Primo Brands (NYSE:PRMB) reported second-quarter comparable net sales growth of 4.2% to $1.8 billion, supported by broad-based retail gains and a faster-than-expected return to growth in its direct-delivery business.
Adjusted EBITDA rose 5% from the prior year to $385 million, while comparable adjusted EBITDA margin increased 10 basis points to 21.4%. Chief Executive Officer Eric Foss said the company’s improving customer experience, stronger retail execution and operational productivity helped drive a second consecutive quarter of year-over-year growth.
Sales growth broadens across retail and direct delivery
Comparable sales growth reflected a 4.3% contribution from price and mix, partially offset by a 0.1% volume decline, Chief Financial Officer David Hass said. On a year-to-date basis in retail, Foss said the company has seen an approximately 40/60 split between volume and price, respectively.
Retail growth was broad-based across channels, including mass, grocery and away-from-home, according to Hass. Regional spring-water sales rose 4.1%, purified-water sales increased 1.9%, and premium brands grew 30.5%.
Primo’s premium portfolio, including Saratoga and Mountain Valley, continued to gain category dollar and volume share. Foss said Saratoga grew faster than Mountain Valley during the quarter, as Mountain Valley experienced some product-supply disruption during the startup of a new production line.
The company also cited growth in club and away-from-home channels. Foss said club sales increased by the mid-single digits during both the quarter and first half, while away-from-home sales grew at a high-single-digit rate, aided by expanded distribution and premium-brand performance.
Direct-delivery comparable net sales increased 0.4%, a 340-basis-point sequential improvement from the first quarter and slightly above the company’s breakeven expectation. The segment’s sales growth was driven by pricing and mix despite lower volume tied to a smaller customer base.
Direct-delivery recovery advances
Foss said direct delivery returned to growth one quarter earlier than expected as the company improved service levels and addressed customer-experience issues following integration-related disruptions.
New customer additions remained strong, while reduced historical incentives have improved new-customer quality and narrowed the revenue gap between newer and more tenured customers, he said. Customer quits and contact-center call volumes declined sequentially, with call volumes falling below pre-integration levels.
On-time-and-full delivery performance improved month by month through June and reached the mid-90% range despite peak-season demand. Primo has also worked to simplify invoices, broaden payment choices, strengthen credit processes and improve invoice timing for many residential customers. Its “Solve by Sundown” initiative has focused on faster resolution of customer concerns.
Foss said the company saw stronger direct-delivery monthly performance in May and June. He added that supply-chain disruption in the segment is now “fully behind us,” though he said the recovery in direct-delivery volume remains ahead.
The company is piloting a warehouse-management system, although Foss said it is too early to identify a meaningful contribution from the initiative. Management also plans continued investment in contact-center capabilities, technology, artificial intelligence, marketing and brand building.
Leadership changes and cost management
Primo recently eliminated its chief operating officer role and added a president of customer direct and go-to-market. The company also elevated certain roles, including chief supply chain officer, to report directly to Foss. He said the changes are intended to remove organizational layers, improve decision-making speed and strengthen accountability.
Higher transportation costs, including tighter freight-market conditions and elevated spot rates, partially offset EBITDA growth. Hass said Primo is investing in its private fleet by transitioning or hiring drivers for company-owned or leased vehicles, reducing reliance on third-party transportation.
Management said it has several levers to address inflationary pressures, including pricing, productivity initiatives, supply-chain cost measures and financial risk management. Foss said pricing decisions will be assessed selectively by brand, package and channel, with attention to consumer value, competitiveness, costs and retailer economics.
Earlier this year, the company raised prices on its immediate-consumption portfolio, where it historically had a large pricing gap relative to competitors. Foss said Primo remains competitively priced and is still below competitors in most cases.
Guidance raised for sales, EBITDA outlook maintained
Primo raised its 2026 comparable net sales growth forecast to 2% to 4%, up from its prior outlook of 1% to 3%. The company maintained its adjusted EBITDA guidance of $1.465 billion to $1.515 billion. At the midpoint, the forecast implies an adjusted EBITDA margin of 21.8%, flat from the prior year, as the company continues to invest in growth and customer service while managing costs.
Adjusted free cash flow guidance also remained unchanged at $790 million to $810 million. The company generated $227.9 million of operating cash flow in the second quarter, or $266.4 million after adjusting for significant items including merger and integration activity. Adjusted free cash flow was $200.1 million, up $30.4 million from the prior year.
Net leverage improved to 3.42 times at quarter-end from 3.52 times in the first quarter, while liquidity totaled $953 million. Primo repurchased $15.5 million, or 708,000 shares, during the quarter and said $62.8 million remained under its authorized repurchase program at the end of the period. The board also reaffirmed a quarterly dividend of $0.12 per share.
About Primo Brands (NYSE:PRMB)
Primo Brands (NYSE: PRMB) is a consumer packaged beverage company that was established as an independent entity following a corporate spin‐off in 2023. The company specializes in the production, marketing and distribution of a broad portfolio of bottled water products, including purified, mineral and sparkling varieties. Through its focus on quality control and innovation, Primo Brands aims to deliver clean, great-tasting water in formats tailored to both at-home consumption and on-the-go lifestyles.
Its product range spans multi-serve and single-serve bottles, aluminum cans and other eco-friendly packaging solutions.
