Lennox International Inc., a leader in energy-efficient climate-control solutions, announced 2023 financial guidance and long-term financial targets for 2026.
For the full year of 2023, the company expects:
- Core revenue growth of 0-4%, excluding the impact of the planned divestiture of the European operations
- GAAP and adjusted EPS of $14.25-$15.25
- Corporate expenses of approximately $80 million
- Interest expense of $55-$60 million
- An effective tax rate of 19-21% on an adjusted basis
- Capital expenditures of approximately $250 million, including investments in the new Commercial manufacturing facility and investments for the upcoming refrigerant regulatory transition
- Cash from operations of $500-$600 million and free cash flow of $250-$350 million
- Stock repurchases of $100-$200 million
- A weighted average diluted share count of 35-36 million shares
The company also introduced its long-term financial targets for 2026:
- Core revenue of $5.0-$5.5 billion
- EBIT return on sales margin of 18-20%
- Free cash flow 90-100% of net income on average for 2023-2026
Maskara added, "The forecasted lower annual corporate costs reflect the G&A benefit of consolidating into two operating segments and the planned divestiture of European operations. For 2026, the forecast margin strength is the result of manufacturing productivity initiatives, engineering and sourcing-led cost-reduction efforts to further reduce product costs, and leveraging SG&A while continuing to offset inflation with price. The overall outlook reflects the benefit of our sharp focus on the North American end-market."
