2026.10.09 | GP | Industrials | Pentair Pool: Share Recovery & Margin Outlook

Primary:

PNR:NYSE

Associated:

LESL

Heritage Pool Supply Group, Inc.

HD

POOL

FDR:SM

HAYW

SWIM

Viewpoint:

Former Executive

Moderator: Katherine Spurlock (KS)

Gord Dalley (GD), Former Strategic Sales Manager, North America - Pentair Process Technologies

SUMMARY

Overview

The discussion assessed Pentair’s ability to recover from pool-channel destocking, regain aftermarket share, and restore margins. The expert, drawing on extensive water-treatment experience, was skeptical that the pool market would recover as quickly as management expects. Weak construction, elevated interest rates, dealer disruption, and competitive pressure remain major obstacles.

Pentair’s strongest opportunities are its market-leading pump portfolio, improvements to dealer engagement, and expansion into commercial and industrial markets through its Taco acquisition. Flow and Water Solutions could partly offset pool weakness if leadership, sales execution, and market focus improve.

Key Insights

The expert characterized pool destocking as a substantial structural reset that may require pricing changes to clear excess inventory and normalize advance purchasing. Pentair’s aftermarket share loss appears linked to aggressive pricing, weaker dealer relationships, uneven implementation of its 80-20 strategy, and product gaps outside pumps. Share recovery within 6–18 months may be possible among leading dealers, but smaller partners could respond more slowly. The expert doubted that the targeted pool rebound and 30% or higher margins are achievable on the proposed schedule. The moderator repeatedly explored this skepticism. New pool construction remains more economically attractive than replacement activity. Aftermarket demand is unlikely to fully offset sustained construction weakness. Taco was viewed positively because it expands access to data centers, HVAC, healthcare, education, and multifamily applications. Systems and commercial integration are the principal risks. Continued consolidation and private-equity ownership should increase customer purchasing power and pressure OEM and distributor margins.

Competitive Landscape

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Company or segment

Pentair

Positioning

Advantages

Risks or pressures

Strong in pool pumps; rebuilding aftermarket presence

Large installed base, recognized products, experienced management

Dealer disruption, auxiliary product gaps, weak pool demand

Hayward and Fluidra

Key pool-equipment rivals

Potential beneficiaries of Pentair’s channel missteps

Exposed to the same macroeconomic weakness

Private-label suppliers

Emerging lower-price competition

Price advantage

Potentially weaker durability and support

Home Depot and Heritage

Expanding professional distribution platform

Broad physical footprint, rapid product availability, digital partnerships

Could compress supplier and distributor margins

Pool Corp

Major incumbent distributor

Scale and established channel relationships

Customer consolidation and margin pressure

Taco

Commercial and industrial growth platform

Large replacement base and exposure to faster-growing end markets

Difficult integration and synergy execution

Quantitative Insights

Metric

Detail and interpretation

Destocking impact

Management expects a $250 million sales reduction and $155 million operating-income impact, including $170 million of sales pressure in the second quarter

Pool pricing

Planned increases moderate to 3%–5% from 7%–8%, likely reducing advance-buying incentives

Share recovery

Management targets 6–18 months; the expert expects uneven progress

Pool outlook

Sales are projected to decline 18%–22%, contributing to a companywide decline of 4%–7%

Recovery target

Management projects 14.5% pool growth and margins above 30%; the expert considers this highly challenging

Taco acquisition

$1.4 billion purchase price, $540 million projected revenue, margins above 20%, and $30 million of synergies over 2–3 years

Taco installed base

Approximately 40 million units, with 85% of revenue linked to replacement, maintenance, and upgrades

KS: Hello, everyone. My name is Katherine Spurlock, and I'm a moderator with Guidepoint. I want to welcome

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everyone to our call today, Pentair: Can Gain Share and Restore 30% margins in 2027 with Gord Dalley. If you have any questions for our advisor throughout the call, please email ask@guidepoint.com and I'll work your questions into our discussion. Your questions will be anonymous. Gord, I just want to make sure you will not speak about any material non-public information, security prices, your investment holdings, or provide any investment recommendations during the teleconference. Do you confirm?

