Lennox International (LII) Barclays 43rd Annual Industrial Select Conference summary

Market and operational trends

• Weather extremes have supported early-year demand, with March being a key month for sell-through and order rates.

• Channel inventory is now low, following the clearance of R-410A-related stock, positioning for growth in 2026.

• Warranty registration data is used to track inventory, showing high installation rates and low channel inventory.

• Residential volumes are guided to be down mid-single digits for the year, with new construction under more pressure than replacement.

• Repair activity increased last year due to regulatory changes, low home sales, and affordability constraints, but is expected to normalize.

Product and technology developments

• Expanded heat pump portfolio now covers all applications, including compact air handlers for constrained spaces.

• Regional optimization and SKU proliferation are driving share gains in heat pumps.

• Ductless solutions are offered via a Samsung joint venture, with integrated app and dealer dashboard features.

• Water heaters are distributed through a similar model with Ariston, enhancing user experience and dealer integration.

• Proprietary variable speed technology and unified smart thermostat platforms are being developed for affordability and control.

Commercial and distribution strategy

• Commercial unitary market has been down for 15 months, but growth is seen in emergency replacement and national accounts.

• Electrification and full life cycle service offerings are differentiators for national accounts.

• The Mexico plant has improved cost productivity, shortened lead times, and enhanced quality, with ramp-up headwinds now behind.

• Distribution investments include a new Dallas facility and a focus on parts and accessories, supported by recent acquisitions.

• Strategy targets capturing more contractor spend in ductless, water heaters, and accessories.