Inve US ▾
PNPNR

Pentair (PNR) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Industrials· Apr 28, 2026

Source: earnings call transcript

Executive summary

Pentair Q1 FY26 — Strong Margins and Raised EPS Outlook

Pentair delivered solid Q1 FY26 results, driven by disciplined execution and the Pentair Business System, achieving strong margin expansion and double-digit adjusted EPS growth. The company raised its full-year adjusted EPS guidance while navigating macro volatility and residential market headwinds, particularly in the Pool segment where channel inventory adjustments are expected. Strategic investments in digital solutions and capital returns remain key priorities.

Highlights

5

  • Sales increased 3% year-over-year to over $1 billion in Q1 FY26.

  • Adjusted operating income grew 7% in Q1 FY26 to $259 million.

  • Return on Sales (ROS) expanded by 100 basis points to 25.0% in Q1 FY26, marking the 16th consecutive quarter of margin expansion.

  • Adjusted EPS rose double digits to $1.22 in Q1 FY26.

  • Repurchased $200 million of outstanding shares in Q1 FY26, reflecting confidence in strategy.

Concerns

4

  • Ongoing headwinds in residential markets, with housing and related markets being closely watched.

  • Pool segment sell-through dynamics may require channel partners to reduce purchases in Q2 and Q3 FY26.

  • Tariffs are net-net slightly more than initially expected, and some commodities are running hotter.

  • Slightly lower outlook in Europe and Asia due to supply chain challenges related to the Middle East.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Adjusted EPS
$5.30 to $5.40
high materiality
High
Full-year 2026 Total Pentair Sales Growth
up approximately 2% to 4%
high materiality
High
Full-year 2026 Flow Sales Growth
up approximately mid-single digits to high single digits
medium materiality
High
Full-year 2026 Water Solutions Sales Growth
approximately flat
medium materiality
High
Full-year 2026 Pool Sales Growth
approximately 1% to 3%
high materiality
Medium
Full-year 2026 Total Pentair Adjusted Operating Income Growth
approximately 6% to 8%
high materiality
High
Full-year 2026 Pentair Business System-driven Productivity
$70 million net of investment
medium materiality
High
Q2 2026 Sales Growth
up approximately 1%
medium materiality
High
Q2 2026 Flow Sales Growth
up approximately high single digits
medium materiality
High
Q2 2026 Water Solutions Sales Growth
down approximately low single digits
medium materiality
High
Q2 2026 Pool Sales Growth
approximately flat to up 1%
medium materiality
High
Q2 2026 Adjusted Operating Income Growth
approximately 5% to 6%
medium materiality
High
Q2 2026 Adjusted EPS
$1.47 to $1.50
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Flow
Sales driven by Hydra-Stop acquisition, growth in Quad 1 accounts, and focus on U.S. water infrastructure, data centers, and commercial buildings. Price offset inflation.
Core sales growth: 2%Segment income growth: 22%Return on sales expansion: 210 bps
$258 million11%—23.7%
Water Solutions
Sales decline primarily due to targeted portfolio shaping and exit of the Commercial Services business in Q2 2025. Pro channel growth supported by combining Residential Flow and Residential Water Solutions businesses. Margin expansion driven by Pentair Business System productivity savings. Price offset inflation.
Core sales growth: 1%Segment income growth: 6% to $100 millionReturn on sales expansion: 160 bpsPro channel growth: mid-teens
$391 million-1%—25.5%
Pool
Sales increase driven by investments in regional focus, targeted sales and marketing programs, new product innovation, and breakthrough innovation to grow the total addressable market. Price offset inflation, and Pentair Business System drove net productivity.
Core sales growth: 1%Segment income growth: 2%Return on sales expansion: 30 bps
$387 million1%—33%

Product announcements

ProductTypeDetails
New purification and membrane technologiesroadmap
Low-end automation solutionroadmap

Deals & partnerships

Hydra-Stop Acquisition contributing to Flow segment growth.

Acquired in Q3 last year, contributing significantly to Flow's Q1 FY26 sales growth and expected Q2 performance.

Commercial Services business Exit of a business within Water Solutions.

Targeted portfolio shaping led to the exit of this business in Q2 2025, affecting year-over-year comparisons for Water Solutions.

Risks & headwinds

Residential Market Headwinds Ongoing

Ongoing

Mitigation:Focused on prudent pricing, productivity, and execution; investing in technology to expand TAM and commercial opportunities.

