Lennox, Carrier report double-digit drops in Q1 residential sales

Lennox’s residential business, Home Comfort Solutions, saw a 10 percent year-over-year revenue decrease in the first quarter, the company reported Wednesday. 

What’s happening: “Organic sales volumes declined 21 percent,” CFO Michael Quenzer said on the company’s earnings call, “but this represented a meaningful improvement from a 32 percent decline in [Q4] 2025.”

• Sentiment “in the two-step channel improved as distributors began to restock ahead of the summer season,” added CEO Alok Maskara. 
• Meanwhile, tariffs and material costs had a notable impact on the quarter: “Aluminum is up about 25 percent, steel is up 20 to 25 percent, diesel is up 50 percent, and copper is up 10 to 15 percent,” Quenzer noted. 

Zoom in: Carrier on Thursday reported similar trends. “Residential sales were down 12 percent, driven by movement,” said CFO Patrick Goris. “That is the unit volume from distributors to dealers, which was down eight percent in the quarter.”

• The company expects second-quarter residential sales to be down “about mid-teens,” Goris added; however, “year-over-year, we expect significant growth in [the Americas] in the second half” of the year. “It’s going to be in the teens.” 
• Contractors and distributors “understand that when we get a sudden input cost increase, we’ll take every action we possibly can to mitigate it with supply chain actions,” said CEO David Gitlin. 

Between the lines: The Trump administration in early April announced changes to Section 232 tariffs, which stand to drive up equipment prices from today’s levels, as Homepros previously reported; however, if those are reduced, “then we would change the pricing that we put in place,” Gitlin suggested. 

Of note: Leaders of both companies were asked about the slate of recent proposed class-action lawsuits filed against seven major HVAC manufacturers, including Carrier and Lennox.  

• “The lawsuit contains only plaintiffs’ allegations, and there has been no finding of wrongdoing,” Maskara said. “We dispute the accuracy of the allegations and will actively and vigorously defend our position through proper legal channels.”
• “I think the case is meritless, and we’ll defend it vigorously as you’d expect,” Gitlin added. “Look, you’re not gonna find a more compliant company or more compliant industry than us. It’s meritless, and we’re gonna fight it.”