DALLAS — Lennox International reported third-quarter 2026 revenue of $1.6 billion, up 10% year-over-year. However, inflation, tariffs, and competitive pressure reduced profitability and led the company to lower its full-year earnings guidance.

The Dallas-based HVAC manufacturer reported operating income of $312 million, down 5%. Adjusted diluted earnings per share fell 7% to $6.84. Total segment profit, including unallocated corporate expenses, declined 2% to $323 million.

Lennox revised its 2026 adjusted earnings-per-share outlook to $21.00–$21.50, down from its previous forecast of $23.00–$24.00. The company expects approximately 6% full-year revenue growth, including a 5% contribution from completed acquisitions.

The company's residential and commercial businesses reported different growth patterns during the quarter.

Home Comfort Solutions revenue increased 3% to $937 million. However, segment profit fell 18% to $176 million, and its segment margin declined 490 basis points to 18.7%.

Lennox attributed the residential segment's lower profitability to reduced sales volumes, product cost inflation, tariffs, and lower factory absorption. Higher fuel costs, selling and administrative expenses, and distribution costs also weighed on results.

The company said it implemented targeted price adjustments in select market segments to defend and recapture market share. Its priorities include improving productivity, mitigating tariff costs, and introducing new products in its entry-tier portfolio.

Building Climate Solutions revenue rose 24% to $635 million, including 15% organic growth. The segment reported continued strength in commercial heating, ventilation and air conditioning (HVAC), refrigeration and services.

Segment profit increased 19% to $167 million. Its margin declined 110 basis points to 26.2%, reflecting product cost inflation, tariffs, lower factory absorption and higher operating expenses.

Lennox said it expects full-year margins to expand in Building Climate Solutions despite inflation and tariff pressures.

Across the company, product cost inflation, including tariffs, and lower factory absorption created a $45 million headwind to third-quarter segment profit. Higher fuel costs added another $15 million in pressure. These impacts were partially offset by higher sales volumes, favorable product mix and pricing, and contributions from completed acquisitions.

Lennox also reported third-quarter operating cash flow of $395 million, compared with $301 million in the prior-year quarter. The increase was driven by lower inventory levels.

The results highlight continued growth in Lennox's commercial HVAC and refrigeration business alongside cost and margin pressures across its operations. For full-year 2026, the company expects adjusted earnings per share of $21.00–$21.50 and free cash flow of $700 million to $750 million.