GD: Yes, I do.

KS: Good. Thank you. And thank you for being with us today. To start, can you please give us a brief introduction on yourself, some background on your experience in the industry, your role with Pentair, and briefly why you left, and then we can begin our call. Thank you.

GD: Yes, hi. I've been in the water treatment space for the last 30 years across North America and also some projects in Europe as well. I've worked for several brand name companies, including Pentair. I was at Pentair just over 11 years and responsible in North America for the strategic water market in North America. And it was great, lots of fun, met a lot of good people. Just decided to try something a little bit different closer to home. You know, there was a lot of travel and a lot of stress involved, so just decided to step back and try something a little different in a consulting role, just sort of doing my own thing, still attached to several customers I know and helping them behind the scenes.

KS: All right. Thank you. That's helpful. Let's get started. Pentair expects pool channel destocking to reduce 2026 sales by $250 million and operating income by $155 million, with $170 million of that sales reduction occurring in Q2 as major distributors cut orders to boost inventory turns. What are your thoughts? How will 2026 destocking and Pentair's pool division affect channel inventories, pricing, and 2027 early buys? Do you think further destocking is needed?

GD: Well, my personal opinion is, you know, having worked for the organization and some of the management team I worked for still in place, I would say that the destocking cycle for 2026 represents a pretty deep structural reset for that $250 million revenue drag. I think they might look at some aggressive right-size pricing to clear the channel overhang by the end of 2026. That'll alter pricing structures and possibly allow for resetting of early buy behavior ahead of the 27 pool season.

KS: Thank you. Pentair expects 2027 pool price hikes to moderate to 3% to 5% down from 7% to 8% last year, noting that smaller increases won't drive the same pre-buy energy across the channel. What do you think of these plans? How sharply do you expect fall pre-buy volumes to drop off this year? Do you think the price increases of 3% to 5% versus 7% to 8% are enough? Thank you.

GD: Yeah, I think they're going to have to adjust and the 3% to 5% range is something that will possibly work for that group. It, again, in the past it was. They had really an aggressive pricing structure, so they'll have to do a complete reset and decide what's best for the business. And that probably includes an overview of the distribution channel and the market channel itself. There are some pretty smart people there, so I'm sure they'll get a hold on it. Correct the ship for 27, being a public company that needs certainly an attention to detail. Thank you.

KS: Thank you. Pentair acknowledged losing aftermarket share on pool equipment installed 10 or 15 years ago, citing challenges for like-for-like replacement and dealer engagement. In your view, why has Pentair underperformed its peers, what would it take for it to regain share, and on what timeline? Thank you.

GD: Yeah, I think obviously competition is quite healthy and competitors study the market, study the equipment side and certainly come up with a viable game plan to get more market share and possibly along the road when times were good in the market. Companies tend to increase their pricing to get more margin. Sometimes that doesn't work

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when things slow down and you have to do a product reset or a segment reset. So that probably is one of the contributing factors to business decline. I think also the economy itself, the pool build itself is down across the markets for certain reasons that people probably already are aware of. And having said that, the equipment side would also decline because of the demand side. So, I think... sorry, did I get everything in, sort of?

KS: It sounds like it's a combination of too much price. The company took too much price over the past couple years, combined with pressures from macro. What about issues with innovation or dealer engagement? Do you think Pentair took their eye off the ball? What are your thoughts?

GD: Well, technically, I think they have certain products, especially the pump side that are still the market leader. Perhaps some of the auxiliary equipment needs some improvement, but the market itself depends on the trust level between the manufacturers and their dealer networks and the customer base. So I would say that in my opinion, they probably need some innovative technology reviews in place from, not the pump side as mentioned, but the other products and also, as I mentioned previously, maybe an overview of their dealer network and maybe an understanding of how to get more market share, but what the gaps are, maybe that program needs to be put in place.

