Pentair plc: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 28 July 2026: press release. Guidance figures: 2 raised, 4 lowered, 5 new, 4 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Sales fell 17 percent: Second quarter sales were $933 million, down 17 percent from the prior-year quarter. Management attributed the decline mainly to a Pool channel inventory destock of about $170 million. Source
• Operating income fell 24 percent: Operating income was $167 million, with return on sales of 17.9 percent. Adjusted operating income was $237 million, down 20 percent, at a 25.4 percent adjusted return on sales. Source
• Pool sales down 42 percent: Pool sales fell 42 percent, and core sales also declined 42 percent. Pool segment income was $58 million, down 62 percent, and return on sales was 23.4 percent, down 1,230 basis points. Source
• Pool decline blamed on channel realignment: Management said the Pool decline reflected a larger inventory realignment with major channel partners than estimated, plus higher interest rates and inflation. Source
• Definitive deal to buy Taco: Pentair entered into a definitive agreement to acquire Taco Group Holdings, reported in a separate press release issued the same day as the results. Source
• Full-year GAAP EPS guidance lowered: Full-year GAAP EPS guidance was updated downward from the July 14 figure, while adjusted EPS guidance was reaffirmed at the same range. Source

“As shared in the July 14th preannouncement, our results were below expectations due primarily to a larger-than-anticipated inventory correction in the Pool channel.”

John L. Stauch, Pentair’s President and Chief Executive Officer

Guidance

What changed from last quarter

• Guidance lowered: Full-year GAAP EPS guidance was updated below the July 14 range, to $3.86 to $4.06. Source
• Guidance kept: Adjusted EPS guidance and reported full-year sales guidance were reaffirmed from July 14. Source
• New guidance: Third-quarter 2026 guidance for GAAP EPS, adjusted EPS and sales was introduced; the July 14 release gave no third-quarter figures. Source
• Guidance raised: Full-year restructuring and other costs were raised to about $58 million from about $55 million. Source
• New: Pentair agreed to acquire Taco Group Holdings under a definitive agreement, announced with the results. Source
• New: Bob Fishman, former Executive Vice President and CFO, was appointed Interim Executive Vice President and CFO, effective immediately.
• Ended: Nicholas Brazis left the company on July 10, 2026.

Second quarter results

• Sales fell 17 percent: Second quarter sales were $933 million, down 17 percent from the prior-year quarter. Management attributed the decline mainly to a Pool channel inventory destock of about $170 million. Source
• Operating income fell 24 percent: Operating income was $167 million, with return on sales of 17.9 percent. Adjusted operating income was $237 million, down 20 percent, at a 25.4 percent adjusted return on sales. Source
• Adjusted margin down 100 basis points: Adjusted return on sales was 25.4 percent, down 100 basis points from the prior-year quarter. GAAP return on sales was 17.9 percent, down 150 basis points. Source
• EPS down, matched July 14 view: GAAP EPS was $0.80, down 11 percent; adjusted EPS was $1.14, down 18 percent. Management said GAAP EPS matched the July 14 communication, and adjusted EPS was slightly higher. Source

Segment performance

• Flow sales up 5 percent: Flow sales rose 5 percent, with core sales down 1 percent. Flow segment income was $70 million, up 27 percent, and return on sales was 26.5 percent. Source
• Water Solutions income up 17 percent: Water Solutions sales fell 5 percent, with core sales down 3 percent. Segment income was $126 million, up 17 percent, and return on sales was 30.0 percent. Source
• Pool sales down 42 percent: Pool sales fell 42 percent, and core sales also declined 42 percent. Pool segment income was $58 million, down 62 percent, and return on sales was 23.4 percent, down 1,230 basis points. Source
• Residential irrigation moved to Water: From January 1, 2026, legacy residential and irrigation flow moved from the Flow segment into Water Solutions. Pool is unchanged, and prior periods were reclassified. Source

“We are confident we are taking the right steps to position the business to deliver significant sales and EPS growth in 2027”

