Lennox Q1 Revenue Climbs 6% to $1.1B, EPS Falls 8% to $3.35
Revenue rose 6% year-over-year to $1.1 billion in the first quarter, driven by completed acquisitions, while GAAP operating income fell 3% to $164 million and EPS declined 8% to $3.35. Home Comfort Solutions revenue dropped 10% with segment margin down 390 bps, whereas Building Climate Solutions saw 38% sales growth and a 300 bps margin improvement.
1. First Quarter Financial Results
First quarter revenue reached $1.1 billion, up 6% year-over-year, with GAAP operating income of $164 million, a 3% decline, and GAAP diluted EPS of $3.35, down 8%. Operating cash flow was $16 million, driven by lower inventory growth, while net capital expenditures rose to $55 million and share repurchases totaled $20 million.
2. Home Comfort Solutions Performance
Home Comfort Solutions segment revenue was $650 million, a 10% decrease, with segment profit falling 30% to $87 million and margin contracting 390 bps to 13.3%. The decline was driven by weak sales volumes and inflationary costs, partially offset by $41 million in mix and price benefits and contributions from recent acquisitions.
3. Building Climate Solutions Growth
Building Climate Solutions segment revenue increased 38% to $485 million, combining 26% organic growth and 12% from acquisitions, with segment profit up 63% to $96 million and margin improving 300 bps to 19.7%. Growth was supported by strong national account wins, emergency replacement activity, and manufacturing efficiency improvements.
4. Full Year Guidance Maintained
Management maintained full year revenue growth guidance at approximately 8%, including a 4% acquisition benefit, and kept EPS guidance between $23.50 and $25.00. Free cash flow is forecasted at $750 million to $850 million, reflecting ongoing productivity and acquisition integration strategies.