Lennox Cuts Full-Year Adjusted EPS Guidance to $21.00-$21.50 on Margin Miss
LII is trading near its 52-week low of $340.32 (2.9% above the low) on elevated volume (1.9× avg).
Summary
Lennox posted 10% Q3 revenue growth to $1.57 billion, but adjusted EPS fell 7% to $6.84 and management cut full-year adjusted EPS guidance to $21.00-$21.50 from $23.00-$24.00.
Key Events · Earnings and Guidance · LII
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Q3 Revenue Up 10% to $1.57B
Net sales rose to $1,572.5 million from $1,426.8 million, led by Building Climate Solutions revenue up 24% (15% organic).
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Adjusted EPS Falls 7%
Adjusted diluted EPS was $6.84 versus $7.38 a year ago; GAAP diluted EPS was $6.41 on net income of $221.2 million.
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Full-Year Guidance Cut
Adjusted EPS guidance was lowered to $21.00-$21.50 from $23.00-$24.00; revenue growth is guided at approximately 6%, including a 5% acquisition benefit.
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Residential Margin Compression
Home Comfort Solutions segment margin fell 490 basis points to 18.7% on competitive pressure, tariffs and lower factory absorption; segment profit dropped 18% to $175.7 million.
Analysis · LII · Technology
The guidance cut is the dominant fact here: Lennox grew Q3 revenue 10% to $1.57 billion, but profits fell short, with adjusted EPS of $6.84 down 7% and total segment margin down 240 basis points to 20.6%. Management cited heightened competitive pressure and persistent inflation, including tariffs, and lowered full-year adjusted EPS guidance to $21.00-$21.50 from $23.00-$24.00 — roughly a 9% reduction at the midpoint. With the stock already near its 52-week low, the read-through is that the residential business is defending share with price actions that are eroding profitability, while the commercial segment remains the offset.
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At the time of this filing, LII was trading at $350.06 on NYSE in the Technology sector, with a market capitalization of approximately $12.9B. The 52-week trading range was $340.32 to $587.27. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.