Lennox International (LII) Q3 2026 Earnings Report
MX:LII Q3 2026 EPS Results
- Actual EPS
- MXN 129.15
- Consensus EPS
- MXN 137.63
- Beat/Miss
- Missed by -MXN 8.48
- One Year Ago EPS
- MXN 131.80
MX:LII Q3 2026 Revenue Results
- Actual Revenue
- MXN 29.69B
- Expected Revenue
- MXN 29.71B
- Beat/Miss
- Missed by -MXN 13.95M
- YoY Revenue Growth
- +10.21%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 10/28/2026
- Time
- Before Open
- Conference Call
- Wednesday, October 28, 2026
Lennox International's next earnings date is estimated for February 2, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
The call had a mixed sentiment. Revenue growth, strong Building Climate Solutions performance, acquisition contributions, cash flow generation, inventory-unit reductions, and multiple growth and productivity initiatives were positive. However, these positives were offset by lower segment profit and adjusted EPS, residential demand constraints, tariff and inflation pressure, limited price realization, margin contraction, and reductions to full-year revenue, earnings, and free cash flow guidance. Management remained confident in the long-term strategy but acknowledged meaningful near-term challenges.
For 2026, Lennox updated adjusted EPS guidance to $21 to $21.50, revenue growth to approximately 6% compared with 8% previously, price and mix growth to low single digit growth compared with mid single digit growth previously, and overall volume to a low single digit decline; BCS revenue growth is expected to be approximately 23%, up from 20%, while HCS revenue is expected to decline approximately 4% compared with the prior expectation for 1% growth, and free cash flow guidance was reduced to $700 million to $750 million from $750 million to $850 million. The expected tax rate is 21% compared with 20% in prior guidance, capital expenditures are expected to be approximately $225 million, fourth-quarter organic total sales are expected to decline mid single digit, full-year 1-step sales are expected to be down low double digits and 2-step sales up low single digits, enterprise margins are expected to decline about 200 basis points, BCS full-year margins are expected to be approximately flat, and HCS margins are expected to contract about 50 basis points. Lennox is not providing 2027 guidance today, but expects successful execution of its recovery plan to drive sales EBIT and EPS growth in 2027, with higher sales, higher EPS, and higher EBIT dollars, while the first half of 27 will be more challenging, industry volumes will be muted, and the company is aiming for price increases of more than the traditional 1-2.
- Third-Quarter Revenue GrowthThird-quarter revenue grew 10.2% to $1.6 billion, driven by continued outperformance in Building Climate Solutions, contributions from acquisitions, and improving residential sales volumes.
- Building Climate Solutions PerformanceBuilding Climate Solutions revenue increased 24% in the third quarter, including 15% organic growth and a 9% contribution from acquisitions. Higher sales volumes drove organic segment profit growth, and investments in factories and sales coverage improved quoting speed and product availability.
- Commercial Growth OpportunitiesThe company continued to grow with national accounts through full life-cycle equipment and service offerings, including new heat pump products. Emergency replacement business, commercial services, and national accounts were identified as ongoing growth opportunities.
- Acquisition ContributionsRecent acquisitions performed well and delivered approximately $20 million of operating profit accretion in the quarter. In Home Comfort Solutions, acquisitions contributed $39 million of revenue and $6 million of segment profit, in line with expectations.
- Improving Home Comfort Sales TrendsHome Comfort Solutions revenue increased 3% in the third quarter, while organic revenue declined 1%, improving from the 9% decline in Q2. Directed contractor sales declined 6%, improving from a 12% decline in Q2, while two-step organic sales increased 13%.
- Share Stabilization and Commercial Share GainsManagement said the residential share position began to stabilize after adopting a more dynamic pricing approach. The company also stated that it is gaining share in Building Climate Solutions and commercial markets, with no additional residential share loss beyond the previously discussed loss.
- Recovery Plan ExecutionLennox launched a recovery plan focused on pricing, productivity, portfolio, and promoters. Actions include more targeted regional and customer-segment pricing, rightsizing the residential business, accelerating productivity across manufacturing, distribution, and SG&A, refreshing the entry-tier portfolio, and strengthening relationships with national accounts and contractors.
- Entry-Tier Portfolio ExpansionThe company plans a full entry-tier product launch in Q1 2027, including unitary products, side-discharge offerings, and mini-splits. Management said the portfolio is intended to address homeowner affordability, provide contractors with more choices, and improve competitiveness against overseas offerings.
- Comfort-Aire and Century Acquisition ProgressManagement said the Comfort-Aire and Century acquisition is performing in line with expectations, providing strategic insight into entry-tier products and overseas supplier relationships. The company remains confident that the businesses will be accretive to EPS in 2027, with the larger portion of SG&A synergies expected when the businesses move onto Lennox's ERP platform.
- Cash Flow and Inventory Unit ReductionThird-quarter operating cash flow was $395 million, up $95 million from last year, and trailing-12-month free-cash-flow conversion reached 108%. Organic inventory units declined more than 15% year over year, and management expects further inventory reduction in the fourth quarter.
- Capital Deployment and Growth InvestmentsLennox repurchased approximately $151 million of shares during the quarter and plans to emphasize opportunistic repurchases while maintaining a disciplined net debt-to-adjusted-EBITDA ratio. The company continues to expect approximately $225 million of capital expenditures this year to support the entry-tier product launch, contractor training facilities, innovation labs for data-center cooling, and AI tools for growth and productivity.
- 2027 Productivity and Growth PlanManagement expects successful execution of the recovery plan to drive sales, EBIT, and EPS growth in 2027, with momentum building as the year progresses. The plan is based on muted industry volumes, resilient replacement demand, continued softness in new construction, share recapture, entry-tier expansion, parts and water-heater growth, commercial momentum, and productivity initiatives.
- Parts, Accessories, and Joint Venture OpportunitiesLennox said parts and accessories attachment rates are approximately 15% and that the company believes the rate should be twice that level. The Ariston water-heater joint venture and Samsung ductless joint venture are both doing well, are expected not to be margin dilutive, and expand the company's addressable market.
MX:LII Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Feb 02, 2027 | 2026 (Q4) | 69.11- | 84.03 | ― | ― |
| Oct 28, 2026 | 2026 (Q3) | 137.63129.15 | 131.8 | -2.01% (-2.64) | |
| Jul 29, 2026 | 2026 (Q2) | 144.81145.77 | 147.66 | -1.28% (-1.89) | |
| Apr 29, 2026 | 2026 (Q1) | 60.2363.26 | 63.63 | -0.59% (-0.38) | |
| Jan 28, 2026 | 2025 (Q4) | 89.7784.03 | 105.74 | -20.54% (-21.71) | |
| Oct 22, 2025 | 2025 (Q3) | 128.78131.80 | 126.13 | 4.49% (+5.66) | |
| Jul 23, 2025 | 2025 (Q2) | 129.57147.66 | 128.97 | 14.49% (+18.69) | |
| Apr 23, 2025 | 2025 (Q1) | 61.8863.63 | 65.52 | -2.88% (-1.89) | |
| Jan 29, 2025 | 2024 (Q4) | 80.42105.74 | 68.54 | 54.27% (+37.20) | |
| Oct 23, 2024 | 2024 (Q3) | 113.60126.13 | 101.4 | 24.39% (+24.74) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.