Lennox Reports 10% Revenue Growth as Q3 Adjusted EPS Falls 7%

What happened

Lennox reported third-quarter 2026 revenue of $1.57 billion, up 10% year over year, while operating income fell 5% to $312 million and adjusted diluted EPS dropped 7% to $6.84. The company lowered its full-year adjusted EPS outlook to $21.00–$21.50.

Confirmed

Global impact / market context

Revenue growth did not carry through to profit, so rising costs and price adjustments are squeezing what Lennox keeps per sale. The lower full-year EPS outlook tells investors to expect weaker profit than previously guided, even as sales expand, which can pressure the stock.

Analyst inference

The results split the business: Building Climate Solutions grew 24%, while Home Comfort grew just 3% amid share challenges, inflation and tariff-related costs. This suggests commercial demand is offsetting softer residential conditions, and cost pass-through execution is now the key swing factor for results.

Analyst inference

What to watch

1. Watch whether Lennox improves cost pass-through, which means recovering higher input and tariff costs through prices, and whether targeted price adjustments in select markets stabilize Home Comfort share. Confirmed
2. Track gross profit and operating margin next quarter: if revenue keeps growing but profit per sale stays compressed, the lowered EPS range may face further pressure from inflation and competition. Analyst inference
3. Monitor management's stated priorities—accelerating productivity, mitigating tariffs and defending share—for concrete progress, since execution on these items determines whether commercial strength offsets residential weakness. Proposed

Evidence

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