- Lennox International (LII, Financial) reports a modest revenue increase of 2% in Q1 2025, reaching $1.1 billion.
- Despite revenue growth, segment profit fell by 7% and GAAP diluted EPS declined by 3% to $3.37.
- Maintaining 2% revenue growth guidance for 2025, with adjusted EPS expected between $22.25 and $23.50.
Lennox International Inc. (LII) reported its first quarter financial results for 2025, showing a 2% year-over-year increase in revenue, totaling $1.1 billion. However, the company's profit margins faced pressure with segment profit declining by 7% to $156 million. The GAAP diluted earnings per share (EPS) also decreased by 3%, coming in at $3.37.
The Home Comfort Solutions segment performed well, with revenue climbing 7% to $721 million, driven by favorable product and channel mix. However, the profit margin in this segment saw a minor contraction of 40 basis points, settling at 16.2% due to tariff impacts.
In contrast, the Building Climate Solutions segment experienced a 6% decline in revenue to $351 million. This segment faced significant challenges, including inefficiencies during the transition to low Global Warming Potential (GWP) products, which led to a 32% drop in segment profit.
Lennox maintained its guidance for a 2% revenue growth for the full year 2025, with adjusted EPS expected to range between $22.25 and $23.50. The company also continued its share repurchase program, buying back $85 million worth of shares during the quarter.
The operating cash flow usage was noted at $36 million, marking an increase from the previous year's $23 million. Despite current challenges, the company's management remains confident, focusing on pricing strategies to offset tariff impacts and preserve profit margins. Lennox anticipates free cash flow for 2025 to remain robust, ranging between $650 million and $800 million.
