Lennox International Inc
NYSE:LII
Lennox International Inc
Lennox International Inc., founded in 1895, is a stalwart in the HVAC (heating, ventilation, and air conditioning) industry, headquartered in Richardson, Texas. The company has built a robust reputation over the decades, priding itself on designing and manufacturing a range of energy-efficient climate control solutions. Lennox integrates cutting-edge technology with deep industry expertise, making it a trusted name in residential and commercial markets. This dual focus on both consumer and professional sectors allows Lennox to cater to a broad range of customers, offering everything from compact home air conditioning units to expansive industrial heating systems. What sets Lennox apart is its commitment to innovation and sustainability, exploring new ways to reduce energy consumption while enhancing user comfort.
Revenue generation at Lennox International hinges on manufacturing and selling HVAC products and systems. The company's operations are divided into three primary business segments: Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. Each segment contributes uniquely to Lennox's financial health. The Residential segment capitalizes on the constant demand for reliable home temperature control systems, particularly during extreme weather seasons. At the same time, the Commercial division caters to businesses and institutions requiring tailored large-scale solutions. The Refrigeration segment focuses on delivering top-notch cooling systems for food preservation and storage industries, benefiting from its alignment with vital sectors like supermarkets and foodservice. Through this diversified approach, Lennox secures a balanced revenue stream, leveraging its technological prowess and market reach to drive growth and maintain its position as a market leader.
Lennox International Inc., founded in 1895, is a stalwart in the HVAC (heating, ventilation, and air conditioning) industry, headquartered in Richardson, Texas. The company has built a robust reputation over the decades, priding itself on designing and manufacturing a range of energy-efficient climate control solutions. Lennox integrates cutting-edge technology with deep industry expertise, making it a trusted name in residential and commercial markets. This dual focus on both consumer and professional sectors allows Lennox to cater to a broad range of customers, offering everything from compact home air conditioning units to expansive industrial heating systems. What sets Lennox apart is its commitment to innovation and sustainability, exploring new ways to reduce energy consumption while enhancing user comfort.
Revenue generation at Lennox International hinges on manufacturing and selling HVAC products and systems. The company's operations are divided into three primary business segments: Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. Each segment contributes uniquely to Lennox's financial health. The Residential segment capitalizes on the constant demand for reliable home temperature control systems, particularly during extreme weather seasons. At the same time, the Commercial division caters to businesses and institutions requiring tailored large-scale solutions. The Refrigeration segment focuses on delivering top-notch cooling systems for food preservation and storage industries, benefiting from its alignment with vital sectors like supermarkets and foodservice. Through this diversified approach, Lennox secures a balanced revenue stream, leveraging its technological prowess and market reach to drive growth and maintain its position as a market leader.
Revenue Decline: Revenue fell 11% in Q4 and 3% for the full year, mainly due to weak residential and commercial demand and significant channel destocking.
Record Margins: Lennox achieved its highest-ever full year segment margin of 20.4%, reflecting improvements in production and operational efficiency.
EPS Growth: Adjusted earnings per share reached $23.16 for 2025, up 2% from the prior year.
Inventory & Cash Flow: Operating cash flow was $758 million for the year, with free cash flow of $640 million, exceeding previous guidance. Inventory remains $200 million higher than typical but is expected to normalize in Q2.
2026 Guidance: For 2026, Lennox expects revenue growth of 6%–7%, adjusted EPS of $23.50–$25, and free cash flow of $750–$850 million.
Cost Management: The company delivered more than $75 million in productivity savings in 2025 and expects a similar amount in 2026.
Strategic Investments: Over $300 million has been invested since 2022 to enhance operations, digital tools, and product offerings, with continued focus on innovation and training centers in 2026.
Outlook: Management is cautiously optimistic for 2026, expecting market stabilization, inventory normalization, and continued margin expansion.