John L. Stauch, Pentair’s President and Chief Executive Officer

Costs, margins and interest

• Gross margin up, SG&A share up: Gross profit was 42.4 percent of net sales, against 40.7 percent a year earlier. Selling, general and administrative expense was 22.0 percent of net sales, against 19.0 percent. Source
• IEEPA refunds included in results: Results include approximately $35 million of refunds of tariffs collected under the International Emergency Economic Powers Act, referred to as IEEPA refunds. Source
• Net interest expense higher: Net interest expense was $19.4 million, up from $17.9 million. It was 2.1 percent of net sales, against 1.6 percent a year earlier. Source

Pool channel and demand

• Pool decline blamed on channel realignment: Management said the Pool decline reflected a larger inventory realignment with major channel partners than estimated, plus higher interest rates and inflation. Source
• Receivables down, inventories up: Accounts receivable fell to $482.7 million from $673.2 million at year-end, while inventories rose to $666.1 million from $632.6 million. Source
• Channel inventory right-sized into 2027: Management said full-year guidance includes right-sizing channel inventory ahead of the 2027 pool season, and that actions are under way to improve execution and order patterns. Source

“We have assessed our full year forecast and feel confident that we can execute successfully in 2026 and position ourselves for significant growth in 2027.”

Bob Fishman

Cash flow and shareholder returns

• Operating cash flow lower: Operating cash flow was $572 million, against $607 million a year earlier. Free cash flow was $553 million, against $596 million. Source
• Repurchased $150 million of shares: The company bought back 2.0 million shares for $150 million during the quarter. Source
• $650 million authorization remaining: At June 30, 2026, $650.0 million remained available under the share repurchase authorization. Source
• Dividend paid, 50th year of increases: A regular dividend of $0.27 per share was paid in the second quarter. Management noted that this year marks the 50th consecutive year of dividend increases. Source

Taco Group acquisition

• Definitive deal to buy Taco: Pentair entered into a definitive agreement to acquire Taco Group Holdings, reported in a separate press release issued the same day as the results. Source
• Taco excluded from guidance: Full-year 2026 guidance does not include the anticipated acquisition of Taco Group Holdings. Source

2026 guidance

• Full-year GAAP EPS guidance lowered: Full-year GAAP EPS guidance was updated downward from the July 14 figure, while adjusted EPS guidance was reaffirmed at the same range. Source
• Full-year sales and operating income kept: Full-year reported sales and operating income guidance were reaffirmed or kept at the July 14 ranges. Source
• Third-quarter guidance introduced: Third-quarter guidance was introduced for reported sales, GAAP EPS and adjusted EPS, each shown against third quarter 2025. Source
• Amortization guidance raised: Full-year intangible amortization guidance is now about $62 million, up from about $60 million on July 14. Source

People and leadership

• Fishman appointed interim CFO: Bob Fishman, the former CFO, was appointed Interim Executive Vice President and CFO, effective immediately.
• Search for permanent CFO: The company said it has begun a search to identify its next Chief Financial Officer.
• Former CFO left July 10: Nicholas Brazis left the company on July 10, 2026, to join a private company.

Coming up, as management said on 28 July 2026

• Pool execution actions under way: Management said it is acting to improve Pool execution, inventory visibility and order patterns. Source
• Pool growth targeted for 2027: Management said the Pool business is being positioned to deliver growth in 2027 after the channel reset. Source
• Dividend payable August 7: The next regular dividend of $0.27 per share is payable August 7, 2026, to holders of record on July 24, 2026. Source

Figures management reported

Risks management discussed

• Demand: The Pool channel inventory realignment with major partners was larger than previously estimated. Source
• External: Higher interest rates and inflation were cited as worsening Pool business conditions. Source
• Operational: Management said Pool execution and inventory visibility require action, and it is taking steps to address them. Source

Earlier plans management reported on

• Met: Second quarter GAAP EPS of $0.80 matched the July 14 preannouncement. Source
• Not stated: Adjusted EPS of $1.14 was described as slightly higher than the July 14 communication. Source
• Not stated: Management reaffirmed July 14 guidance for full-year reported sales and adjusted EPS. Source
• On track: Management said Flow and Water Solutions remain in line with expectations. Source
• On track: Management said Flow and Water Solutions are progressing against their respective growth priorities. Source

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 results
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.