Lennox International Inc. (LII): 2Q26 First Take: Resi HVAC drives 2Q miss, FY26 guide lowered

First-page research excerpt

Equity Research

29 July 2026 | 8:08AM EDT

Lennox International Inc. (LII): 2Q26 First Take: Resi HVAC drives 2Q

miss, FY26 guide lowered

Bottom line. Resi HVAC drives 2Q miss, FY26 guide lowered. LII reported 2Q26

segment EBIT that was a -1% miss vs. Visible Alpha Consensus Data driven by worse

than expected sales in Home Comfort Solutions (HCS) partially offset by better

performance in Building Climate Solution (BCS). HCS sales were -7% (-5% vs.

consensus driven by -12%/+3%/+2% volume/price+mix/other) while EBIT margins

were 23.7% (-10bps vs consensus), driving the -5% miss at EBIT. Notably, two-step

distribution was -2% (vs. CARR: +9%). In addition, LII included $30mn in tariff

refunds in the 2Q results. Excluding these one-time refunds, 2Q segment EBIT

missed by 9% ($25mn in HCS, $5mn in BCS). Inventories were ~flat y/y (-5% q/q)

compared to historical seasonality of +LDD% y/y (-LSD% q/q), which does support

destocking being over. Lastly, LII lowered its FY26 EPS guide to $23.00-24.00 (vs.

prior $23.50-25.00 vs. GS/Visible Alpha $24.50/$24.64) despite a maintained total

sales outlook of ~+8% (vs. Prior/Visible Alpha: ~+8%/+8.4%) including a +5%

acquisition impact (vs. prior +4%). Given the miss and guide down, we expect shares

to underperform today.

Joe Ritchie

+1(212)357-8914 |

Goldman Sachs & Co. LLC

Luke McCollester, CFA

+1(617)204-2141 |

Goldman Sachs & Co. LLC

Aanvi Patodia

+1(332)245-7804 |

Goldman Sachs India SPL

Ken Chen

Goldman Sachs & Co. LLC

Jatin Khanna

+1(212)934-2034 |

Goldman Sachs India SPL

Devashish Sharma

+1(332)245-7787 |

Goldman Sachs India SPL

What happened

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LII reported 2Q26 adj. EPS of $7.72 vs. Visible Alpha consensus of $7.72.

Segment EBIT was -1% vs. Visible Alpha consensus.

n

On a segment level, Residential (Home Comfort Solutions)/Commercial (Building

Climate Solutions) sales were -5%/+6% vs. consensus. Residential volume/price +

mix was -12%/+3% while Commercial volume/price + mix was +12%/+3%.

n

LII lowered its FY26 EPS guide to $23.00-$24.00 (vs. prior $23.50-25.00 vs.

GS/Visible Alpha $24.50/$24.64) predicated on a maintained total sales outlook

of ~+8% (vs. Prior/Visible Alpha: ~+8%/+8.4%) including a +5% acquisition

…