Abstract

Lennox International will release its quarterly results on January 28, 2026 Pre-Market, with investors watching revenue, margins, and EPS dynamics to gauge momentum into the new fiscal period.

Market Forecast

Consensus and company guidance point to current-quarter revenue of $1.27 billion, gross profit margin near 32.84%, net profit margin around 17.23%, and adjusted EPS of $4.76, implying year-over-year growth of 2.84% for revenue and 12.56% for EPS. The main business highlights center on solid demand in Residential HVAC and steady institutional activity in Commercial HVAC, with expectations for continued mix benefits and operating leverage. The most promising segment appears to be Residential HVAC (“Home Comfort Solutions”), forecast to deliver $0.91 billion with supportive year-over-year expansion tied to replacement cycles and premium product uptake.

Last Quarter Review

In the previous quarter, Lennox International reported revenue of $1.43 billion, a gross profit margin of 32.84%, GAAP net profit attributable to the parent company of $246.00 million, a net profit margin of 17.23%, and adjusted EPS of $6.98, with revenue declining 4.76% year over year and adjusted EPS increasing 4.49% year over year. A notable highlight was disciplined cost control and price/mix resilience that preserved profitability despite modest top-line pressure. Main business highlights included Home Comfort Solutions revenue of $0.91 billion and Commercial Climate Solutions revenue of $0.51 billion, with a revenue mix supported by residential replacement demand and stable commercial project pipelines.

Current Quarter Outlook

Residential HVAC (“Home Comfort Solutions”)

Residential HVAC constitutes Lennox International’s largest revenue contributor, and the setup this quarter is characterized by balanced demand from replacement cycles and ongoing premiumization. Price/mix tailwinds are expected to remain intact, anchored by higher-efficiency systems and connected thermostats that lift average selling prices. Supply chain normalization continues to reduce logistics and component cost friction, which supports margin stability. Management’s operational execution through targeted channel incentives and disciplined inventory planning should help align shipments with retail sell-through, reducing the risk of markdowns and keeping gross margin near last quarter’s level. Seasonal factors are modest in the winter period, yet service activity and deferred maintenance work often underpin steady replacement volumes. Given the forecast for adjusted EPS growth and EBIT expansion, Residential HVAC is positioned to be the principal driver of earnings quality this quarter.

Commercial HVAC (“Commercial Climate Solutions”)

Commercial demand remains tied to construction and retrofit activity, and industry trackers suggest institutional and light-commercial markets are steady to slightly improving. Lennox International’s focus on rooftop units and packaged systems creates exposure to replacement cycles where reliability and total cost of ownership drive purchasing decisions. Backlog execution and bid conversion rates are crucial, and the company’s pricing discipline aims to offset input cost variability, including compressors and steel. Margins in Commercial HVAC tend to be more sensitive to project timing; however, consistent service revenues and aftermarket parts can soften volatility. The quarter’s EBIT guidance indicates operating leverage from a stable project cadence, suggesting Commercial HVAC may contribute to margin cohesion even if revenue growth trails Residential HVAC.

Stock Price Drivers This Quarter

Stock performance this quarter is likely to hinge on the balance between top-line recovery and margin preservation. Investors will parse the gross profit margin against last quarter’s 32.84% to confirm whether price/mix and cost controls are holding as expected. Adjusted EPS of $4.76 is a key focal point; any variance relative to consensus may be attributed to shifts in channel inventory or promotional intensity in Residential HVAC. On the revenue side, the $1.27 billion projection will be measured against order trends and distributor feedback, particularly within high-SEER product lines. The net profit margin guide near 17.23% will be scrutinized for potential dilution from product mix or higher operating expenses tied to growth investments. Clear commentary on end-market demand, rebate programs, and backlog conversion could sway sentiment materially.

Analyst Opinions

Recent analyst commentary skews constructive on Lennox International’s near-term setup, with the majority of preview notes aligning to a cautious-bullish stance emphasizing stable demand and resilient margins. Several well-followed institutions highlight the combination of disciplined pricing and cost management as supportive of mid-teens net profit margins, with expectations that adjusted EPS will track above the revenue growth rate due to operating leverage. Analysts point to Residential HVAC as the anchor for outperformance, citing replacement-led demand for higher-efficiency units and smart-home integrations that nudge average selling prices higher. On Commercial HVAC, the view is that backlog health and retrofit activity should maintain serviceable growth conditions even if new construction is mixed.

Consensus previews emphasize that potential upside rests on demand consistency across channels and limited promotional pressure, while risks center on weather variability and the timing of distributor inventory normalization. Institutions anticipate that Lennox International will demonstrate continued progress in EBIT, with a forecast of $232.13 million implying year-over-year growth of 14.31%, which serves as a key validation point for earnings quality. The general tone across sell-side checks is that revenue of $1.27 billion, gross margin around 32.84%, and adjusted EPS of $4.76 are attainable benchmarks, with Residential HVAC most likely to deliver the incremental momentum.