Snapshot
Lennox International Inc reported $1.50B of revenue in Q2 2025, up 3.4% year over year, with diluted EPS of $7.82 and an operating margin of 23.6%.
- Revenue
- $1.50B
- YoY growth
- +3.4%
- Diluted EPS
- $7.82
- Operating margin
- 23.6%
$1.50B
Revenue
+3.4%
YoY growth
$7.82
Diluted EPS
23.6%
Operating margin
01 Key takeaways
What management said
- •The earnings release, today's presentation, and the webcast archive link for today's call are available on our Investor Relations website at investor.lennox.com.
- •In the face of a challenging external environment, both segments delivered revenue growth and margin expansion.
- •Our segment margin was a record 23.6%, an increase of 170 basis points.
- •Our team is performing well despite ongoing challenges, including softness in new construction demand, industry refrigerant canister shortages, customer uncertainty, and inflationary pressures.
- •While residential new construction remains subdued, the HCS segment continues to perform well given the broader market conditions.
- •In addition, growth from our full life cycle strategy has delivered year-over-year revenue growth and margin expansion.
- •We are raising our full-year outlook to reflect our consistent execution in a challenging environment and continued progress on our growth initiatives.
- •We now expect adjusted earnings per share in the range of $23.25-$24.25 and revenue growth of approximately 3%.
- •These partnerships align with the growth acceleration phase of our transformation strategy and establish the foundation for the expansion phase.
- •We expect Samsung to begin contributing meaningfully to growth in 2026, followed by Ariston in 2027.
- •Despite these dynamics, our team delivered record results with a 3% increase in revenue and 11% growth in segment profit.
- •During the quarter, approximately 90% of our refrigerant-based product sales contained the new R454B refrigerant, driving favorable product mix and contributing meaningfully to both top line and profit growth.
What went well
- •Both segments delivered revenue growth and margin expansion, with a record second quarter segment margin of 23.6%, up 170 basis points
- •Adjusted EPS of $7.82 and 11% growth in segment profit on a 3% revenue increase
- •HCS revenue increased 3% with favorable product mix and pricing up 12%; HCS segment margin of 25.3%
- •BCS rebounded with 5% revenue growth (8% benefit from mix and pricing) and delivered year-over-year factory productivity gains for the first time in several quarters as the new facility neared completion
- •Approximately 90% of refrigerant-based product sales contained the new R-454B refrigerant, driving favorable mix; smooth transition maintained customer trust
- •Raised full-year revenue and EPS guidance; increased the quarterly dividend by approximately 15% in May and received authorization for an additional $1 billion in share repurchases
What went wrong
- •HCS sales volumes declined (resi volume down 9% in the quarter) due to contractors and distributors selling through R-410A inventory, soft residential new construction, and R-454B canister shortages
- •Industry-wide R-454B canister shortages impacted dealer confidence and may have led to increased system repairs instead of replacements
- •Light commercial HVAC industry shipment volumes down double digits, with BCS segment sales volumes down 3%
- •Early signs of consumers choosing repair versus replace and trading down amid inflation and government incentive influences
- •Expectation of partial reversal of last year's temporary residential share gains due to canister shortages
Guidance changes
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Performance breakdown
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Earnings call themes & trends
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