Primo Brands (NYSE:PRMB) reported its third consecutive quarter of comparable sales growth, as gains in direct delivery and retail helped offset lower volumes and higher transportation costs. The bottled water company also narrowed its 2026 outlook and announced a new $300 million share repurchase authorization.
Third-quarter net sales were $1.8 billion, up 3.3% on a comparable basis from a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization rose 1.6% to $411 million, although the comparable adjusted EBITDA margin declined 40 basis points to 22.6%.
Chairman and Chief Executive Officer Eric Foss said the results reflected stronger-than-expected direct delivery performance and broad-based retail strength, including bottled water dollar-share gains. He said growth and productivity helped offset freight and oil-related input cost pressures.
Pricing offsets volume declines
Chief Financial Officer David Hass said price and mix contributed 5.9 percentage points to comparable sales growth, while volume reduced growth by 2.6 percentage points. Both retail and direct delivery sales benefited from price and mix despite lower volumes.
Retail case-equivalent volume declined partly because of changes in certain product selling strategies intended to support immediate-consumption offerings, Hass said. Foss said growth accelerated in both regional spring water and purified water compared with the first half of the year, while premium brands continued to post double-digit growth.
Direct delivery comparable net sales rose 2.2%, following four consecutive quarters of sequential improvement in the business. Foss attributed the recovery to improved service, customer acquisition and pricing.
The percentage of direct delivery orders arriving on time and in full rose to more than 90% in the third quarter from just over 50% a year earlier, Foss said. He added that improved service had reduced contact center call volumes and supported customer satisfaction and retention.
With the business stabilized, Primo is working to improve efficiency. The company began seasonally adjusting routes and headcount in the fourth quarter and plans to roll out contact center and warehouse management technology in 2027.
2026 outlook and workforce actions
Primo now expects approximately 3% comparable net sales growth for 2026, the midpoint of its previous 2% to 4% range. It expects adjusted EBITDA of approximately $1.465 billion, at the lower end of its prior $1.465 billion to $1.515 billion range, reflecting freight costs and investments in growth initiatives.
Hass said the revised outlook implies year-over-year adjusted EBITDA growth in the fourth quarter. The company reaffirmed its adjusted free cash flow guidance of $790 million to $810 million, supported in part by expected add-backs associated with a workforce productivity program.
That program includes route optimization, workforce reductions across routes, warehouses, production and corporate functions, and an ongoing voluntary early retirement program. Primo expects a related one-time charge in the fourth quarter, with most benefits realized in 2027.
For comparability, Primo’s sales figures exclude Eastern Canadian operations exited in the first quarter of 2025 and the Office Coffee Services business exited during 2025. Those adjustments put its comparable 2025 sales base at $6.635 billion, Hass said.
Early view of 2027
Management said it sees a path to adjusted EBITDA dollar growth, adjusted free cash flow growth and lower net leverage in 2027. Primo plans to provide formal guidance, including the expected magnitude of EBITDA growth, in February.
Foss cited carryover pricing, revenue growth management, premium brand growth, a favorable mix from immediate consumption and productivity initiatives as factors supporting the outlook. Hass said the company would largely rely on distribution gains and existing pricing actions if market conditions remain where they are, while retaining flexibility to respond to changes.
Primo has increased its 2027 diesel hedging to a level broadly in line with its overall 2026 coverage and reached that position earlier than it did for this year. Hass said locked-in prices are above the company’s 2026 average but below current spot prices. The company also has selectively secured virgin PET supply contracts for 2027 and remains in negotiations with suppliers.
Foss described immediate consumption as a significant opportunity, saying Primo’s share in that segment is about half its share of the overall market. The company is seeking more distribution in customer-owned coolers and cold vaults, as well as placements for its own branded coolers. Foss said much of the initiative would play out in 2027.
Cash flow and shareholder returns
Third-quarter adjusted free cash flow was $274.2 million, down $36.9 million from a year earlier. Hass cited higher cash taxes and working capital investments supporting sales growth. Cash flow from operations was $293.6 million.
Net leverage declined to 3.32 times at quarter-end from 3.42 times at the end of the second quarter. The company expects to reach its target of below three times during 2027.
The new share repurchase authorization replaces the existing program, which had about $40.8 million remaining at quarter-end. Primo repurchased $22 million of shares during the third quarter. Its board also declared a quarterly dividend of $0.12 per share.
About Primo Brands (NYSE:PRMB)
Primo Brands is a North American beverage company focused on bottled water and water-related products and services. Its offerings include spring, purified and mineral water, water dispensers and filtration products, as well as water delivery for homes and businesses.
The company’s portfolio includes brands such as Poland Spring, Deer Park, Pure Life, Ice Mountain, Ozarka, Arrowhead and Primo. Its products are sold through retail channels and delivered directly to consumers and businesses.
Primo Brands was formed in 2024 through the combination of Primo Water Corporation and BlueTriton Brands.
