Pentair plc (PNR) had a rough Wednesday morning. The water treatment company's stock plummeted in premarket trading after it slashed its second-quarter and full-year outlook and announced a CFO change. The culprit? A bigger-than-expected inventory correction in the pool channel, plus lingering macroeconomic headwinds.

Pool Destocking Pressures Q2

Pentair now expects preliminary second-quarter sales of about $930 million, down 17% year over year. That's well below its previous guidance of $1.134 billion and the $1.137 billion analyst consensus. Adjusted EPS is expected at roughly $1.12, down from the prior outlook of $1.47 to $1.50 and below the $1.48 estimate. On a GAAP basis, EPS from continuing operations is seen at about 80 cents, versus the prior guidance of $1.39 to $1.42 and the $1.37 estimate.

The main driver: destocking of pool channel inventory. Pentair estimates this reduced quarterly segment sales by about $170 million and cut segment income by approximately $105 million. On the bright side, the company expects to receive roughly $35 million in tariff refunds related to tariffs previously collected under the International Emergency Economic Powers Act (IEEPA).

Pentair Slashes 2026 Outlook

The pain isn't just a one-quarter thing. Pentair now expects full-year sales of $3.884 billion to $4.009 billion, representing a decline of about 4% to 7%. That compares with its previous forecast of $4.260 billion to $4.343 billion and the $4.284 billion analyst estimate. Adjusted EPS guidance was cut to $4.60 to $4.80 from $5.30 to $5.40, below the $5.34 consensus. GAAP EPS guidance fell to $3.90 to $4.10 from $4.83 to $4.93, versus the $4.91 estimate.

Pool destocking is expected to reduce full-year segment sales by about $250 million and income by approximately $155 million. The outlook includes an estimated $35 million to $50 million in IEEPA refunds. Management cited a larger-than-expected inventory reset among major pool channel partners, as well as elevated interest rates and inflation. Pentair said its Flow and Water Solutions segments and corporate spending remain broadly in line with prior expectations.

Former CFO Returns

Amid the financial turbulence, Pentair also announced a CFO transition. Nicholas Brazis left on July 10 to pursue an opportunity at a private company. Stepping in as interim executive vice president and CFO is Bob Fishman, a familiar face who previously served as Pentair's CFO.

CEO John L. Stauch tried to strike a reassuring tone: "We believe these headwinds are temporary and we are taking decisive actions to adapt the business to current demand levels while positioning it to return to normalized performance in 2027."

Pentair also repurchased approximately 2 million shares for $150 million during the second quarter, signaling some confidence in its long-term prospects despite the near-term pain. The company will report complete second-quarter results before the market opens on July 28.

PNR Price Action: Pentair shares were down 20.61% at $60.08 during premarket trading on Wednesday. The stock is trading at a new 52-week low.