Bob P. Fishman
Executive Vice President, Chief Financial Officer and Chief Accounting Officer at Pentair
Thank you, John. Please turn to Slide 8, labeled Q2 2022 Pentair Performance. We delivered second quarter sales growth of 13% with core sales increasing 12% with strong price contribution. We were particularly pleased with the topline performance, given the tough comparison to last year. As we indicated last quarter, we expected to see price outpace inflation starting in the second quarter and it played out as anticipated. Consumer Solutions delivered core sales growth of 15%, against the tough comparison, and Industrial & Flow Technologies grew core revenue 7%.
Segment income increased 18%, and return on sales was 19.3%, which represented a 70 basis point increase year-over-year and 210 basis point improvement sequentially. We were pleased to see the strong price contribution more than offset inflation, but many of our businesses continue to face supply chain inefficiencies, and we expect this to impact productivity in the near term. Below the line, net interest and other expense was just under $5 million. Our share count was 165.5 million and the adjusted tax rate was 16%. Adjusted EPS grew 21% to $1.02 and exceeded our guidance for the quarter.
Please turn to Slide 9, labeled Q2 2022 Consumer Solutions Performance. Consumer Solutions delivered another strong quarter, with sales growing 19% and core sales increasing 15%. Segment income grew 18% and price more than offset inflation in the quarter. Pool sales grew 20% in the quarter, and we continue to see solid momentum, as we continue through the '22 Pool season. There is understandably a lot of focus on the Pool industry, given the significant growth over the past two years.
The pandemic changed consumer behaviors early on, and whether it is moving to warmer climates, investing in the overall backyard, or the emergence of new traveling like Airbnb, consumers are using pools more and more. The industry is estimated to be roughly 60% serving the installed base, 20% major remodeling, and 20% new pool construction. New pool permits have historically run 10% of single family starts and have been a little ahead of that lately, but pool dealers remain constrained by labor availability.
Remodeling activity has been strong, but the focus on new pools has kept some of the remodeling activity from occurring leading to healthy backlogs for dealers. Further pool attrition has been lower as pool owners have a renewed interest in maintaining their pools. There are roughly 5.4 million pools installed, and the average age of the installed base is approaching 20 years. The near-term focus for pool is managing the supply chain, keeping up with demand and improving the inventory health of all product categories.
While some categories like heaters, lighting and cleaners have improved inventory positions leading to elevated growth, other categories like variable speed pumps, automation and standardization still have healthy backlogs given the limited availability of chips that has impacted deliveries. We continue to believe in the long-term prospects for the pool industry, and we'll provide further updates when we report third quarter earnings in October, regarding channel inventory levels as the pool season ends in September.
Water Treatment grew sales 19%, which included some contribution from KBI. Residential water treatment continues to be focused on complexity reduction and improving margins. Sales were up mid-single-digits for the residential business with positive contribution from both affiliated dealers and components. Commercial Water Solutions continued to see a healthy recovery in its end markets, resulting in healthy double-digit sales growth once again. The overall industry continued to improve, and KBI has strengthened and created new relationships for the business.
Please turn to Slide 10, labeled Q2 2022 Industrial & Flow Technologies Performance. Industrial & Flow Technologies grew sales 4% in the quarter, with core revenue increasing 7%. Segment income grew 4%, and return on sales was flat at 15.7% as supply chain and plant inefficiencies continued. Residential flow grew sales 6% as demand in its channel remained solid, and backlog return naturally to historic levels as component availability improved. Price has read out quite well so far this year, and capacity constraints in the plant have slowly improved, as labor challenges have been addressed. We expect more normalized seasonality to end the year, but are encouraged as sell-through in the channel remained healthy.
Commercial flow sales were down 6% as the timing of shipments impacted the quarter. Backlog remained healthy, and we expect improvements in the supply chain should result in these delayed shipments occurring in the second half. The business continued to make progress in driving complexity reduction. Industry Solutions saw sales increase 9%. Backlog continued to be strong, and orders were healthy in this longer-cycle business, particularly within the sustainable gas solution business. Although this is a longer cycle business, it was encouraging to see healthy price readout in the quarter.
Please turn to Slide 11, labeled Balance Sheet and Cash Flow. The balance sheet ended the second quarter exceptionally strong with leverage at one times and return on invested capital just under 19%. Cash flow improved sequentially and was impacted some by higher inventory levels, as supply chain inefficiencies continued. This is a combination of opportunistic raw material purchases and products that have been close to being completed, while awaiting final components that have been delayed. Resins, drives, and electronics continue to be the categories impacted by availability challenges. We expect inventory levels to come down through the second half.
During the quarter, we completed our financing for the pending Manitowoc Ice acquisition. Given the rise in interest rates that occurred, since we announced the transaction in March, we ended up with 75% of the debt variable to help mitigate some of the higher interest expense that will occur versus our original assumptions and to allow us to pay down the variable debt as free cash flow is generated. We repurchased $50 million of shares in the quarter. Our primary focus for the remainder of the year will be on debt reduction, upon the closing of the Manitowoc Ice acquisition.
Please turn to Slide 12, labeled Q3 and Full Year 2022 Pentair Outlook. For the third quarter, we are introducing adjusted EPS guidance of $0.93 to $0.95, which represents a year-over-year increase of 4% to 7%. We expect total sales to grow 3% to 5% against the tough comparison as we expect seasonality for the business and channel inventory levels begin to normalize. We expect segment income to increase 5% to 7% with corporate expense coming in around $20 million, net interest expense of $6 million to $7 million, and adjusted tax rate of 16% and a share count of 165 million to 166 million.
For the full year, we are adjusting our topline guidance to a range of 8% to 10% increase related primarily to a 1% higher FX headwinds than previously forecasted. We expect segment income to increase 9% to 11%, as we expect price continue to exceed inflation in the back half of the year, offset by manufacturing inefficiencies in the near term, given ongoing component and labor availability. We expect adjusted EPS in a range of $3.70 to $3.75, or an increase of 9% to 10% for the year.
We have reduced the high-end of our previous guide by $0.05 to reflect FX and interest headwinds. Below the line, we expect corporate expense to be around $80 million, net interest expense of $21 million to $23 million, as interest rates have increased, and adjusted tax rate of approximately 16%, and shares to be around 165 million to 166 million. We continue to target free cash flow to approximate net income. We are focused on bringing down inventory levels despite ongoing supply chain inefficiencies.
Our third quarter and full-year guidance does not include the impact of Manitowoc Ice, which we expect to close later this week. With the balance of 2022, we would expect the acquisition to be neutral to earnings. We had previously communicated that we expect $0.25 of accretion in 2023. However, we now expect about a $0.15 headwind from higher interest expense as a result of rates rising since we announced the transaction in March, and we would now expect approximately $0.10 accretion in 2023. We continue to target $0.40 accretion by 2025.
I would now like to turn the call over to Jamie for Q&A, after which John will have a few closing remarks. Jamie, please open the line for questions. Thank you.
