LENNOX INTERNATIONAL INC
For the period ended Jun 30, 2025. Filed Jul 23, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 23, 2025
LII$341.97-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-04-23.
0001069202-25-000017
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-23.
0001069202-25-000032
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 72 previous paragraphs and 102 current paragraphs.
43 unchanged; 24 reworded; 29 added; 5 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 7 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
•Operating income in the second quarter of 2025 increased $34 million to $354 million as favorable mix and price were partially offset by lower sales volumes, higher product costs, primarily related to inflationary impacts, including tariffs, and higher freight and distribution costs.
Current report
Recent Developments
Current report
On July 4, 2025, the “One Big Beautiful Bill Act” was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact the Company. We are currently evaluating the provisions of the new law and the potential effects on our financial position, results of operations, and cash flows.
Current report
(Gains) losses and Other Expenses, Net
Current report
Net sales increased 3% in the second quarter of 2025 as compared to the same period in 2024 primarily due to a 12% increase in mix and price, which was partially offset by a 9% decrease in sales volumes.
Current report
Segment profit in the second quarter of 2025 increased $27 million as compared to the same period in 2024 primarily due to $84 million from favorable mix and price, and $6 million in factory efficiencies, which were partially offset by $36 million in decreased sales volumes, $17 million from higher product costs, primarily related to inflationary impacts, including tariffs, and $10 million from higher freight and distribution costs as well as other inflationary impacts.
Current report
Net sales increased 5% in the second quarter of 2025 as compared to the same period in 2024 primarily due to a 8% increase in mix and price, which was partially offset by a 3% decrease in sales volumes.
Current report
Segment profit in the second quarter of 2025 increased $9 million as compared to the same period in 2024 primarily due to $31 million in favorable mix and price and $6 million in higher factory efficiencies, which were partially offset by $11 million in higher product costs, primarily related to inflationary impacts, including tariffs, $11 million in increases in distribution and selling as well as other inflationary impacts, and $6 million in decreased sales volumes.
Current report
Segment loss remained flat at $24 million in the second quarter of 2025 as compared to the same period in 2024.
Current report
Year-to-Date through June 30, 2025 Compared to Year-to-Date through June 30, 2024 - Consolidated Results
Current report
Net Sales
Current report
Net sales increased 3% for the six months ended June 30, 2025 as compared to the same period in 2024, primarily due to a 9% increase in mix and price, which was partially offset by a 6% decrease in sales volumes.
Current report
Gross Profit
Current report
Gross profit margins for the six months ended June 30, 2025 decreased 10 bps to 33.1% as compared to 33.2% in the same period in 2024. Gross margins decreased 170 bps from higher product costs, primarily related to inflationary impacts, including tariffs, and 120 bps from higher freight and distribution costs, which were partially offset by 280 bps from favorable mix and price.
Current report
Selling, General and Administrative Expenses
Current report
SG&A increased $5 million to $345 million for the six months ended June 30, 2025 as compared to $339 million in the same period in 2024 primarily due to higher employee-related costs partially offset by decreased professional fees. As a percentage of net sales, SG&A decreased 20 bps to 13.4% from 13.6%.
Current report
Income from Equity Method Investments
Current report
Interest Expense, net
Current report
Interest expense, net decreased $10 million for the six months ended June 30, 2025 to $14 million as compared to $24 million in the same period in 2024 primarily due to lower borrowings.
Current report
Income Taxes
Current report
Our effective tax rate was 19.4% for the six months ended June 30, 2025 as compared to 19.7% in the same period in 2024. The decrease in rate was primarily due to higher income in low tax jurisdictions.
Current report
Year-to-Date through June 30, 2025 Compared to Year-to-Date through June 30, 2024 - Results by Segment
Current report
Home Comfort Solutions
Current report
Net sales increased 4% for the six months ended June 30, 2025 as compared to the same period in 2024 primarily due to a 10% increase in mix and price, which was partially offset by a 6% decrease in sales volumes.
