Abstract
Lennox will report its quarterly results on October 28, 2025 Pre-MKt; this preview compiles last quarter’s results, this quarter’s forecasts for revenue, margins, net income and adjusted EPS, and a synthesis of recent institutional views within the period ending October 21, 2025.
Market Forecast
Consensus points to revenue of 1.57 billion US dollars for the current quarter, with forecast year-over-year growth of 5.68%, an estimated adjusted EPS of 7.35, and EBIT of 340.56 million US dollars; the implied outlook references a continued gross margin profile consistent with recent levels and a stable to slightly improving net margin year over year. Lennox’s prior disclosures and operating cadence suggest a focus on sustaining mid-30s gross margin and a mid‑teens net margin, while adjusted EPS growth is projected at 7.88% year over year.
The company’s core operations emphasize residential and commercial HVAC demand resilience, with outlook highlights centered on pricing discipline, mix improvements, and operational efficiencies that support margins. The most promising segment is Residential (家庭舒适解决方案), with last-quarter revenue of 935.60 million US dollars and a stable demand pattern led by replacement cycles and seasonal service, implying a favorable year-over-year trajectory.
Last Quarter Review
Lennox reported last-quarter revenue of 1.55 billion US dollars, a gross profit margin of 34.91%, GAAP net profit attributable to the parent company of 269.00 million US dollars, a net profit margin of 17.41%, and adjusted EPS of 7.72, with year-over-year adjusted EPS down 1.28% and revenue up 2.96%.
A notable highlight was a strong sequential rebound in profitability, with quarter-on-quarter net profit growth at 129.52%, reflecting operating leverage and seasonal strength. By business line, Residential (家庭舒适解决方案) delivered 935.60 million US dollars and Commercial (商业气候解决方案) delivered 609.70 million US dollars, underscoring a balanced mix and solid contributions from both segments; the revenue split stood near 60/40 between Residential and Commercial.
Current Quarter Outlook
Main Business: Core HVAC Demand and Margin Resiliency
Lennox’s core HVAC operations are expected to post mid‑single‑digit revenue growth this quarter, anchored by stable replacement demand and disciplined pricing. The forecast revenue of 1.57 billion US dollars implies continuation of a seasonal moderation from peak summer strength yet maintains positive year-over-year growth. Management’s consistent emphasis on pricing, cost control, and supply-chain normalization supports an outlook for mid‑30s gross margin akin to last quarter’s 34.91%. With the net margin last quarter at 17.41%, the setup suggests a margin framework that remains healthy even if mix shifts slightly toward residential replacements versus new construction. The EBIT forecast of 340.56 million US dollars and adjusted EPS estimate of 7.35 imply that operating leverage remains intact despite typical seasonal demand normalization.
Most Promising Business: Residential (家庭舒适解决方案)
Residential led last quarter with 935.60 million US dollars, approximately 61% of corporate revenue, and remains the largest earnings engine this quarter. The segment’s demand is characterized by a significant installed base and recurring replacement cycles, which tend to be less volatile than new construction and provide a steady volume backdrop. Seasonal weather variability can influence quarterly timing, but the broader pattern of replacement demand, coupled with product mix upgrades and service attachment, supports ongoing pricing and margin discipline. Given the forecast for company-level mid‑single‑digit revenue growth and stable gross margin, Residential’s scale and mix are poised to anchor consolidated profitability, especially as channel inventories remain balanced and lead times are normalized.
Key Stock Price Drivers This Quarter
Investors are attuned to the trajectory of margins relative to volume trends, as the last quarter’s mid‑30s gross margin and mid‑teens net margin set a high-quality baseline. A critical driver will be the extent to which pricing and cost tailwinds offset seasonal volume normalization, informing whether adjusted EPS lands in line with the 7.35 estimate. Another focal point is segment mix, particularly the balance between Residential and Commercial shipments, since incremental units in higher-margin categories can disproportionately affect consolidated profitability. Finally, order momentum and backlog signals into early winter will shape expectations for the next seasonal up-cycle; evidence of resilient replacement demand and stable channel inventories would support the case for sustained mid‑30s gross margin and a net margin profile similar to last quarter.
Analyst Opinions
The balance of recent commentary tilts bullish, with the majority of institutions expecting Lennox to deliver in-line to modestly better results on revenue and margins while maintaining a disciplined capital and pricing posture. Several well-known sell-side teams cite supportive replacement demand, constructive mix, and improved supply-chain dynamics as positive underpinnings for sustaining mid‑30s gross margin and achieving the forecast adjusted EPS of about 7.35. The prevailing view argues that potential downside from seasonal normalization is mitigated by pricing power and operational efficiency, leaving bias for slight upside if weather and order timing prove favorable.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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