KS: Thank you. Pentair acknowledged that assumptions with its 80-20 strategy execution disrupted relationships with smaller buying groups and independent dealers, causing some aftermarket share loss. What are your thoughts? Did missteps in its 80-20 implementation push independent dealers towards competitors like Hayward and Fluidra? And how quickly can dealer support and product innovation win that business back?

GD: Yeah, well, every manufacturing company with a sales network tries to come up with new ideas, new ways of getting more market share. The 80-20 plan is not new to Pentair. Several other large manufacturers use this approach and sometimes it works, sometimes it doesn't. Again, if you're really aggressive with that approach and you take it to market, sometimes a real thorough understanding and discussion with your sales channels are needed on why this is being implemented, not just being told, "Okay, this is the new program, this is what we're going to do, you have to buy into it." I think it's a 2-way street working with distribution networks. They have to feel part of the win as well. Sometimes companies miss that; they don't see it till the new program is in the market and sometimes they need to quickly fix it. So perhaps that happened. While I was there, certain markets were up, certain markets were stagnant; trying to do everything the same way sometimes is difficult. That's my opinion on things.

KS: Thank you. Pentair targets a 6 to 18 month window to regain lost aftermarket share, relying on enhanced field support, dealer engagement and iterative product innovation. Can dealer support and innovation restore aftermarket share within 6 to 18 months? What are your thoughts? Thanks.

GD: I guess. Depending on the dealer network, I would say your A players can do that. Possibly your B and C accounts might struggle with it. So, again, it's really important for the manufacturer to take that program and explain it thoroughly to your complete network and explain why it's required, why it's needed, and what the benefits will be for the dealer network. And you'll quickly see the buy-in in perhaps 6 or 12 or 18 months. You might see some positive actions, or you see the negative actions, then maybe it's time to react to that and implement something new.

KS: Thank you. If dealers demand higher rebate tiers or margin concessions to switch back to Pentair, will that compress its pool segment's return on sales? How amenable will Pentair be to offering incentives and rebates to gain that share back, in your view?

GD: Rebates... I think that program has pluses and negatives as well. Can it work? Possibly. Another program that could be tied to it is a trade-in program... a competitive product trade-in program could align with a rebate program. Again, the top distribution partners will probably do well at it. The middle and bottom portion of your distribution program might have some issues with it. In my opinion, I'm not a big fan of rebates. I'd rather look at other programs

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that might have a better impact on the bottom line.

KS: Thank you. And when you say the top distribution partners, are you referring to companies like Pool Corporation and Heritage / Home Depot? And who might the bottom tiers represent? Would that be the larger pool builders or PE consolidators?

GD: Right. Yes, exactly. That's what I was referring to.

KS: Thank you. Pool Corp says US pool permits were down low single digits year to date, with new construction remaining muted and 2026 new pool units expected to be flat to slightly down. How would continued weakness in new pool construction affect manufacturer and distributor economics? Thank you.

GD: Yeah, it wouldn't be good. Obviously, the market is dependent, the success is dependent on new builds. Retrofits are out there, that's a lower margin business, but new builds are where companies want to make the most profit and cash in when they can. If that market drops, that has an effect on all sorts of companies that interact... not only the manufacturers, but the pool builders, the installers, the engineering groups, the service people. So, it certainly wouldn't be a good thing, although it has happened in the market.

KS: You indicated that retrofits are out there, but it's a lower margin business. What's the margin differential between new build equipment versus aftermarket products? Is it a substantial spread?

GD: It could be. It varies. I mean, one of the ways into an opportunity is if you don't get it, if you don't win that initial order, then you're certainly trying to target the replacement business and, depending on how aggressive you want to be, it could be getting a product in to replace a competitor at a very low margin to get your foot in that door, let's say, or into that opportunity. So it could swing, and most of the time, like the manufacturers I've worked for, it's been on a case-by-case basis. There really is no program in place for that. When it surfaces, that's when a decision is made.

