Lennox Residential HVAC Sales Fall 7% in Second Quarter

Lennox, one of the larger makers of home furnaces, air conditioners and heat pumps, reported that sales of residential heating and cooling equipment fell 7% in the second quarter compared to a year earlier, with the number of units sold down 12%. Company leaders pointed to high mortgage rates, inflation, low consumer confidence, and slower home building as reasons homeowners and builders are holding off on new systems. That said, the decline was smaller than the first quarter's drop, and the company expects results to keep improving through the rest of the year, though a fuller recovery isn't expected until 2027.

Part of the sales drop was intentional: Lennox said it's pulling back from selling low-cost equipment for new home construction, where profit margins were too thin, and putting more focus on the replacement market — meaning systems installed in existing homes when old equipment fails or wears out. Demand from homeowners replacing aging systems has held up better than the new-construction side, and Lennox says it's gained a bit of market share there.

On cost, Lennox added price increases tied to tariffs starting July 1, matching moves other manufacturers have made. Company officials acknowledged affordability is a real concern for buyers right now, and said contractors are running more promotions to help offset costs. For homeowners weighing a replacement system, this suggests prices may keep rising modestly, even as manufacturers try to soften the impact with deals.