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    PNR
    Earnings call· Mar 2026(Q1 FY26)

    PENTAIR Q1 FY26 earnings call PNR

    Apr 28, 2026 Source

    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

    13
    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

    3
    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%

    Operational metrics

    19
    Adjusted Operating Income
    $259 millionup 7%
    Q1 FY26

    A first quarter record for Pentair.

    Return on Sales
    25.0%up 100 bps
    Q1 FY26

    16th consecutive quarter of margin expansion.

    Adjusted EPS
    $1.22up 10%
    Q1 FY26

    Rose double digits.

    Net Productivity
    $21 million
    Q1 FY26

    Delivered while continuing to invest in targeted growth initiatives and innovation pipeline.

    Net Debt Leverage Ratio
    1.7x
    Q1 FY26

    Reflects a strong balance sheet.

    Return on Invested Capital
    16.6%up from 15.8% a year ago
    Q1 FY26

    Reflects strong commitment to ongoing shareholder value creation.

    Share Repurchases
    $200 million
    Q1 FY26

    Reflecting continued confidence in strategy and execution.

    Dividend Increase
    8%
    Q1 FY26

    Achieved 50th consecutive year of dividend increases, making Pentair a Dividend King.

    Full-year Productivity Target
    $70 million
    FY26

    Expected to be another strong year of Pentair Business System-driven productivity.

    Full-year Price
    low single-digit
    FY26

    Expected across the year for the aggregate of Pentair.

    Full-year Volume
    approximately flat
    FY26

    Expected across the full year for the aggregate of Pentair.

    Hydra-Stop Sales
    $10 million
    Q2 FY26

    Included in Q2 Flow sales guidance.

    Hydra-Stop Return on Sales
    30%
    Q2 FY26

    Associated with Hydra-Stop sales in Q2.

    Free Cash Flow Conversion
    approximately 100%
    FY26

    Expected to generate strong free cash flow in 2026 like historically.

    Price Offset Inflation
    —
    Q1 FY26

    Price offset inflation in Q1, and is expected to for the full year.

    International Outlook
    slightly lower outlook
    FY26

    Reflected in guidance due to supply chain challenges related to the Middle East.

    Pool Sell-in/Sell-through Dynamics
    sell-in outpaced sell-through
    end of last year

    Sell-in outpaced sell-through at the end of last year, leading to anticipated channel inventory adjustments in Q2 and Q3.

    Pool Market Share
    feel good about our positions
    Q1 FY26

    Despite a flattish overall volume market, the company maintains strong market positions.

    Water Solutions Pro Channel Growth
    mid-teens
    Q1 FY26

    Reflecting gains supported by combining Residential Flow and Residential Water Solutions businesses.

    Industry KPIs

    5
    MetricValueDetails
    Tariff cost impactslightly more than we currently expected
    Parts aftermarket businessfocus on growing flow control equipment and aftermarket sales
    Data center prime power demandaccelerate growth
    Dealer inventory months of supplychannel partners to reduce purchases
    Industry production market size forecastsflattish

    Product announcements

    2
    ProductTypeDetails
    New purification and membrane technologiesroadmap
    Low-end automation solutionroadmap

    Deals & partnerships

    2
    Hydra-StopAcquisition 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 businessExit 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

    8
    Residential Market HeadwindsOngoing

    Ongoing

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

    Macro VolatilityOngoing

    Broader operating environment

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

    Housing and Related MarketsOngoing

    Closely watching

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

    Pace of Nonresidential InvestmentOngoing

    Closely watching

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

    Pool Channel Inventory AdjustmentQ2 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 InflationFY26

    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 ChallengesFY26

    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

    5

    Pool Channel Inventory Adjustment

    Q2 and Q3 FY26
    CurrentSell-in outpaced sell-through at end of last year
    TargetLower 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.

    Q&A highlights

    6

    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 read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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🌐.

    AI-generated summary of the company’s earnings call. Not investment advice.