Current report
Segment profit for the first six months of 2025 increased $31 million as compared to the same period in 2024 primarily due to $115 million from favorable mix and price, $11 million in increased factory efficiencies and $2 million in miscellaneous other costs, which were partially offset by $37 million from higher product costs, primarily related to inflationary impacts, including tariffs, $36 million from decreased sales volumes, and $24 million from higher freight and distribution costs as well as other inflationary impacts.
Current report
Building Climate Solutions
Current report
Net sales remained flat for the six months ended June 30, 2025 as compared to the same period in 2024 primarily due to a 6% increase in mix and price, which was offset by a 6% decrease in sales volumes.
Current report
Segment profit for the first six months of 2025 decreased $16 million as compared to the same period in 2024 primarily due to $19 million from decreased sales volumes, $19 million from higher product costs, primarily related to inflationary impacts, including tariffs, and $18 million in increases in distribution and selling as well as other inflationary impacts, which were partially offset by $40 million from favorable mix and price.
Current report
Corporate and Other
Removed paragraphs (5)
Previous report
•Operating income in the first quarter of 2025 decreased $11 million to $156 million as higher material costs, primarily related to tariff impacts and factory inefficiencies, and lower sales volumes were partially offset by favorable price and mix.
Previous report
Net sales increased 7% in the first quarter of 2025 as compared to the same period in 2024 due to favorable price and mix.
Previous report
Segment profit in the first quarter of 2025 increased $5 million as compared to the same period in 2024 primarily due to $31 million from favorable price and mix, which was partially offset by $15 million from higher product and other material costs, including tariffs, and $11 million from higher freight and distribution costs and other miscellaneous items.
Previous report
Net sales decreased 6% in the first quarter of 2025 as compared to the same period in 2024 primarily due to lower sales volumes of 9% which was partially offset by favorable price and mix of 3%.
Previous report
Segment profit in the first quarter of 2025 decreased $25 million as compared to the same period in 2024 primarily due to $12 million from lower sales volumes, $14 million from higher costs related to the new factory ramp up, manufacturing inefficiencies at existing facilities, and the impact of tariffs, and $8 million in investments in emergency replacement sales force and other miscellaneous items, which were partially offset by $9 million from favorable price and mix.
Reworded paragraphs (24)
Previous wording
Results for the first quarter of 2025 were driven by overall year-over-year sales increases while operating income decreased. Net sales increased 7% and segment profit increased $5 million for our Home Comfort Solutions segment. Net sales decreased 6% and segment profit decreased $25 million for our Building Climate Solutions segment. Segment loss decreased $9 million for our Corporate and Other segment.
Current wording
Results for the second quarter of 2025 were primarily driven by overall year-over-year net sales and profit increases. Net sales increased 3% and segment profit increased $27 million for our Home Comfort Solutions segment. Net sales increased 5% and segment profit increased $9 million for our Building Climate Solutions segment. Segment loss decreased $0.3 million for our Corporate and Other segment.
Previous wording
•Net sales of $1,073 million in the first quarter of 2025 reflected a 2% increase as compared to the same period in 2024.
Current wording
•Net sales of $1,501 million in the second quarter of 2025 reflected a 3% increase as compared to the same period in 2024.
Previous wording
•Net income for the first quarter of 2025 was $120 million.
Current wording
•Net income for the second quarter of 2025 was $278 million.
Previous wording
•Diluted earnings per share was $3.37 per share in the first quarter of 2025 as compared to $3.47 per share in the same period in 2024.
Current wording
•Diluted earnings per share was $7.82 per share in the second quarter of 2025 as compared to $6.87 per share in the same period in 2024.
Previous wording
•For the three months ended March 31, 2025, we returned $41 million to shareholders through dividend payments.
Current wording
•For the six months ended June 30, 2025, we returned $82 million to shareholders through dividend payments and repurchased $295.4 million of common stock through our share repurchase program.