KS: Thank you. If new pool construction remains weak, how might equipment manufacturers and distributors adapt their business models? Could they shift towards more recurring revenue through service, maintenance, or subscription offerings?

GD: That's possible, although there's only so much equipment out there. The service intervals aren't as frequent to be able to make that particular margin up that's lost. But, you know, there could be other ways to look at it. With the pool market, maybe some of the equipment could be shifted towards other industries and into their water treatment side or something like that to try and make up for that loss in the pool side.

KS: Thank you. Pentair targets 6 to 18 months aftermarket recovery and a 14.5% pool sales rebound in 2027 by leveraging its 10 to 15 year legacy installed base alongside deeper engagement and customer driven innovation. If new pool construction remains weak, how much can aftermarket demand offset it and which OEM: Fluidra, Hayward or Pentair are best positioned to gain share in the aftermarket? Thank you.

GD: I mean, that's a challenging question to answer. My personal opinion is, I'm not convinced the 27 market will bounce back as quickly as some companies are predicting. I think there's still economic issues that are out there that are going to prevent the spend, the opening of wallet on these projects. With aftermarket, you need the initial installation to be successful with aftermarket. So I think that ties into the fact that, in my opinion, 27 might not rebound the way the predictions are being discussed in the financial sectors.

KS: Thank you. Let's talk about private label. After years of multi-year price hikes, Pentair is moderating pool price increases to 3% to 5% for 2027. Given this, could higher prices accelerate private label demand? And can innovation and dealer relationships defend share against private label?

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GD: Yeah, I think private label... it hasn't been the market itself for private label hasn't been opened completely yet, I think. In the past, looking at that private label market, the tendency is the equipment manufactured isn't as good technically as a labeled product, but the price tag on that equipment would be quite a bit lower. So, the companies that are involved in buying the equipment or distributing the equipment have to look at the ROI. If you buy a lower priced product and you need to replace it after a certain amount of time and you buy a higher priced product which has a longer life cycle, is it worth switching to that? Only the market can tell you that. But I think being involved in some of those discussions the last 10 years, I haven't seen the big push yet. I expect it's coming for private label.

KS: Thank you. If private-label expands, how effectively can OEMs defend share using innovation, bundling, or dealer support?

GD: Right. Yeah, I mean, that's pretty obvious that you would need to do that. And the manufacturers will have no choice but to use more than one of the sales advantages you mentioned. And I think in my opinion, getting a customer to completely buy everything from you, then you can sell a service package and you can sell an aftermarket package. I think that's what I would do to offset private label because private label will come into the country. As I said, technically, there might be some challenges with the equipment and then who's going to support it properly if it's from offshore somewhere, where labor is quite low to manufacture those products. So there are the pluses and minuses that you need to not only argue in the marketplace, but also back up in the marketplace.

KS: Would it surprise you to see OEMs produce their own private label brand and or provide lower tiers to compete better with private label offerings?

GD: Right. Yeah. So, that's been done in the past where you have an upper tier product, you then make or manufacture a lower tier product, but you want to keep that product out of certain markets where you're making a lot of margin. And how do you do that if that product's... let's say on your website or it's being promoted by your distribution network? It's a little bit challenging to do that. Of course, that lower tier product won't have all the features and benefits of the higher price product, but perhaps it could work in certain applications. So, I think I'm pretty sure that most manufacturers have looked at this already and some have a game plan on what to do moving forward, some don't, but I think, in my opinion, it'll surface and it'll have to be addressed in the markets.

KS: Thank you. Pentair projects a 14.5% pool segment sales rebound following a 12.5% increase this year as distributor inventory levels normalize following the 2026 destocking reset. How realistic is management's 2027 recovery roadmap and what conditions are needed to achieve that rebound?

