Lennox International Reports 2% Sales Increase to $1.07 Billion in Q1 2025

Lennox International Inc. reported its financial results for the first quarter of 2025, revealing a consolidated net sales increase of 2% to $1,072.6 million, compared to $1,047.1 million in the same period of 2024. The Home Comfort Solutions segment saw a 7% rise in net sales to $721.4 million, while the Building Climate Solutions segment experienced a 6% decline, with net sales falling to $351.2 million. Despite the overall increase in sales, operating income decreased by $11 million to $155.6 million, attributed to higher material costs and lower sales volumes, which were partially offset by favorable pricing and product mix.

The company's net income for the quarter was $120.3 million, resulting in diluted earnings per share of $3.37, down from $3.47 in the prior year. The decrease in earnings per share reflects the impact of increased costs, particularly related to tariffs and factory inefficiencies. Selling, general, and administrative expenses remained stable at $171.3 million, while interest expense decreased significantly to $6.2 million from $11.8 million, primarily due to lower borrowings.

In terms of operational developments, Lennox International's Home Comfort Solutions segment reported a segment profit of $116.8 million, up from $112.1 million in the previous year, driven by favorable pricing. Conversely, the Building Climate Solutions segment's profit fell to $53.5 million from $78.2 million, largely due to lower sales volumes and increased costs associated with new factory ramp-up and manufacturing inefficiencies. The Corporate and Other segment also improved, with losses decreasing to $14.7 million from $23.5 million.

The company continues to focus on strategic initiatives, including a share repurchase program with $406.1 million remaining under its $4 billion authorization. In the first quarter, Lennox repurchased 144,532 shares at a total cost of $85.8 million. Looking ahead, the company anticipates that pricing gains will help mitigate the impact of tariffs and support profit margins, despite potential declines in sales volumes. The effective tax rate for the quarter was 18.9%, a slight decrease from 19.4% in the previous year, attributed to income in lower tax jurisdictions.