One Continent, Five Percent Lighter

On November 17, 2022, a little more than six months after he became chief executive officer of Lennox International, Alok Maskara announced that the company would explore strategic alternatives for its European commercial HVAC and refrigeration businesses. Together they represented about 5 percent of revenue. The reasoning fit in one sentence, and he delivered it himself: "This decision is consistent with our focus on North America, where we are best positioned to achieve our revenue growth and profit margin targets."

It was a narrowing, not an expansion. A climate-control maker with operations on both sides of the Atlantic would, if the plan worked, stake its growth on one continent.

Whether that bet would hold was about to be tested by forces no portfolio decision could control.

The Outsider Takes Charge

Lennox had named Maskara on March 23, 2022, effective May 9, to succeed Todd Bluedorn, who was stepping down after 15 years as chairman and chief executive. Maskara came from outside the company. He had spent five years as chief executive of Luxfer Holdings, an industrial company focused on advanced materials, and nearly a decade before that as president of several global business units at Pentair, including a Technical Solutions segment with more than $2 billion in revenue. Earlier came General Electric, where he was general manager of residential and commercial water from 2004 to 2008, and four years at McKinsey & Company. He holds a bachelor of technology in chemical engineering from the Indian Institute of Technology, a master's degree in chemical engineering from the University of New Mexico and an MBA from Northwestern University's Kellogg School of Management.

His words on arrival were conventional. He said he was eager to work with the Lennox team "to build on its strong foundation, advance the company’s leadership position, and drive long-term growth and profitability."

The November announcement was not conventional. Alongside the European review, Lennox folded its Refrigeration segment into Commercial and said it would report in just two segments, Residential and Commercial, from January 1, 2023.

Closing The European Door

The exit took most of 2023. On August 25, Lennox agreed to sell its Hyfra process-cooling unit, headquartered in Krunkel, Germany, to Glen Dimplex Group. "Divesting this European business will enable us to continue our focused strategy on North America," Maskara said.

Four weeks later, on September 21, came the larger piece: an agreement to sell the European commercial HVAC and refrigeration businesses, headquartered in Lyon, France, to funds managed by Syntagma Capital. He called it "the best way to bring closure to our portfolio simplification decision announced last year." Lennox's later results describe the European operations as divested in the fourth quarter of 2023.

The company he was narrowing was not small, and it was not in trouble. Lennox had closed 2022 with record revenue of $4.7 billion, up 13 percent. He was cutting from strength.

The Record Pulled Forward

In 2024 the focused company delivered the numbers the strategy promised. Revenue reached $5.3 billion. Core revenue rose 13 percent. Adjusted earnings per share climbed 26 percent to $22.58, and free cash flow jumped 61 percent to $785 million. "2024 was a remarkable year filled with record achievements," Maskara said in January 2025, adding that the company had "navigated the complex product transition to the new refrigerant while maintaining a disciplined approach to M&A."

The same release named one source of the surge. Fourth-quarter sales volume had benefited from an industry prebuy of R-410A equipment ahead of the refrigerant transition in 2025. Customers had bought ahead of a regulatory deadline. The demand they pulled into 2024 would be missing from 2025.

It was.

The Transitional Year

By October 22, 2025, Maskara was describing the year in terms that conceded the point: "As anticipated, 2025 is proving to be a transitional year, shaped by the impact of the refrigerant transition and difficult macroeconomic conditions." Third-quarter revenue fell 5 percent to $1.4 billion. In the same statement he cut the outlook, saying it was "prudent to update our full-year guidance to include an expected revenue decline of 1% and adjusted earnings per share from $22.75 to $23.25." He pointed to the recent Duro Dyne and Supco acquisitions, which he said strengthened the parts and accessories portfolio for the more normal market he expected in 2026.

The fourth quarter was worse. Revenue fell 11 percent to $1.2 billion. Home Comfort Solutions, the residential business, fell 21 percent as distributors destocked and new-construction sales stayed soft, and the company reported an increase in deferred system replacements as uncertainty weighed on consumers and dealers. Full-year revenue declined 3 percent to $5.2 billion.

And yet the number Maskara led with in January 2026 was a margin. "For the first time in its history, Lennox delivered annual margins over 20%," he said, crediting cost reduction actions and mix benefits. Operating margin for 2025 was 20.0 percent; segment margin was 20.4 percent, up 90 basis points.

Revenue had shrunk. Margins had not.

Two Segments, Opposite Directions

The first half of 2026 pulled Lennox in two directions. Residential kept shrinking: Home Comfort Solutions revenue fell 10 percent in the first quarter and 7 percent in the second. The commercial business, Building Climate Solutions, went the other way, growing 38 percent in the first quarter, 26 percent of it organic, and 24 percent in the second.

The complication arrived on July 29, 2026. Second-quarter revenue rose 3 percent to $1.5 billion, and Lennox held its revenue growth guidance at about 8 percent. But it cut its full-year earnings-per-share range to $23.00 to $24.00, from $23.50 to $25.00. The quarter's results had included $30 million in tariff refunds. Maskara credited "Strong momentum in Building Climate Solutions" and the acquired businesses with offsetting "the continued softness in the residential end market," and announced further additions: the Comfort-Aire and Century brands.

In April he had set out the posture plainly: "While macro uncertainties persist, we are focused on productivity measures, supply chain optimization, and thoughtful pricing actions to offset inflationary pressures."

The Next Test Arrives

The decision of November 2022 has now been run through a refrigerant transition, a residential slump and a tariff cycle. Lennox entered 2026 with its first annual margin above 20 percent on a smaller revenue base, a commercial segment growing by double digits, and a residential business still waiting for its market to recover. In January, Maskara said the company's strategy and investments positioned it to "grow revenue and profits in 2026 as the industry normalizes."

The third-quarter report is next. Four years after he narrowed Lennox to one continent, each quarter now answers the claim he made that November: that North America is where the company is "best positioned to achieve our revenue growth and profit margin targets."