Pentair shares dip 17% on dour forecast amid weak pool sales
Pentair shares dropped sharply after the company cut its annual forecast, citing weak demand in its pool segment. High interest rates and inflation have pressured spending on outdoor projects, while distributors continue inventory cuts. The outloo...
By 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.
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.
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.
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.
Its pool segment sells pumps, filters, heaters, automation systems and other equipment for residential and commercial swimming pools.
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.
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%.
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.
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.
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.
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.
Its pool segment sells pumps, filters, heaters, automation systems and other equipment for residential and commercial swimming pools.
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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.
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%.
Pentair also said late Tuesday that it appointed former CFO Bob Fishman as interim finance chief, effective immediately.
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The appointment follows Nicholas Brazis' departure last week.
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