・Revenue rose 2% to $1.1B, driven by strong pricing and mix in Home Comfort Solutions.
・Segment profit declined 7% due to tariffs, transition inefficiencies, and cost investments.
・EPS down 3% to $3.37; guidance narrowed but full-year revenue still expected to grow 2%.
・Home Comfort Solutions up 7%, offset by a 6% drop in Building Climate Solutions.
・Lennox maintains $650–$800M free cash flow guidance and continues pricing strategies to counter cost headwinds.
Tariffs and Low-GWP Transition Weigh on Margins, But Revenue Growth and Pricing Strength Show Business Resilience
Lennox Reports First Quarter 2025 Results – Revenue Grows Despite Margin Pressures from Tariffs and Transitions
DALLAS, April 23, 2025 – Lennox International Inc. (NYSE: LII), a leader in energy-efficient climate control solutions, announced its Q1 2025 results with $1.1 billion in revenue, a 2% year-over-year increase. The growth was driven by pricing and product mix in the Home Comfort Solutions segment, though overall profits were impacted by tariff costs, factory inefficiencies, and the ongoing transition to low-GWP refrigerant products.
Key Metrics:
- GAAP operating income: $156 million (down 7%)
- GAAP and adjusted EPS: $3.37 (down 3%)
- Segment margin: 14.5% (down 140 bps)
- Net income: $120 million, down from $124 million YoY
CEO Alok Maskara emphasized the company’s adaptability in the face of trade-related headwinds, stating: “Our replacement-driven model and North American strategy remain strong. We’re making targeted pricing adjustments to maintain supply chain stability and profitability.”
Segment Highlights:
- Home Comfort Solutions:
- Revenue: $721 million, up 7%
- Segment profit: $117 million, up 4%
- Margin: 16.2% (down 40 bps)
- Growth driven by pricing and mix, with stable demand despite a flat volume environment.
- Building Climate Solutions:
- Revenue: $351 million, down 6%
- Segment profit: $54 million, down 32%
- Margin: 15.2% (down 580 bps)
- Pressures included customer transition timing, tariff costs, and factory ramp-up inefficiencies.
Lennox is maintaining full-year revenue guidance at 2% growth, while narrowing adjusted EPS range to $22.25–$23.50. The company expects pricing actions to offset volume and cost pressures, especially as adoption of low-GWP refrigerants accelerates.
Cash & Capital:
- Free cash flow for the quarter: –$61 million, compared to –$52 million in Q1 2024
- $85 million in share repurchases
- Capital expenditures: $25 million, with full-year capex still forecasted at $150 million
Despite near-term profit margin pressure, strong order rates and stable replacement demand provide long-term confidence for Lennox as it continues navigating evolving regulatory and economic environments.