Revenue Growth Driven by Top-Line Expansion
LII grew Q1 FY2026 revenue by 5.8% year-over-year to $1.135B from $1.073B, indicating continued demand for its HVAC products despite a challenging macro environment.
Source: 10-Q Income Statement
Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
LII posted Q1 FY2026 revenue growth of 5.8% to $1.14B, but rising costs and higher SG&A compressed margins, driving net income down 9.6% to $117.2M and diluted EPS down 7.7% to $3.35.
Revenue
$1.14B
+5.83% YoY
EPS (Diluted)
$3.35
-7.71% YoY
Gross Margin
30.9%
-0.8 pts YoY
Operating Income
$163.5M
-2.68% YoY
Source: SEC XBRL
Lennox International (LII) reported Q1 FY2026 revenue of $1.14B, up 5.8% year over year. Operating margin was 14.4%, down 1.3 points from 15.7% a year earlier. Operating cash flow was $16.1M. LII's fiscal Q1 FY2026 corresponds to calendar Q1 2026.
Last 4 quarters: 2 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 7.72 | 7.76 | Miss -0.5% |
| Mar 2026This filing | 3.35 | 3.20 | Beat +4.8% |
| Dec 2025 | 4.45 | 4.80 | Miss -7.2% |
| Sep 2025 | 6.98 | 6.88 | Beat +1.5% |
Reported EPS of $3.35 versus the $3.20 analyst consensus — a +4.8% beat for Mar 2026.
Compiled by AI from this SEC filing
LII grew Q1 FY2026 revenue by 5.8% year-over-year to $1.135B from $1.073B, indicating continued demand for its HVAC products despite a challenging macro environment.
Source: 10-Q Income Statement
Cost of revenue rose 7.1% YoY to $783.8M, outpacing revenue growth of 5.8%, which compressed gross margin by approximately 83 basis points to 30.9% from 31.8%.
Source: 10-Q Income Statement
SG&A expenses increased 8.1% YoY to $185.2M from $171.3M, contributing to a 2.7% decline in operating income to $163.5M and a contraction in operating margin to 14.4% from 15.7%.
Source: 10-Q Income Statement
Total assets grew 24.2% YoY to $4.29B, while cash and equivalents fell sharply by 77.8% to $48.2M from $217.2M, suggesting capital was deployed into investments or acquisitions.
Source: 10-Q Balance Sheet
Operating cash flow improved significantly to $16.1M in Q1 FY2026 from negative $35.8M in Q1 FY2025, a positive swing of $51.9M, though investing cash outflows increased to $56.6M reflecting higher capital expenditures or acquisitions.
Source: 10-Q Cash Flow Statement
Compiled by AI from this SEC filing · 2 high, 3 medium, 0 low
Cost of revenue grew faster than revenue (7.1% vs. 5.8%), squeezing gross margin to 30.9%. If raw material or component costs continue to escalate, LII's profitability could face further pressure.
Source: 10-Q Income Statement
SG&A rose 8.1% YoY to $185.2M, growing faster than revenue. Sustained increases in selling and administrative costs without corresponding revenue acceleration could structurally impair operating margins.
Source: 10-Q Income Statement
Cash and equivalents dropped 77.8% YoY to just $48.2M, a significant reduction in liquidity. This limits the company's financial flexibility for opportunistic investments or to weather unexpected downturns.
Source: 10-Q Balance Sheet
LII's debt-to-equity ratio stands at 2.54, indicating substantial financial leverage. Rising interest rates or deteriorating operating performance could make debt servicing more burdensome and constrain future capital allocation.
Source: 10-Q Balance Sheet
Net income fell 9.6% to $117.2M and diluted EPS declined 7.7% to $3.35 even as revenue grew, highlighting a disconnect between top-line and bottom-line performance. This trend, if sustained, could disappoint shareholders expecting earnings leverage.
Source: 10-Q Income Statement
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 1.14 $B | 1.07 $B | +5.83% |
Cost of Revenue $M | 783.80 $M | 731.70 $M | +7.12% |
Gross Profit $M | 351.30 $M | 340.90 $M | +3.05% |
Operating Income $M | 163.50 $M | 168.00 $M | -2.68% |
Net Income $M | 117.20 $M | 129.60 $M | -9.57% |
EPS (Basic) $ | 3.37 $ | 3.65 $ | -7.67% |
EPS (Diluted) $ | 3.35 $ | 3.63 $ | -7.71% |
SG&A Expense $M | 185.20 $M | 171.30 $M | +8.11% |
Answers draw on this SEC filing and the data on this page
In 2026-Q2, Lennox International Inc. (LII) achieved 3% net sales growth to $1.55B and a 1.7% increase in operating income to $355M, as strong momentum in Building Climate Solutions offset market softness in Home Comfort Solutions.
Lennox International (LII) delivered resilient FY2025 results with flat operating income of $1.04B despite a 2.7% revenue decline to $5.20B, while significantly expanding its balance sheet through a major acquisition and aggressive share buybacks.
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