: Materials inflation and factory absorption
Other Cost: ~$2M M&A gain and SG&A inflation mostly offset by cost productivity
(US$ MILLIONS)
$721
$650
REVENUE
(US$ MILLIONS)
$124
$87
SEGMENT PROFIT
ROS 17.2%
ROS 13.3%
2025
2026
2025
2026
(10%)
($37)
(21%)
+9%
+2%
($56)
+$41
($23)
+$1
Volume
Mix/Price
Other
Volume
Mix/Price
Product Cost
Other
(US$ MILLIONS)
$485
$351
REVENUE
(US$ MILLIONS)
$96
$59
ROS 16.7%
ROS 19.7%
SEGMENT PROFIT
Volume: Strong Light Commercial National Accounts equipment and service
2025
2026
2025
2026
+38%
+$37
+17%
+9%
+12%
+$24
+$22
($8)
($1)
Volume
Mix/Price
Other
Volume
Mix/Price
Product Cost
Other
Product Cost: Materials inflation and production absorption, partially offset by factory productivity
Other: ~$7M M&A gains offset by SG&A inflation and distribution investments
CASH CONVERSION
OPERATING CASH FLOW
(US$ MILLIONS)
TTM FCF CONVERSION %*
LEVERAGE
NET DEBT TO ADJUSTED EBITDA* (TTM)
(36)
1Q25 2Q25 3Q25 4Q25 1Q26
1.3x
Cash Conversion Temporarily Constrained
95%
82%
81%
16
62%
78%
Inventory well positioned for summer
Good collections and payment leverage
Maintain a Strong Balance Sheet
0.8x
Share repurchases continued in Q1
Ongoing "Bolt-on" M&A interest
INVESTING FOR GROWTH
CAPEX
(US$ MILLIONS)
1Q25 2Q25 3Q25 4Q25
~250
Focus on Customer Experience and Cost efficiency
Innovation and training centers
Digital tech stack and data platforms
Distribution network expansion & optimization
2022 2023 2024 2025 2026
ERP modernization and AI tools
Integrity | Respect | Excellence
* See appendix for reconciliation to GAAP performance. Net debt is net of cash balances 9
*Before the impact of cost: inflation, investments, productivity, and M&A amortization
GROWTH
** Impact on Total Cost
OTHER GUIDANCE ITEMS
Current
Revenue Segment Profit
∆ YoY Incremental*
Prior
Revenue Segment Profit
∆ YoY Incremental*
Volume
Price | Mix
M&A
(LSD) (~35%)
+MSD ~90%
+MSD ~30%
(LSD)
+MSD
+MSD
(~35%)
~75%
~30%
Total LII
~8%
6% - 7%
HCS
~4%
~16%
~2%
~15%
BCS
Current
Prior
COST
∆ YoY
Inflation**
~+5%
~+2.5%
Investments
+$35M
+$35M
M&A Amortization
+$15M
+$15M
Productivity
($75M)
($75M)
Interest
$65M
$65M
Tax Rate
~20%
~20%
Share Count
~35M
~35M
Adjusted EPS
Free Cash Flow
$23.50 - $25.00
$750M to $850M
$23.50 - $25.00
$750M to $850M
ATTRACTIVE INVESTMENT OPPORTUNITY
Resilient Margin
Execution Consistency
and Disciplined
Capital Deployment Advanced Technology
Solutions with
Business Focused on
Sustainable HVACR
Growth End Markets with Strong Replacement Demand
Direct-to-Dealer Network
Talent & Culture Driven by
Core Values, Guiding Behaviors and Pay-for-Performance
INTEGRITY | RESPECT | EXCELLENCE
THANK YOU!