GD: I mean, they believe it's possible. So, they have to probably, obviously move it into the market and make it work with their distribution network. As we always say, anything's possible. But, KS: Hmm GD: You just have to look at this year moving into next year, not really a positive market across the board for the pool business, also in water treatment, significantly down in some areas. So, how do you predict a win in 27? I mean, I think when you're working for these companies, you have to be positive and come up with a solution or a possible fix to a down year. So I think strategically, is it possible? I don't think so. Maybe they have some proprietary or secret plans that will make it possible. If they do, great on them. So it's probably a long way to come back. But again, as I mentioned earlier, anything's possible.

KS: Thank you. Pentair projects pool segment return on sales to return to the low 30s range in 2027, while reallocating resources towards dealer support, field technical services, and iterative replacement product innovation. Can Pentair restore pool segment margins to 30% plus in 2027 while simultaneously ramping up dealer engagement, field support, and R&D spending? Thank you.

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GD: Yeah, I think if they focus and really their key product is pumps. If they really focus on that pump market, I think they can probably grow that market. Some of the other products they're not as competitive on or competitors have eaten away at that market. Maybe it's a situation where to refocus on what you do well and try and grow that market share.

KS: Let's talk about that some more. Pentair described its pool segment as a Rule of 40 business targeting 30% plus return on sales with 10% growth or 33% margins with 7% growth, while increasing investment in brand building and dealer support. What would it take to return to the Rule of 40 performance with growth and margins totaling at least 40%?

GD: Yeah, might be. And I think from my knowledge, that Rule of 40 is really a benchmark used by and created by software companies, but it applies a baseline for health highlights or premium distribution highlights. So it's... I think there are contributing factors to that program, the macroeconomic trends and historical wholesale distribution structures are a challenge. Is it possible? Again, anything is possible. Is it really going to happen? I, again, have my doubts because that 30%, where does it come from? And what does it affect behind the scenes? So it could be a bit of a challenge. As I said earlier, I think the pool industry, it's really facing a structural recession driven by the high interest rates that are out there, compared to great years like 2021 when the market was flying, it was really profitable. So I think there is a whole bunch of contributing factors that will be very challenging for many companies.

KS: Thank you. Pentair lowered its 2026 outlook to a decline of 4% to 7%, driven by an 18% to 22% drop in its pool segment due to channel destocking, while Flow is expected to grow mid to high single digits and water solutions is expected to remain flat. It also said the newly closed Taco Group acquisition isn't included in this year's guidance. Can Pentair's Flow and water solutions divisions offset pool pressure and expand commercial and industrial exposure?

GD: My opinion, yes. Those 2 business units are maybe undervalued, underperforming, but I think if they get the right team in place, I think those markets can pick up some of the lost margin from the pool side. And if it's targeted properly, the right strategic plans are in place, I think they can accomplish it.

KS: Why do you believe Pentair's Flow and water solution businesses are undervalued and underperforming? And what specifically do they need to do to turn those segments around or to offset the pool segment's pressures?

GD: Yeah, I think they have to restructure those business units and get the right leadership and sales, let's call it sales management teams in place, and really drill down on where they've been successful and why in those markets and push into it further. I think that's what I see from an overview of those business units to bring margin up in the pool side. Again, if they focus on that pump model a little bit better and really drove it, I think they would see increased revenue from that market.

KS: So is it your sense that there are some things that Pentair can control beyond the macro to improve its 3 segments? And if so, what are they?

GD: Yeah, I think, again, it's a drill down program internally and understanding what those BUs need and want to be successful. So, having worked there, there's some really talented people that see this. And I think those type of people have to be pushed into the leadership roles and given the flexibility to change things. Change is not always easy, but I think markets are not what they used to be, but there's still lots of money being spent. Otherwise, competitors wouldn't exist; big manufacturers would be really slumping. So I think there's a time now to correct things and get focused on what needs to be done. And maybe these 80-20 programs and other programs aren't working, and maybe it's time to look at something different.

