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Lennox International Inc LII Stock Quote

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Morningstar‘s Stock Analysis LII

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Economic Moat

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Slowing Residential HVAC Replacement Could Be a Near-Term Headwind for Lennox

Business Strategy and Outlook

| Brian Bernard, CFA, CPA |

Over the last decade, Lennox has capitalized on its efforts to gain market share and cut costs against a backdrop of improving end-market demand. Its margin expansion story has been remarkable, with adjusted operating margins rising from about 8% during the last sales peak in 2007 to about 15% in 2019 before the pandemic (excluding an insurance recovery benefit and adjusting for divestitures of lower-margin refrigeration businesses). We think its expanding distribution network and product portfolio have helped Lennox gain market share, while low-cost manufacturing and product sourcing and more cost-efficient product designs helped reduce its cost base.

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Key Statistics LII

Company Profile LII

Business Description

Lennox International manufactures and distributes heating, ventilating, air conditioning, and refrigeration products to replacement (75% of sales) and new construction (25% of sales) markets. In fiscal 2021, residential HVAC was 64% of sales, commercial HVAC was 21%, and refrigeration accounted for the remaining 15% of sales. The company goes to market with multiple brands, but Lennox is the company’s flagship HVAC brand. The Texas-based company generates most of its sales in North America.

Contact
2140 Lake Park Boulevard
Richardson, TX, 75080
T +1 972 497-5000
Industry Building Products & Equipment
Most Recent Earnings Jun 30, 2022
Fiscal Year End Dec 31, 2022
Employees 11,000