Lennox International (LII) Gross Margin — Quarter Ended Mar 31, 2023

Revenue remained stable while cost of revenue decreased, leading to higher gross profit and an improved gross margin. The gross margin strengthened compared to both the prior quarter and the same quarter last year.

Gross margin takeaway

Quarter ended Mar 31, 2023 · FY2023 Q1

The gross margin improvement was primarily driven by a reduction in cost of revenue relative to revenue, as revenue was flat while cost of revenue declined.
Compared to the prior quarter, gross margin improved from lower to higher. Compared to the same quarter last year, gross margin also improved from lower to higher.

Gross margin snapshot

The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.

Gross margin

29.2%

Gross profit

$306.6M

Revenue

$1.0B

Cost of revenue

$742.8M

Quarter-over-quarter change

n/a

Year-over-year change

+2.8 pts

Quarterly gross margin trend

A four-quarter view of the revenue and direct-cost bridge behind gross margin.

Period	Revenue	Gross profit	Cost of revenue	Gross margin
Mar 31, 2023	$1.0B	$306.6M	$742.8M	29.2%

Quarterly comparisons

Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.

Previous-quarter change

Previous quarter unavailable

n/a

Year-over-year change

Mar 31, 2022

+2.8 pts

What the margin says

Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.

The gross margin improvement was primarily driven by a reduction in cost of revenue relative to revenue, as revenue was flat while cost of revenue declined.

Compared to the prior quarter, gross margin improved from lower to higher. Compared to the same quarter last year, gross margin also improved from lower to higher.

Monitor inventory levels, which increased from the prior quarter, as they may influence future cost of revenue.