Lennox International (LII) shares plunged 14.41% during intraday trading on Wednesday, as investors reacted sharply to the company's lowered full-year profit outlook and persistent softness in its residential business. The stock tumbled after the HVAC and refrigeration solutions provider reported its second-quarter results and slashed its earnings per share guidance for the year.
The sell-off was triggered by Lennox cutting its 2026 EPS guidance to a range of $23.00 to $24.00, down from the prior outlook of $23.50 to $25.00 and well below the FactSet consensus estimate of $24.47. The company attributed the downward revision to ongoing challenges in the residential housing market, which weighed heavily on its Home Comfort Solutions segment. Revenue in that unit fell 7.3% to $935.6 million, reflecting lower sales volumes and continued softness in new home construction. High building costs and stagnant housing demand have emerged as persistent headwinds for the segment.
While the residential business struggled, Lennox's commercial-focused Building Climate Solutions segment posted a 24% revenue jump, supported by broad-based strength and improved market conditions. Overall second-quarter revenue rose 3% to $1.55 billion, slightly missing analyst estimates of $1.56 billion. Adjusted earnings per share came in at $7.72, beating the consensus forecast of $7.68, but the guidance cut overshadowed the bottom-line beat and reaffirmed full-year revenue growth guidance of approximately 8%.
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