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Overview of Lennox's Q4 2025 Financial Performance

Lennox International Inc. has released its financial results for the fourth quarter and the entire year of 2025. The company reported revenue of $1.2 billion for Q4, indicating an 11% decrease from the previous year. Operating income stood at $196 million, and GAAP diluted earnings per share were $4.07. These figures reflect a shift in accounting methodology from LIFO (Last In, First Out) to FIFO (First In, First Out) that was implemented in the fourth quarter of 2025. Despite the decline in revenue, the company’s overall performance in 2025 has shown resilience amid challenging industry conditions.

Financial Performance Details

Lennox's full-year revenue reached $5.2 billion, which is a decrease of 3% year-over-year. The operating income for the year was steady at approximately $1 billion, while the GAAP diluted earnings per share improved slightly, totaling $22.79 compared to $22.66 the previous year. The company reported a segment profit of $1.1 billion, demonstrating a 2% increase due to favorable pricing and improved cost management strategies.

Q4 Highlights

In the last quarter of 2025, several key highlights emerged:

• - Revenue: $1.2 billion (down 11% year-over-year)
• - Operating Income: $196 million (down 22% year-over-year)
• - Net Income: $142 million, equating to $4.07 per share
• - Segment Profit: $212 million (down 16% year-over-year)

The Home Comfort Solutions segment faced a notable challenge with a revenue drop of 21%, primarily due to reduced new construction sales and channel destocking. Conversely, the Building Climate Solutions segment reported an 8% revenue increase, supported by strong demand for parts and services, positioning the company for growth despite overall market uncertainties.

Full-Year 2025 Financial Recap

Lennox's overall results for the year displayed a mix of resilience and challenges. Noteworthy highlights include:

• - Home Comfort Solutions: Revenue dropped to $3.3 billion (down 7% from the prior year), with a profit of $729 million.
• - Building Climate Solutions: Increased revenue to $1.9 billion (up 5%) with a profit growth of 8%.
• - Corporate Expenses: Decreased to $105 million, creating a slight cushion against other financial pressures.

Insights from the CEO

Alok Maskara, CEO of Lennox, expressed satisfaction with the company’s achievements in 2025 amid significant industry hurdles. He noted that Lennox managed to exceed 20% margins for the first time in its history, indicating effective cost control and strategic operational adjustments. The confidence in Lennox’s strategic initiatives is apparent as it prepares for a potentially stronger market in 2026.

Outlook for 2026

Looking forward to the upcoming fiscal year, Lennox has set ambitious targets:

• - Expected revenue growth of approximately 6% to 7%, primarily driven by the integration of recent acquisitions.
• - Projected adjusted earnings per share between $23.50 and $25.00.
• - Anticipated capital expenditures totaling around $250 million, with estimated free cash flow ranging from $750 million to $850 million.

Conclusion

Lennox International Inc. continues to navigate a challenging landscape while displaying a strong commitment to growth and sustainability. With an optimistic outlook, the company is well-prepared to meet the evolving needs of both residential and commercial customers, ensuring its position as a leader in energy-efficient climate control solutions. A conference call is scheduled to further discuss these results and strategies for the future, reflecting Lennox's dedication to transparency and proactive investor relations.

For more detailed information on Lennox’s results and future guidance, please visit their investor relations site or attend the upcoming conference call.