Lennox International (LII) Q2 2026 earnings summary

Executive summary

• Revenue grew 3% year-over-year to $1.5 billion, driven by acquisitions and strong performance in Building Climate Solutions, while Home Comfort Solutions saw a 7% decline.

• Operating income increased 2% to $355 million; adjusted/diluted EPS was flat at $7.72.

• Building Climate Solutions delivered robust growth and margin expansion, offsetting residential softness.

• Portfolio expanded with acquisitions of Comfort-Aire, Century, Coast Air, and Heat Controller brands, expected to be EPS accretive in 2027.

• Share repurchases totaled $132 million in the quarter, with $91 million returned via dividends in the first half.

Financial highlights

• Revenue up 3% year-over-year to $1.5 billion; segment profit up 2% to $355 million.

• Operating profit margin was 23.0%, down 30 basis points year-over-year.

• Net income was $269 million, or $7.72 per share; operating cash flow rose to $172 million.

• Free cash flow for the quarter was $137 million, up from $59 million a year ago; free cash flow conversion reached 92%.

• Gross profit for the quarter was $539.5 million, up from $517.5 million a year ago.

Outlook and guidance

• Full-year adjusted EPS guidance updated to $23.00–$24.00, down from $23.50–$25.00 previously.

• Full-year 2026 revenue growth guidance reaffirmed at approximately 8%, with a 5% benefit from acquisitions.

• Free cash flow for the year expected between $750 million and $850 million.

• Most meaningful residential recovery now expected in 2027.

• Management is evaluating the impact of evolving U.S. tariffs and trade measures on future material costs.