BOB P. FISHMAN
Executive Vice President, Chief Financial Officer and Chief Accounting Officer at Pentair
Thank you, John. Please turn to slide six labeled Q3 2021 Pentair Performance. Third quarter sales grew 21%, with core sales increasing 18%. Consumer Solutions grew core sales 26%, and Industrial & Flow Technologies delivered core sales growth of 8%. Segment income was up 28% and return on sales expanded 90 basis points to 18.5%. Adjusted EPS increased 27% to $0.89. Inflation continues to be a significant headwind, but we saw price nearly offset it in the third quarter. Corporate expense was $17 million in the quarter, and our tax rate was 16% in the quarter. Overall, the third quarter was another solid performance across the enterprise as our teams continue to deliver in the face of material shortages, logistical challenges and inflation. Please turn to slide seven labeled Q3 2021 Consumer Solutions Performance. Consumer Solutions sales growth was 30% as both businesses continue to perform at record levels. Segment income increased 27%, while return on sales contracted as price did not fully keep up with the significant inflation headwind. While we have implemented additional price increases, our record backlogs and strong double-digit growth create a lag from when the price -- new prices read out.
We believe this creates a tailwind on price entering next year, but inflation does not appear to be moderating. Pool experienced sales growth of 32% in the quarter and was up 5% sequentially. Demand in the industry remains strong even as the full fiscal year ends and activity begins to moderate. In fact, dealers are booked well into the third quarter of next year, which we anticipate will result in another strong pool season next year. Favorable mortgage rates, continued increases in home equity and the ongoing trend of suburban migration are all contributing to robust demand for the industry. We continue to see strong demand for our variable speed pumps as new efficiency regulations drive transition from single-speed pumps. The majority of our mix has shifted to variable speed. 2021 has been a good year for new products, including our IntelliBrite HD light and higher energy-efficient tiers. We expect next year to be another strong year, including advancements in filtration and continued expansion of connected products. Demand for new pools remain strong with many builders reporting backlogs into the latter half of next year. Our record backlog and favorable demographic trends give us increased confidence and momentum as we look to next year. Water treatment delivered 28% sales growth as residential demand remained robust and commercial showed strong signs of post-pandemic recovery.
We saw our direct-to-consumer business improving leads and closings in several new markets, and we continue to evolve our business model. We've made great progress in rebranding the business and are also building out our service capabilities. The commercial recovery continued and the integration of KBI is going well. We had a total water management win in the quarter, that was a great example of taking a product sale and adding installation and services with an existing KBI customer. While restaurant foot traffic is still not back to 2019 levels, average ticket prices are up and the result is continued improvement in orders and backlog for what has historically been a shorter cycle business. While Consumer Solutions has felt the biggest impact from inflation and material shortages in the short-term, we have successfully implemented multiple price increases that are yet to fully read out and strong backlog levels point to anticipated continued growth for the segment. Please turn to slide eight, labeled Q3 2021 Industrial & Flow Technologies Performance. Industrial & Flow Technologies increased sales 8% in the quarter, while segment income grew 23% and return on sales expanded 180 basis points to 14.8%. Residential flow grew at a double-digit rate for the fourth consecutive quarter. This growth was accomplished even in the face of supply chain constraints that are not showing signs of mitigating.
Our customers have continued to experience strong sell-through, which gives us confidence that we will continue to grow. Price is also beginning to read out further and should be a tailwind entering next year. Commercial flow increased sales 6% in the quarter. The focus in commercial flow continues to be on complexity reduction, better price realization and building out the aftermarket business, given the large installed base. Industrial filtration delivered 8% sales growth, led once again by recovery in the shorter cycle business of food and beverage. We continue to see strong orders, and our sustainable gas business had strong backlog growth and a growing order funnel where we experienced an improvement in our win rate. IFT is building momentum on return on sales expansion and our transformation initiatives, coupled with price realization improving, we believe, should drive more improvement going forward. Please turn to slide nine, labeled Balance Sheet and Cash Flow. Free cash flow continued to be a great story as we have generated over $500 million year-to-date. We have returned $200 million to shareholders through dividends and share repurchase during 2021. The balance sheet ended the quarter exceptionally strong with leverage remaining under 1 times. Return on invested capital ended the quarter at 19%, a number we are particularly proud of.
We had a higher-than-average amount of cash on hand at the end of the quarter as we awaited the completion of the Pleatco acquisition, which occurred last week. Our balance sheet gives us a great deal of flexibility to invest in our strategic growth initiatives, both organically and through strategic acquisitions like KBI and Pleatco. Please turn to slide 10 labeled Q4 and Full Year 2021 Pentair Outlook. We are initiating fourth quarter and updating our full year 2021 guidance. For the fourth quarter, we expect sales to grow 15% to 19%; segment income to grow 16% to 24%; and adjusted EPS to grow 16% to 24% to a range of $0.81 to $0.87. Our forecast reflects ongoing material availability headwinds and higher inflation. For the full year, we expect sales to grow 22% to 23%; segment income to increase 32% to 34%; and adjusted EPS to grow 34% to 36% to a range of $3.34 to $3.40. In addition to supply chain and logistics challenges, we would also remind investors that the fourth quarter historically incurs a seasonal slowdown for many of our residential businesses as the weather turns less favorable for outdoor activity in addition to fewer workdays around the holidays. Below the operating line, we continue to expect corporate expense to be around $80 million. We now expect net interest to be around $15 million, and our tax rate assumption remains around 16%. We anticipate the share count to be around 167.5 million, both for the quarter and the full year. Capital expenditures are expected to be around $60 million, while depreciation and amortization is anticipated to be about $80 million. We continue to target free cash flow to be greater than net income.
I would now like to turn the call over to Stephanie for Q&A, after which John will have a few closing remarks. Stephanie, please open the line for questions.