Pentair plc Q1 FY2026 earnings call

John Stouck discussed the long-term strategy, Q1 performance with 3% sales growth, adjusted operating income up 7%, ROS expanded by 100 basis points to 25.0%, and adjusted EPS guidance. Nick Brazos walked through financial results, balance sheet strength, and 2026 guidance including adjusted EPS range and segment sales expectations. Management also mentioned strategic actions, productivity execution, and updates on segment performances.

Flow sales were up 11% year-over-year to $258 million, segment income grew 22%, and return on sales expanded 210 basis points to 23.7%. Water solution sales declined 1% to $391 million, segment income grew 6%, and return on sales increased 160 basis points to 25.5%. Pool sales increased 1% to $387 million, segment income was $128 million, up 2%, and return on sales increased 30 basis points to approximately 33%.

For full year 2026, adjusted EPS guidance range is narrowed to $5.30 to $5.40, raising the low end by 5 cents. Total Pentair sales expected up approximately 2% to 4%. Second quarter sales expected up approximately 1%, adjusted operating income increase approximately 5% to 6%, and adjusted EPS guidance for second quarter is approximately $1.47 to $1.50.

Risks include macro volatility in the broader operating environment, housing and related markets, pace of non-residential investment, tariffs, inflation, and global supply chain impacts.

Q: On four-year sales guidance and volume improvement areas.

A: Seeing green shoots in commercial water and water solutions, volume improvements in flow business.

Q: On pool segment decline and sell-through.

A: Sell-through aligned with external pulse points, ship in growth to be managed.

Q: On tariffs.

A: Tariffs net-net slightly more than expected, price actions taken.

Q: On pool segment sell-through assumptions.

A: Flatish volume sell-through plus price.

Q: On capital allocation and share repurchases.

A: Expect to be active in share repurchases but not reflected in 2026 guide.

Q: On 80-20 and Quad One customers.

A: Saw effects in 2025, growth with Quad One customers.

Q: On pool new product innovation.

A: Partially in automation, new purification and membrane technologies.

Q: On company-wide guidance changes.

A: Reflected lower outlooks in regions due to supply chain, positive mix in North America.

Q: On margin expansion by segments.

A: Water quality management and flow businesses to lead margin expansion.

Q: On flow and water solutions business.

A: Flow had slight Q1 top line, water solutions seeing growth.

Q: On pool price and demand elasticity.

A: High interest rates, HELOCs affecting remodeling, focus on break and fix repair.

Q: On green shoots.

A: Result of Pentair efforts in commercial, municipal, and industrial opportunities.

Q: On Q2 guide and moving pieces.

A: Q2 reflects price increases, easier comps in Q3 and Q4.

Q: On buybacks and deals.

A: Actively in pipeline but careful on returns.

Q: On pool channel partner relationship and automation.

A: Monitor sell-through, automation has premium positioning with opportunities.