Highlights

  • Third quarter 2026 net sales were $1,572.5 million, compared with $1,426.8 million, and diluted earnings were $6.41 per share.
  • Third quarter 2026 operating income was $312.1 million, compared with $328.8 million, and included restructuring charges of $8.2 million.
  • Full-year 2026 adjusted earnings per share guidance was updated to $21.00 to $21.50, compared with the prior $23.00 to $24.00.
  • Share repurchases totaled $151 million in the quarter, and operating cash flow was $395 million, compared with $301 million.

Lennox International Inc. (NYSE:LII) shares were trading at USD 333.56 on October 28, 2026, down 10.35%, with a relative volume at time of 5.33. The heating and cooling company completed the acquisition of the Comfort-Aire and Century brands in the third quarter and reported third quarter 2026 results with updated full-year guidance on October 28.

Lennox International is incorporated in Delaware and lists its principal executive offices in Richardson, Texas. The company delivers heating, cooling, indoor air quality, refrigeration and water heating systems to residential and commercial customers, along with parts, services and connected technology. It reports two segments, Home Comfort Solutions and Building Climate Solutions. Its fiscal year ends December 31.

Third Quarter 2026 Results

Net sales for the three months ended September 30, 2026 were $1,572.5 million, compared with $1,426.8 million in the prior-year quarter. Operating income was $312.1 million, compared with $328.8 million, with an operating margin of 19.8%. Net income was $221.2 million, compared with $259.9 million, and diluted earnings per share were $6.41, compared with $7.38.

On a non-GAAP basis, adjusted net income was $236 million, or $6.84 per diluted share, compared with $7.38 a year earlier. Total segment profit, including unallocated corporate expenses, was $323.3 million, with a margin of 20.6%. The company said product cost inflation, including tariffs, and lower factory absorption created a $45 million headwind, and that higher fuel costs added $15 million of pressure.

Home Comfort Solutions net sales were $937.2 million, compared with $912.9 million, and segment profit was $175.7 million, compared with $215.3 million. Segment margin was 18.7%.

Building Climate Solutions net sales were $635.3 million, compared with $513.9 million, and segment profit was $166.5 million, compared with $140.3 million. Segment margin was 26.2%, down 110 basis points.

Balance Sheet, Cash Flow and Capital

At September 30, 2026, cash and cash equivalents were $43.3 million. Commercial paper was $455.1 million, current maturities of long-term debt were $319.2 million, and long-term debt was $847.1 million. Total stockholders' equity was $1,316.9 million.

Operating cash flow in the third quarter was $395 million, compared with $301 million a year earlier. Interest expense, net was $17.5 million, compared with $10.5 million.

On the call, management said net debt to adjusted EBITDA was approximately 1.4x, reflecting in part the $200 million acquisition of the Comfort-Aire and Century brands. Management also said capital deployment will place greater emphasis on opportunistic share repurchases and that it continues to expect approximately $225 million of capital expenditures this year.

Full-Year 2026 Guidance and Management Commentary

Lennox said it is revising its full-year 2026 revenue growth guidance to approximately 6% growth, including a 5% benefit from completed acquisitions. Adjusted earnings per share guidance was updated to $21.00 to $21.50, compared with the prior $23.00 to $24.00. Free cash flow guidance was updated to $700 million to $750 million. Adjusted measures are non-GAAP.

On the call, management said it expects a tax rate of 21%, compared with 20% in prior guidance, and that it expects revenue growth of approximately 23% for Building Climate Solutions and a decline of approximately 4% for Home Comfort Solutions. Management said the updated outlook assumes current pricing and inflation pressures continue through the remainder of the year.

Management said it is not providing 2027 guidance and will provide detailed 2027 guidance with fourth quarter results. It said it expects inflationary pressures to continue into 2027, particularly from tariff components and commodities, and that the first half of 2027 will be more challenging.