Previous wording
Net sales for the first quarter of 2025 increased 2% as compared to the same period in 2024 primarily due to a 6% increase in price and mix, which was partially offset by a 4% decrease in sales volumes.
Current wording
Net sales for the second quarter of 2025 increased 3% as compared to the same period in 2024 primarily due to a 11% increase in mix and price, which was partially offset by a 8% decrease in sales volumes.
Previous wording
Gross profit margins in the first quarter of 2025 decreased 190 basis points ("bps") to 30.6% as compared to 32.5% in the same period in 2024. Gross margins decreased 270 bps from higher product costs primarily related to tariff impacts and factory inefficiencies and 110 bps from higher freight and distribution costs, which were partially offset by 190 bps from favorable price and mix.
Current wording
Gross profit margins in the second quarter of 2025 increased 120 basis points ("bps") to 34.8% as compared to 33.6% in the same period in 2024. Gross margins increased 350 bps from favorable mix and price, which were partially offset by 130 bps from higher freight and distribution costs and 100 bps from higher product costs, primarily related to inflationary impacts, including tariffs.
Previous wording
Selling, general and administrative expenses ("SG&A") remained flat at $171 million in the first quarter of 2025 as compared to the same period in 2024.
Current wording
Selling, general and administrative expenses ("SG&A") increased $4 million to $173 million in the second quarter of 2025 as compared to $169 million in the same period in 2024, primarily due to higher employee-related costs partially offset by decreased professional fees.
Previous wording
Losses (gains) and other expenses, net for the first quarter of 2025 and 2024 included the following (in millions):
Current wording
(Gains) losses and other expenses, net for the second quarter of 2025 and 2024 included the following (in millions):
Previous wording
Investments over which we do not exercise control but have significant influence are accounted for using the equity method of accounting. Income from equity method investments was $1 million in the first quarter of 2025 consistent with 2024.
Current wording
Investments over which we do not exercise control but have significant influence are accounted for using the equity method of accounting. Income from equity method investments was $2 million in the second quarter of 2025 consistent with 2024.
Previous wording
Interest expense, net decreased to $6 million in the first quarter of 2025 from $12 million in the same period in 2024 primarily due to lower borrowings.
Current wording
Interest expense, net decreased to $8 million in the second quarter of 2025 from $13 million in the same period in 2024 primarily due to lower borrowings.
Previous wording
Our effective tax rate was 18.9% for the first quarter of 2025 as compared to 19.4% in the same period in 2024. The decrease in rate is primarily due to income in low tax jurisdictions.
Current wording
Our effective tax rate was 19.5% for the second quarter of 2025 as compared to 19.9% in the same period in 2024. The decrease in rate is primarily due to higher income in low tax jurisdictions.
Previous wording
First Quarter of 2025 Compared to First Quarter of 2024 - Results by Segment
Current wording
Second Quarter of 2025 Compared to Second Quarter of 2024 - Results by Segment
Previous wording
The following table presents our Home Comfort Solutions segment's net sales and profit for the first quarter of 2025 and 2024 (dollars in millions):
Current wording
The following table presents our Home Comfort Solutions segment's net sales and profit for the second quarter of 2025 and 2024 (dollars in millions):
Previous wording
The following table presents our Building Climate Solutions segment's net sales and profit for the first quarter of 2025 and 2024 (dollars in millions):
Current wording
The following table presents our Building Climate Solutions segment's net sales and profit for the second quarter of 2025 and 2024 (dollars in millions):
Previous wording
The following table presents our Corporate and Other segment's net sales and loss for the first quarter of 2025 and 2024 (dollars in millions):
Current wording
The following table presents our Corporate and Other segment's net sales and loss for the second quarter of 2025 and 2024 (dollars in millions):
Previous wording
Segment loss decreased $9 million in the first quarter of 2025 as compared to the same period in 2024 due to a $7 million reduction in SG&A costs and $2 million from miscellaneous and other items.