KS: Thank you. Let's talk about the Taco acquisition. Pentair acquired the Taco Group Holding for $1.4 billion and

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estimates it will add $540 million in projected 2026 revenue with mid-teens revenue growth and 20% plus adjusted EBITDA margins. What do you think of this acquisition and how rapidly will the Taco acquisition expand Pentair's commercial and industrial sales footprint relative to its residential markets?

GD: Yeah, I think my personal opinion is that that was a good buy, sort of good for Pentair also, good for distribution channels. And I think with that program, they can focus in on different industries like data centers and these type of other large spends that are going on. That'll help them tremendously, I think. The integration side is always a challenge when you buy a company and you bring them in to your existing system, network, strategy. It sometimes takes a while to integrate it properly. And if they do it right, I think they'll be very successful with that because it opens new markets for them that they were struggling to get into before the Taco purchase.

KS: Thank you. Pentair said the Taco acquisition will expand its water solutions business, strengthen its plumbing distribution network, and create cross-selling opportunities. With 40 million installed units and 85% of revenue tied to replacement, maintenance, and upgrades, Taco also brings exposure to faster-growing multifamily housing, HVAC, and data centers. How much could data center demand and Taco cross-selling contribute to growth in margins?

GD: Well, data centers are massive projects for companies today. That Taco portfolio lends itself to the cooling part of the data center. So I think there's significant revenue to be made. With that, as well as there's other markets as well, commercial and industrial exposure that they have for hospitals, universities- all that market segment should add up to a healthy revenue for the team. I think timing was great. Timing is everything. Again, the challenge I've seen in the past is integration and how to ramp that business up quickly and capitalize on the opportunities like the data centers and other markets that Taco products are strong in.

KS: Thank you. You indicated that integration is always a challenge. The company says its synergy capture from the Taco acquisition is projected over 2 to 3 years and it targets $30 million in cost synergies via sourcing and scale. What are the key risks in the synergy targets given your comment that integration is always a challenge? How do you see this playing out?

GD: Yeah, well, I think the manufacturing part of the business is easy to identify and it blends in with what Pentair has already at their manufacturing sites. It's the system integration on, you know, the Pentair program on how to sell within a Pentair office or business unit and how you take all that information that Taco has on their customer base integrated into your existing system that you have in place. That sometimes is very challenging and time-consuming and frustrating for people because they see the products are very good, but you still have challenges bringing that product into your pricing system, price it properly, then be able to quote it through different business units. So, you know, I've seen it with Pentair, I've seen it with other companies I've worked for, other brand name manufacturers. It's always a challenge. It's not as easy as people say it is, and you really need a good internal team to take that information from your acquisition and make sure it's implemented properly, and it's easy to find and easy to discuss with your customer base and distribution partners.

KS: Thank you. Let's talk about competition a little bit more. Heritage/Home Depot acquired Aquafinity in commercial aquatics, integrated with JobTread, a construction management platform, launched pro-service rewards, partnered with software provider Skimmer, and expanded to more than 400 locations nationwide. What could Home Depot's ownership of Heritage mean for competition with Pool Corp and OEMs? How do you see this playing out? Thank you.

GD: Yeah, I mean, Home Depot, the commercial aspect of their business where they can sell products out of their storefronts, out of their bricks and mortar storefronts. I think that's... and sometimes, depending on location, that's an easier way to buy a product. You can just drive up, go in the store, go to that aisle they have designated for these products, pick out what you want, go pay for it, then bring it back to site, install it. Some manufacturers struggle with that because they view it as, well, we still want people to order from our offices, then we ship the product. Yeah, we

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have it in stock, but we want this process to take place. So sometimes that eats into the timeline of the user or customer that needs these products. You can do web business, sure. You can pay for, go to a web store that the manufacturer sets up, buy the product, pay for it, have it shipped. Right. But you don't have your hands on it right away. Maybe they have a counter business. If they do, you go into that particular distribution office and they have a counter you can buy stuff from, you get your hands on it right away. But most distributors don't really have that. So, there are 2 sides to it. I think that's important because if somebody needs it, they get it right away if they can go into a store. So I think Home Depot will probably eat into some of that market share from the other manufacturers unless they adapt to a similar business.