Change Year-over-Year
Q1 2026 Q1 2025
Volume Mix/Price Other Total
$ 650 $ 721
(21%) 9% 2% (10%)
485 351
17% 9% 12% 38%
$ 1,135 $ 1,073
Product
Q1 2026 Q1 2025
Volume Mix/Price Cost Other Total
$ 87 $ 124
$ (56) $ 41 $ (23) $ 1 $ (37)
96 59
24 22 (8) (1) 37
$ 182 $ 183
$ (32) $ 63 $ (31) $ - $ -
(19) (15)
- - - (4) (4)
$ 164 $ 168
$ (32) $ 63 $ (31) $ (4) $ (4)
- -
- -
- -
$ 164 $ 168
Net Sales
Home Comfort Solutions Building Climate Solutions Net sales, a GAAP measure
Segment Profit (1)
Home Comfort Solutions Building Climate Solutions
Total segment profit, a Non-GAAP measure Corporate and other(3)
Total segment profit, including unallocated Corporate and other expenses, a Non-GAAP measure Loss (gain) on sale from previous dispositions
Acquisition costs(2) Restructuring charges Operating income
We define segment profit (loss) as a segment's operating income (loss) included in the accompanying Consolidated Statements of Operations, excluding:
Restructuring charges,
Gain (loss) on sale of previous dispositions, and;
Acquisition costs
Recorded in Losses and other expenses, net in the accompanying Consolidated Statement of Operations.
Corporate and other expenses include unallocated corporate costs related to corporate administrative functions such as tax, treasury, accounting, internal audit, legal and human resources.
For the Twelve Months Ended March 31, (Unaudited)
2026 2025
Income before taxes, a GAAP Measure $ 983.0 $ 1,005.9
Interest expense, net 49.9 33.1
Restructuring charges, before tax 6.8 -
Other expense (income), net before tax 3.4 2.0
Pension settlements, before tax 0.8 0.5
Depreciation and amortization expense 116.1 96.7
Loss (gain) on sale from previous dispositions (0.9) 1.5
Adjusted EBITDA, a non-GAAP measure $ 1,159.1 $ 1,139.7
As of March 31, (Unaudited)
2026
2025
Total Debt
$ 1,523.3
$ 1,388.4
Less Cash
48.2
34.2
Less Short-term investments
2.0
0.5
Net Debt, a non-GAAP measure
$ 1,473.1
$ 1,353.7
Debt to Adjusted EBITDA ratio
1.3
1.2
For the Three Months Ended March 31,
(Unaudited)
For the Twelve Months Ended
(Unaudited)
2026
2025
1Q 2025
2Q 2025
3Q 2025
4Q 2025
1Q 2026
Net Cash provided by (used in) operating activities, a GAAP measure
$ 16.1
$ (35.8)
$ 932.7
$ 835.5
$ 684.1
$ 757.6
$ 809.5
Purchases of property, plant and equipment
(55.5)
(25.5)
(159.6)
(155.4)
(149.8)
(118.8)
(148.8)
Proceeds from the disposal of property, plant and equipment
0.7
0.5
2.5
2.3
1.7
1.4
1.6
Free cash flow, a Non-GAAP measure
$ (38.7)
$ (60.8)
$ 775.6 $ 682.4 $ 536.0 $ 640.2 $ 662.3
For the Twelve Months Ended
(Unaudited)
All figures are After Tax Amounts
1Q 2025
2Q 2025
3Q 2025
4Q 2025
1Q 2026
Net income, a GAAP measure
$ 816.4
$ 844.3
$ 865.1
$ 805.8
$ 793.3
Restructuring charges
- - - 5.1 5.1
Acquisition costs (a)
- - - 8.9 8.9
Loss (gain) on sale from previous dispositions
1.5 3.1 3.1 (0.7) (0.7)
Adjusted net income, a non-GAAP measure
$ 817.9 $ 847.4 $ 868.2 $ 819.1 $ 806.6
FCF Conversion 95% 81% 62% 78% 82%
(a) Recorded in Losses and other expenses, net in the Consolidated Statements of Operations
Disclaimer
Lennox International Inc. published this content on April 29, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 29, 2026 at 11:10 UTC.