Current wording
Segment loss decreased $9 million for the six months ended June 30, 2025 as compared to the same period in 2024 due to higher employee related costs and miscellaneous and other items.
Previous wording
The following table summarizes our cash flow activity for the three months ended March 31, 2025 and 2024 (in millions):
Current wording
The following table summarizes our cash flow activity for the six months ended June 30, 2025 and 2024 (in millions):
Previous wording
Net Cash Used In Operating Activities - The change in net cash used in operating activities for the three months ended March 31, 2025 compared to the net cash used in operating activities for the same period in 2024 primarily reflects less favorable changes in working capital.
Current wording
Net Cash Provided By Operating Activities - The change in net cash provided by operating activities for the six months ended June 30, 2025 compared to the net cash provided by operating activities for the same period in 2024 primarily reflects less favorable changes in working capital.
Previous wording
Net Cash Used In Investing Activities -Capital expenditures were $26 million for the three months ended March 31, 2025 compared to $30 million in the same period of 2024. Reduction in capital expenditures was primarily driven by the general expansion of manufacturing capacity and equipment of the Commercial factory in Mexico in 2024.
Current wording
Net Cash Used In Investing Activities -Capital expenditures were $54 million for the six months ended June 30, 2025 compared to $62 million in the same period of 2024. The reduction in capital expenditures was primarily driven by the general expansion of manufacturing capacity and equipment of the Commercial factory in Mexico that was completed in 2024.
Previous wording
Net Cash (Used In) Provided By Financing Activities -Net cash used in financing activities for the three months ended March 31, 2025 increased to $141 million as compared to $42 million provided by in the same period of 2024. The change was primarily due to changes in net borrowings and repayments of long-term debt and repurchase of common stock through our share repurchase program. We returned $41 million to shareholders through dividend payments for the three months ended March 31, 2025 and $39 million in the same period of 2024.
Current wording
Net Cash Used In Financing Activities -Net cash used in financing activities for the six months ended June 30, 2025 increased to $368 million as compared to $118 million provided by in the same period of 2024. The change was primarily due to changes in net borrowings and repayments of long-term debt and repurchase of common stock through our share repurchase program. We repurchased $295.4 million of shares for the six months ended June 30, 2025 and returned $82 million to shareholders through dividend payments.
Previous wording
On October 25, 2023, we established a commercial paper program, as a replacement to our Asset Securitization Program which expired in November 2023, pursuant to which we may issue short-term, unsecured commercial paper notes under the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Amounts available under the Program may be borrowed, repaid, and re-borrowed from time to time, with the aggregate face or principal amount of the CP Notes outstanding under the Program at any time not to exceed $500.0 million. The CP Notes have maturities of up to 397 days from the date of issue and rank pari passu with all of our other unsecured and unsubordinated indebtedness. The net proceeds from issuances of the CP Notes are typically used for general corporate purposes. Our revolving credit facility serves as a liquidity backstop for the repayment of CP Notes outstanding under the Program. There are no CP Notes currently outstanding under the Program as of March 31, 2025.
Current wording
On October 25, 2023, we established a commercial paper program (the "Program"), as a replacement to our Asset Securitization Program which expired in November 2023, pursuant to which we may issue short-term, unsecured commercial paper notes under the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Amounts available under the Program may be borrowed, repaid, and re-borrowed from time to time, with the aggregate face or principal amount of the CP Notes outstanding under the Program at any time not to exceed $500.0 million. The CP Notes have maturities of up to 397 days from the date of issue and rank pari passu with all of our other unsecured and unsubordinated indebtedness. The net proceeds from issuances of the CP Notes are typically used for general corporate purposes. Our revolving credit facility serves as a liquidity backstop for the repayment of CP Notes outstanding under the Program. There are $29.0 million CP Notes outstanding under the Program as of June 30, 2025.
