Pentair Shares Fall Sharply as Company Cuts Forecast Amid Pool Sales Decline
Pentair Faces Setbacks Due to Weak Pool Segment Performance
By Apratim Sarkar and Anshuman Tripathy
July 15 (Reuters) - U.S.-listed shares of Pentair fell 17% on Wednesday after the water technology firm cut its annual forecast, citing tepid demand in its pool segment as rising costs pressure spending on outdoor living projects.
Impact on the Pool-Equipment Supply Chain
London-based Pentair's warning could heighten concerns about demand across the pool-equipment supply chain, including at major distributor Pool Corp and rival Hayward Holdings. Investors have been looking for signs that the industry's inventory correction following a pandemic-driven boom is nearing an end.
Stock Performance and Market Value
• Pentair shares were trading around $63, having declined 28% so far this year. Wednesday's drop could wipe off about $2 billion from its market value, if losses hold.
Forecast Revision and Business Slowdown
• The reduced profit and revenue forecast underscores a deeper-than-expected slowdown in the company's pool business, as distributors slash inventories ahead of next year's selling season.
• Pentair said its second-quarter results were hurt by lower sales in the segment as distributors trimmed inventory amid high interest rates and elevated inflation.
Pool Segment Overview
• Its pool segment sells pumps, filters, heaters, automation systems and other equipment for residential and commercial swimming pools.
Analyst Insights
• Stifel analyst Nathan Jones said Pentair's preliminary quarterly results and forecast cut were driven by a broader inventory destocking that Stifel estimates caused Pentair's pool segment revenue to fall 40%-42% from a year earlier.
Financial Forecast and Leadership Changes
Adjusted Profit and Revenue Guidance
• The company cut its annual adjusted profit forecast and now expects adjusted earnings per share of $4.60 to $4.80, down from its previous forecast of $5.30 to $5.40.
• It expects 2026 revenue growth to be down about 4% to 7%, compared to its prior expectations of it being up 2% to 4%.
Executive Appointments
• Pentair also said late Tuesday that it appointed former CFO Bob Fishman as interim finance chief, effective immediately.
• The appointment follows Nicholas Brazis' departure last week.
(Reporting by Anshuman Tripathy and Apratim Sarkar in Bengaluru; Editing by Joyjeet Das)
