Lennox International Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 29 July 2026: press release. Guidance figures: 1 raised, 1 lowered, 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Revenue up 3%, operating income up 2%: Revenue was $1,545.3 million, up from $1,500.9 million, and operating income was $355.0 million, up from $349.0 million. Acquisitions drove the revenue increase. Source
• Diluted EPS flat at $7.72: Diluted EPS was $7.72 against $7.71 a year earlier. Net income was $269.0 million, against $273.9 million, on 34.8 million diluted weighted shares versus 35.5 million. Source
• Building Climate Solutions revenue up 24%: Building Climate Solutions revenue was $609.7 million, up 24%. Organic growth was 15% and acquisitions added 9%. Segment profit was $155.3 million, up 29%, with margin at 25.5%, up 100 basis points. Source
• Home Comfort Solutions revenue down 7%: Home Comfort Solutions revenue was $935.6 million, down 7%, mainly on lower sales volumes and partly offset by mix-price and acquisitions. Segment profit was $221.8 million, down 12%, and margin was 23.7%, down 130 basis points. Source
• Total segment margin down 30 basis points: Total segment margin was 23.0%, down 30 basis points. Mix and price added $39 million and acquisitions $17 million, offset by $25 million from lower sales volumes and $14 million of SG&A and distribution inflation and investments. Source
• Residential demand improved sequentially: Demand improved across both residential distribution channels, though residential new construction remained a meaningful headwind. Lower volumes reduced Home Comfort Solutions profit by $49 million. Source
• Operating cash flow rose to $172 million: Operating cash flow was $172.0 million against $86.8 million, which the company attributed to reduced inventory levels. Free cash flow was $137.0 million against $58.7 million. Source

“Our results this quarter reflect the strength of our portfolio and team,”

Alok Maskara, Chief Executive Officer

Guidance

What changed from last quarter

• Guidance lowered: Full-year earnings per share range lowered to $23.00 to $24.00 from $23.50 to $25.00. Source
• Guidance raised: Acquisition contribution to full-year revenue growth raised to 5% from 4%. Source
• Guidance kept: Full-year revenue growth of about 8% and the free cash flow range of $750 million to $850 million were not changed. Source
• New: Company expanded its portfolio through the acquisition of the Comfort-Aire and Century brands. Source

Results and growth drivers

• Revenue up 3%, operating income up 2%: Revenue was $1,545.3 million, up from $1,500.9 million, and operating income was $355.0 million, up from $349.0 million. Acquisitions drove the revenue increase. Source
• Diluted EPS flat at $7.72: Diluted EPS was $7.72 against $7.71 a year earlier. Net income was $269.0 million, against $273.9 million, on 34.8 million diluted weighted shares versus 35.5 million. Source
• Six-month revenue up, EPS down: For the six months, net sales were $2,680.4 million against $2,573.5 million, and operating income was $518.5 million against $517.0 million. Diluted EPS was $11.06 against $11.34. Source

Segment performance

• Building Climate Solutions revenue up 24%: Building Climate Solutions revenue was $609.7 million, up 24%. Organic growth was 15% and acquisitions added 9%. Segment profit was $155.3 million, up 29%, with margin at 25.5%, up 100 basis points. Source
• Home Comfort Solutions revenue down 7%: Home Comfort Solutions revenue was $935.6 million, down 7%, mainly on lower sales volumes and partly offset by mix-price and acquisitions. Segment profit was $221.8 million, down 12%, and margin was 23.7%, down 130 basis points. Source
• Corporate expenses slightly lower: Corporate and other expenses were $22.1 million, against $23.6 million a year earlier. These cover tax, treasury, accounting, internal audit, legal and human resources. Source

“residential market conditions remained challenging during the second quarter, although demand improved sequentially from the first quarter.”

Lennox International Inc., press release

Costs, margins and pricing

• Total segment margin down 30 basis points: Total segment margin was 23.0%, down 30 basis points. Mix and price added $39 million and acquisitions $17 million, offset by $25 million from lower sales volumes and $14 million of SG&A and distribution inflation and investments. Source
• Product cost cut profit, net of refunds: Product cost reduced profit by $11 million, reflecting inflation and factory under-absorption. That figure is net of $30 million of tariff refunds. Source
• Distribution and freight costs cut profit: Distribution, freight and other costs reduced Home Comfort Solutions profit by a further $11 million. Lower volumes were the largest single factor in that segment's $30 million profit decline. Source
• Pricing offset inflation and tariff pressures: Pricing actions taken against inflationary and tariff pressures largely offset the volume and absorption impacts in Home Comfort Solutions, according to the company. Source

Demand and customer channels

• Residential demand improved sequentially: Demand improved across both residential distribution channels, though residential new construction remained a meaningful headwind. Lower volumes reduced Home Comfort Solutions profit by $49 million. Source
• National accounts drove commercial growth: Building Climate Solutions growth reflected national account customers, healthy emergency replacement activity, and growth in service offerings. Higher volumes added $23 million to that segment's profit. Source
• Residential decline narrowed from first quarter: Home Comfort Solutions revenue fell 10% in the first quarter and 7% in the second. The first-quarter report described continued softness across both one-step and two-step channels.

“remain focused on executing our growth strategy through innovation, operational excellence, and disciplined capital allocation.”

Alok Maskara, Chief Executive Officer

Capital, cash and returns

• Operating cash flow rose to $172 million: Operating cash flow was $172.0 million against $86.8 million, which the company attributed to reduced inventory levels. Free cash flow was $137.0 million against $58.7 million. Source
• Capital spending and buybacks: Net capital expenditure was $35 million against $28 million a year earlier. Share repurchases totaled $132 million in the quarter. Source
• Six-month dividends and repurchases: For the six months, cash dividends paid were $90.5 million, up from $81.7 million. Repurchases of common stock were $151.3 million, down from $294.8 million. Source
• Commercial paper and receivables higher: Commercial paper was $412.0 million at June 30, 2026, up from $226.0 million at December 31, 2025. Accounts and notes receivable rose to $918.1 million from $578.8 million. Source
• Interest expense more than doubled: Interest expense, net was $14.7 million in the quarter, against $8.3 million a year earlier. For the six months it was $29.9 million, against $14.5 million. Source

Strategy and acquisitions

• Comfort-Aire and Century brands acquired: The company said it expanded its portfolio through the acquisition of the Comfort-Aire and Century brands. Source
• Duro Dyne and Supco offset softness: Contributions from the Duro Dyne and Supco acquisitions offset residential softness in the quarter, according to management. Source
• Growth strategy priorities restated: Management said it remains focused on growing through innovation, operational excellence and disciplined capital allocation. Source

Risks management discussed

• Demand: Residential new construction activity remained a meaningful headwind for the residential business. Source
• Demand: Continued softness in the residential end market was described as ongoing during the quarter. Source
• Operational: Segment margin declined on lower volumes and related absorption pressures. Source
• External: Inflationary and tariff pressures required pricing actions to offset cost increases. Source

Earlier plans management reported on

• Ahead: Tariff refunds arrived earlier than management had expected and provided a benefit during the quarter. Source
• Not stated: Management reaffirmed full-year revenue growth guidance of approximately 8%. Source

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.