KS: How might that affect margins on the OEM side?

GD: Home Depot won't lose any margins. They're in business to make money and they have the storefronts already, so I think the margins will be eroded from companies that have to adapt to those programs and do a similar setup for customers. Otherwise, the Home Depots of the world wouldn't have all these locations, right? They're obviously making margin; they're making money to support all these locations, so they're going to continue with that program.

KS: Thank you. Pool Corp said customer roll-ups are increasing and that larger customers are contributing to gross margin pressure. How might private equity and industry consolidation affect purchasing power, distributor and OEM relationships, pricing, margins, and M&A activity?

GD: What I've seen lately in several companies that I've dealt with for many years, some have been purchased by private equity partners. I think at the end of the day, they view it as: they have money, they're paying what we want for the business. Whatever happens after we leave this business, it's up to them. So, in my opinion, I think that market will grow because the private equity people are also hungry to get into some of these industries and make money. Will they follow the current programs? Probably not. They'll come up with their own type of programs that they feel work properly, or they'll bring in expertise that can steer the bus the right way and contribute to the bottom line and top line portions. So I've seen a shift the last 10 years in the overall market for companies to look at opportunities like this. So I expect it to grow and continue.

KS: So you expect M&A to continue, is that what you're saying?

GD: Right. Yeah. And I also expect consolidation to continue. That... other industries, sometimes there's a big 3 or a big 5. I think that's going to happen at some point in this business and other water businesses because that's how you also grow your market shares through consolidation, and then you can play with the margins and develop a margin program that fits your company's philosophy.

KS: Thank you. Given everything we've discussed, just to recap, what do you see as the top 2 or 3 opportunities and risks facing Pentair in the broader pool space or pool OEM space over the next 3 to 5 years?

GD: Yeah, I mean, obviously this year was a struggle. They're trying to correct that downturn. I think, in my opinion, they have some expertise left in the business unit to be able to possibly turn it around if they focus on the right things, and right things being... Maybe product segmentation, maybe key account programs, with those type of programs, possibly they can come back in maybe in a couple of years. 27, I think, will be still another planning year for them. They'll probably have some successes. Most smart big companies do, but bringing that back to the 5 years ago sales successes will be challenging, especially as I mentioned with the economy and what's going on. So I think it's going to be a bit of a challenge for not only Pentair, but all companies that, you know, are in these types of markets.

KS: Thank you. What are your thoughts on Pentair's management and their ability to execute in the current environment?

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GD: Yeah, I think they still have some strong people in place. Maybe they need to, you know, develop or really review some of the programs in place, but their leadership team... they're smart people, right? They know the market, you know. They know the customers. They might not be product technical experts, but, you know, commercially they know where to go. And, you know, like every company, if it doesn't work, there'll be changes.

KS: Thank you. How long might it take for them to review their organization and or come up with a plan?

GD: Yeah, I think they're doing it right now based on the downturn. Being a public company, you know, and losing market share plus revenue plus stock price, I think the heat is on to correct the ship, get the train back on the tracks and move it forward. So I'm positive they're doing it now quietly, you know, and they'll probably continue to do it quietly, and then maybe hit the market with the new plan and see what that brings them in '27.

KS: All right. Well, thank you. We are out of time. This has been most informative. And as a reminder, there will be a replay and a transcript following this call. Thanks so much and have a wonderful day.

GD: Thank you. Have a great day. Take care. Bye-bye.

DISCLAIMER: The statements or opinions expressed today are those of the Advisor and not Guidepoint, who disclaims all liability for the content provided. The Advisor may not disclose material nonpublic or confidential information or any information that would cause the Advisor to breach any duty or obligations. Guidepoint is not a registered investment advisor and the information provided is not intended to constitute investment advice.

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