On September 3, Lennox International (NYSE:LII) opened a new training center in Fort Lauderdale, Florida, built to tackle one of commercial HVAC’s biggest problems: not enough skilled people to do the work. The facility now headquarters Lennox’s National Account Services division and puts hands-on instruction at the center of how that business grows. It’s a modest building with a bigger implication. A company doesn’t dedicate 6,000 square feet to technician training unless it expects to need a lot more of them soon.
Building Its Own Bench
The Fort Lauderdale facility gives NAS technicians, managers, and field leaders a dedicated space to build skills through named career tracks, from Skilled Technician up through Advanced Technician and Lead Master, with a separate Manager-in-Training path for future field leaders. Lennox also runs a Build-A-Tech apprenticeship, a paid program spanning six to eight months that blends classroom work, field experience, and mentorship. Since 2016, that pipeline has trained nearly 1,600 technicians, a real dent in an industry that has struggled to replace retiring workers. Lennox isn’t stopping at its own staff. It’s also building an 18,000-square-foot training and experience center focused on commercial HVAC near company headquarters in Richardson, Texas, this one aimed at customers rather than employees. That facility will join nine existing Lennox LIVE residential training labs and a separate refrigeration training site in Stone Mountain, Georgia.
The financial backdrop supports the bet. Lennox’s Building Climate Solutions segment, its commercial arm, grew revenue 24% last quarter, with 15 percentage points coming from existing operations rather than deals. Segment profit rose 29% to $155 million, and margin expanded 100 basis points to 25.5%. That growth came from strong work with national account customers, brisk emergency replacement activity, and demand for its service offerings. Lower inventory levels also pushed operating cash flow up sharply, to $172 million from $87 million a year earlier, leaving room for $132 million in share repurchases during the quarter.
Housing Still Holds It Back
Home Comfort Solutions, the residential side, tells a different story. Revenue there fell 7% last quarter, and segment profit dropped 12% to $222 million as margin slipped 130 basis points to 23.7%. Residential new construction remains a real headwind, and lower sales volumes explain most of the profit decline. Companywide, product cost inflation and factory under-absorption cut into results too, cushioned only partly by tariff refunds that arrived earlier than expected, a benefit that won’t necessarily repeat.
The effect shows up at the bottom line. GAAP diluted earnings per share came in flat at $7.72 even as total revenue rose 3%, and overall segment margin slipped 30 basis points to 23%. Lennox also trimmed its full-year earnings guidance to a range of $23.00 to $24.00, well below the $23.50 to $25.00 window management had set earlier. And of the roughly 8% full-year revenue growth Lennox still expects, about 5 percentage points are projected to come from acquisitions like Duro Dyne, Supco, Comfort-Aire and Century, meaning growth from existing operations is running well behind the commercial segment’s pace alone.
What The Market Sees
39 hedge funds held Lennox shares last quarter, down from 40 the quarter before, a modest pullback rather than a rush for the exits. Short interest sits at 6.95% of the float, enough to reflect real skepticism but far from a crowded trade. The stock trades at 13.66 times forward earnings, as of September 21, a modest multiple for a company with a fast-growing commercial segment sitting next to a shrinking residential one. That mix, a cheap multiple, light fund selling, and real short interest, suggests investors are still sorting out which half of the business will define Lennox next.
The Bet Underneath It All
Lennox is training technicians for a commercial HVAC business that’s already outgrowing its residential counterpart, and the new Fort Lauderdale center backs that shift with real infrastructure, not just a press release. Whether that bet pays off depends on how long Building Climate Solutions can keep growing fast enough to cover for a housing market that hasn’t turned yet. Margin pressure and guidance that’s already been trimmed once show how thin that cushion currently is. The training pipeline Lennox just built will take years to prove what it was worth.
READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In.
Hedge Fund Resource Center