Macro Volatility Ongoing

Broader operating environment

Mitigation:Taking actions to manage risk and support consistent execution; focused on prudent pricing, productivity, and execution.

Housing and Related Markets Ongoing

Closely watching

Mitigation:Focused on prudent pricing, productivity, and execution.

Pace of Nonresidential Investment Ongoing

Closely watching

Mitigation:Focused on prudent pricing, productivity, and execution.

Pool Channel Inventory Adjustment Q2 and Q3 FY26

May require channel partners to reduce purchases in Q2 and Q3

Mitigation:Active management of sell-in and sell-out dynamics; incorporated assumptions into guidance update.

Tariff and Commodity Inflation FY26

Tariffs slightly more than expected; some commodities running hotter

Mitigation:Taking price actions to neutralize; expect net neutral impact over the year.

International Supply Chain Challenges FY26

Slightly lower outlook in Europe and Asia

Mitigation:Reflected in guidance; North America positive mix offsetting lower margin mix in affected regions.

Consumer Discretionary Spending Pressure (Pool) Ongoing

High interest rates, higher HELOCs, overall cost of living

Mitigation:Focus on break-and-fix repair; working harder to build programs around upgrades; driving growth actions by region.

What to watch in Q2 FY26

Pool Channel Inventory Adjustment

Q2 and Q3 FY26
Current Sell-in outpaced sell-through at end of last year
Target Lower shipments in Q2 and Q3, sell-in aligns with sell-through

Why it matters

This will directly impact Pool segment revenue and indicate the health of channel inventory, crucial for future growth dynamics.

sell-through levels for this Pool season, which concludes in Q3 of 2026, may require our channel partners to reduce purchases in Q2 and Q3 to reflect 2026 pool industry growth.

Find out whether PNR delivers this. Inve re-checks your case every morning.

Q&A highlights

With price and FX tailwinds fading, which areas of the business are expected to drive volume improvement in the second half of the year?

Management sees green shoots and volume improvements in Commercial Water, Water Solutions, and pockets of the Flow business, driven by innovation and targeted market efforts. They are working to drive both margin and volume expansion in Commercial Water Solutions and Pool, with Flow and Water Quality Management focusing on structural cost improvements.

“We're seeing green shoots in our Commercial Water and Water Solutions business. We're seeing volume improvements across pockets of our Flow business as well. Several of our innovation and targeted market efforts in those businesses are reading out.”

asked by Adam Farley · answered by John Stauch

2 min read 5 chapters

Detailed narrative

Long-term Strategy and Investor Day Highlights

Pentair reiterated its long-term strategy outlined at its recent Investor Day, targeting growth and profitability through 2028. The strategy focuses on its balanced water portfolio across Move, Improve, and Enjoy Water segments, emphasizing innovation, elite customer experiences, and operational efficiencies. The company expects to leverage its strong cash flow and ROIC for enhanced value creation, building on structural improvements to its operating model for more durable financial performance.

Q1 Performance and Strategic Execution

The company delivered a solid Q1 FY26, achieving 3% sales growth and 100 basis points of margin expansion, driven by disciplined execution and the Pentair Business System. This performance was supported by targeted growth initiatives, including investments in technology to expand Pool's total addressable market, accelerate growth in commercial buildings and data center infrastructure, and support U.S. water infrastructure needs. Pentair also strengthened digital capabilities and leveraged global R&D resources across its portfolio.

Leadership Transitions

Pentair announced the departure of Jerome Pedretti after 20 years of leadership and Shelly Hubbard's transition from VP of Investor Relations to a new role at a larger company. Jeff Thompson, CFO of the Flow and Water Solutions segment, will assume the VP, Investor Relations role. These changes are part of ongoing talent development and rotation within the company.

Productivity and Cost Management

The Pentair Business System, including 80/20 principles and transformation processes, continues to drive significant productivity gains. In Q1, the company achieved $21 million in net productivity, contributing to margin expansion across all three segments. Management expects to deliver approximately $70 million in net productivity for the full year 2026, offsetting inflation and investing in growth initiatives.

Market Dynamics and Outlook Management

Pentair is navigating macro volatility, closely monitoring housing and nonresidential investment markets. While seeing 'green shoots' from targeted efforts in Commercial Water and Flow, the Pool segment faces channel inventory adjustments. The company anticipates tariffs and commodity inflation to have a net neutral impact for the full year due to prudent pricing actions. A slightly lower outlook in Europe and Asia is factored into the guidance due to supply chain challenges.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.