Lennox Reports Q4 Revenue & EPS Decline, but Projects 6-7% Revenue Growth and Strong FCF for 2026
LII is trading near its 52-week low of $443.19 (8.3% above the low).
Summary
Lennox International reported a decline in Q4 2025 revenue and adjusted EPS, but full-year 2025 adjusted EPS saw a slight increase, supported by significant share repurchases. The company provided positive 2026 guidance, projecting 6-7% revenue growth and strong free cash flow.
Key Events · Earnings and Guidance · LII
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Q4 2025 Financial Results
Revenue declined 11% to $1.2 billion, and adjusted diluted EPS decreased 22% to $4.45, primarily impacted by channel destocking and weak new construction sales.
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Full Year 2025 Performance
Full-year revenue was down 3% to $5.2 billion, but adjusted diluted EPS increased slightly to $23.16. The company achieved annual margins over 20% for the first time.
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Strong Share Repurchases
Lennox repurchased $482 million in common stock during 2025, significantly higher than the prior year, demonstrating a commitment to returning capital to shareholders.
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Positive 2026 Guidance
The company anticipates 2026 revenue to grow by 6-7% and projects adjusted EPS in the range of $23.50 to $25.00, alongside an estimated free cash flow of $750 million to $850 million.
Analysis · LII · Technology
Lennox International Inc. reported a challenging fourth quarter for 2025, with revenue declining 11% to $1.2 billion and adjusted diluted EPS falling 22% to $4.45, primarily due to channel destocking and softness in new construction within its Home Comfort Solutions segment. Despite the Q4 headwinds, the company achieved a slight increase in full-year 2025 adjusted diluted EPS to $23.16 on a 3% revenue decline, demonstrating resilience. Management highlighted achieving over 20% annual margins for the first time in the company's history. Looking ahead, Lennox provided a positive outlook for 2026, forecasting revenue growth of 6-7% and adjusted EPS in the range of $23.50 to $25.00, signaling an expected industry normalization and recovery. The company also plans for robust free cash flow of $750 million to $850 million and executed substantial share repurchases totaling $482 million in 2025, indicating strong capital return to shareholders.
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At the time of this filing, LII was trading at $480.00 on NYSE in the Technology sector, with a market capitalization of approximately $17.5B. The 52-week trading range was $443.19 to $689.44. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.