Lennox International Reports Mixed Q1 Results, Maintains Full-Year EPS Guidance
LII is trading near its 52-week low of $434.06 (14% above the low).
Summary
Lennox International reported mixed first-quarter 2026 results with revenue growth but declining operating income and EPS, while maintaining its full-year EPS and free cash flow guidance and updating revenue growth expectations.
Key Events · Earnings and Guidance · LII
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Q1 2026 Financial Performance
Revenue increased 6% to $1.1 billion, but GAAP Operating Income decreased 3% to $164 million, and GAAP diluted EPS fell 8% to $3.35 year-over-year.
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Full-Year Guidance Maintained
The company maintained its full-year EPS guidance range of $23.50 - $25.00 and Free Cash Flow guidance of $750 million - $850 million, signaling confidence despite mixed Q1 results.
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Revenue Growth Guidance Updated
Full-year 2026 revenue growth guidance was updated to approximately 8%, including a 4% benefit from completed acquisitions.
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Operating Cash Flow Improvement
Operating cash flow significantly improved to $16 million in Q1 2026, compared to a $35.8 million cash outflow in the prior-year quarter.
Analysis · LII · Technology
Lennox International reported a mixed first quarter for 2026, with revenue increasing by 6% to $1.1 billion, but GAAP operating income declining by 3% and diluted EPS falling by 8% to $3.35 compared to the prior year. Despite these mixed results, the company maintained its full-year EPS guidance range of $23.50 to $25.00 and free cash flow guidance of $750 million to $850 million, which suggests confidence in its outlook. The company also updated its full-year revenue growth guidance to approximately 8%, including a 4% benefit from acquisitions. A significant positive was the improvement in operating cash flow, which turned positive at $16 million compared to a $35.8 million cash outflow in the prior-year quarter. However, share repurchases decreased substantially to $20 million from $85.2 million in Q1 2025. Performance was bifurcated, with the Home Comfort Solutions segment experiencing a 10% revenue decline, while the Building Climate Solutions segment delivered strong growth with revenue up 38%. Investors will likely focus on the company's ability to achieve its maintained full-year guidance given the Q1 performance and the segment-specific challenges.
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At the time of this filing, LII was trading at $495.52 on NYSE in the Technology sector, with a market capitalization of approximately $17.3B. The 52-week trading range was $434.06 to $689.44. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.