Lennox International (NYSE:LII) reported its third-quarter 2026 financial results on October 28, 2026, disclosing revenue of $1.6 billion, a 7% decline in adjusted diluted earnings per share, and a significant reduction to its full-year adjusted EPS guidance range.

Key Highlights

  • Revenue up 10%: Third-quarter revenue reached $1.6 billion, driven by organic growth in Building Climate Solutions and contributions from completed acquisitions.
  • GAAP diluted EPS of $6.41: Compared to $7.38 per share in the prior-year quarter; adjusted diluted EPS was $6.84, down 7%.
  • Full-year adjusted EPS guidance lowered: Updated range of $21.00 to $21.50, down from the prior range of $23.00 to $24.00.
  • Total segment profit declined 2%: Segment profit was $323 million, with margin declining 240 basis points to 20.6%, pressured by a $45 million headwind from product cost inflation including tariffs.
  • Home Comfort Solutions segment profit fell 18%: Revenue was $937 million, up 3%, but segment profit dropped to $176 million and margin declined 490 basis points to 18.7%.
  • Building Climate Solutions revenue rose 24%: Segment profit increased $26 million or 19% to $167 million, with segment margin of 26.2%.
  • Operating cash flow of $395 million: Up from $301 million in the prior-year quarter; share repurchases totaled $151 million.

Lennox Third-Quarter 2026 Results: Margin Pressure From Inflation and Tariffs

According to the filing, Lennox reported GAAP operating income of $312 million for the third quarter of 2026, down 5% year-over-year, with an operating margin of 19.8%, a decline of 320 basis points. The company attributed profitability headwinds to a $45 million impact from product cost inflation including tariffs and lower factory absorption, $15 million of higher fuel costs, and inflation across selling, general and administrative expenses and distribution. These were partially offset by $13 million from higher sales volumes, $21 million of mix and price benefits, and $20 million from completed acquisitions.

The Home Comfort Solutions segment, the company disclosed, saw revenue of $937 million, up 3%, while segment profit fell to $176 million from the prior-year period, representing an $40 million decline. The filing noted that targeted price adjustments were implemented in select market segments to defend and recapture share, but that those actions combined with inflation and tariff-related costs weighed on profitability. Building Climate Solutions revenue grew 24%, including organic growth of 15%, with segment profit reaching $167 million and margin of 26.2%, despite a 110 basis point decline from what the filing described as "record margins in the prior-year period."

For the full year 2026, according to the filing, Lennox revised its revenue growth guidance to approximately 6%, including a 5% benefit from completed acquisitions. Adjusted EPS guidance was reduced to $21.00 to $21.50 from the prior range of $23.00 to $24.00. Free cash flow guidance was updated to $700 million to $750 million. Chief Executive Officer Alok Maskara stated in the filing that the company is "retooling our processes to more effectively pass through cost increases while accelerating productivity," and expressed confidence in the company's "long-term resilience" despite what he characterized as "near-term challenges."

What Was Disclosed

Lennox filed its third-quarter 2026 earnings disclosure on October 28, 2026, covering revenue, segment performance, earnings per share, cash flow, and revised full-year guidance for revenue growth, adjusted EPS, and free cash flow.