Previous wording
We have an existing $1.1 billion unsecured revolving credit facility dated as of July 14, 2021 (as amended, the "Credit Agreement"), with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto. We had no outstanding borrowings and $1.7 million committed to standby letters of credit as of March 31, 2025. Subject to covenant limitations, $1,098.3 million was available for future borrowings after taking into consideration outstanding borrowings under our Program. The Credit Agreement includes a subfacility for swingline loans up to $65.0 million. The Credit Agreement will expire and outstanding loans will be required to be repaid in July 2026, unless maturity is extended by the lenders pursuant to two one-year extension options that we may request under the Credit Agreement.
Current wording
On May 9, 2025, we entered into an Amendment and Restatement Agreement ("Amended Credit Agreement") to our existing unsecured revolving credit facility with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto. The Amended Credit Agreement decreased our total revolving commitments from $1.1 billion to $1.0 billion with an option to increase the revolving commitments by up to $350 million at our request, subject to the terms and conditions of the Amended Credit Agreement. The Amended Credit Agreement also extended the maturity date of the revolving commitments from July 2026 to May 2030. We had no outstanding borrowings and $1.7 million committed to standby letters of credit as of June 30, 2025. Subject to covenant limitations, $969.3 million was available for future borrowings after taking into consideration outstanding borrowings under our Program. Availability under the Amended Credit Agreement is reduced by borrowings under the Program. The Amended Credit Agreement includes a subfacility for swingline loans up to $65.0 million. Maturity of the Amended Credit Agreement may be extended by the lenders pursuant to two one-year extension options that we may request under the Amended Credit Agreement.
Previous wording
We believe our cash and cash equivalents of $217.2 million, future cash generated from operations and available borrowing capacity are sufficient to fund operations, planned capital expenditures, future contractual obligations, potential share repurchases and dividends, and other needs in the foreseeable future, including the maturity of $300.0 million senior unsecured notes on August 1, 2025. Included in our cash and cash equivalents of $217.2 million as of March 31, 2025 was $20 million of cash held in foreign locations. Our cash held in foreign locations is used for investing and operating activities in those locations, and we generally do not have the need or intent to repatriate those funds to the United States. An actual repatriation in the future from our non-U.S. subsidiaries could be subject to foreign withholding taxes and U.S. state taxes.
Current wording
We believe our cash and cash equivalents of $49.2 million, future cash generated from operations and available borrowing capacity are sufficient to fund operations, planned capital expenditures, future contractual obligations, potential share repurchases and dividends, and other needs in the foreseeable future, including the maturity of $300.0 million senior unsecured notes on August 1, 2025. Included in our cash and cash equivalents of $49.2 million as of June 30, 2025 was $26.4 million of cash held in foreign locations. Our cash held in foreign locations is used for investing and operating activities in those locations, and we generally do not have the need or intent to repatriate those funds to the United States. An actual repatriation in the future from our non-U.S. subsidiaries could be subject to foreign withholding taxes and U.S. state taxes.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
The following table provides a summary of our financial results, including information presented as a percentage of net sales:
Current report — wording carried from elsewhere
Losses (gains) and other expenses, net for the six months ended June 30, 2025 and 2024 included the following (in millions):
Current report — wording carried from elsewhere
Investments over which we do not exercise control but have significant influence are accounted for using the equity method of accounting. Income from equity method investments decreased slightly to $3 million for the six months ended June 30, 2025 as compared to $4 million in the same period in 2024.
Current report — wording carried from elsewhere
The following table presents our Home Comfort Solutions segment's net sales and profit for the six months ended June 30, 2025 and 2024 (dollars in millions):
Current report — wording carried from elsewhere
The following table presents our Building Climate Solutions segment's net sales and profit for the six months ended June 30, 2025 and 2024 (dollars in millions):
Current report — wording carried from elsewhere
The following table presents our Corporate and Other segment's net sales and loss for the six months ended June 30, 2025 and 2024 (dollars in millions):