Primo Brands Posts 3.3% Comparable Sales Growth, Unveils $300M Buyback

Primo Brands (NYSE:PRMB) grew comparable net sales 3.3% to $1.8 billion in the third quarter, its third consecutive quarter of comparable growth, and paired the result with a new $300 million share repurchase authorization that replaces a program with just $40.8 million left.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) rose 1.6% to $411 million, but the comparable adjusted EBITDA margin slipped 40 basis points to 22.6%. Growth and productivity absorbed freight and oil-related input cost pressures, the company said.

What's driving the growth?

Chairman and CEO Eric Foss credited stronger-than-expected direct delivery performance and broad-based retail strength, including bottled water dollar-share gains.

The arithmetic behind the top line: price and mix contributed 5.9 percentage points to comparable sales growth, while volume subtracted 2.6 points, CFO David Hass said. In plain terms, consumers paid more even as unit volumes shrank.

• Retail case-equivalent volume declined, partly from changes in selling strategies aimed at supporting immediate-consumption offerings.
• Regional spring water and purified water growth accelerated versus the first half.
• Premium brands kept posting double-digit growth.

Direct delivery comparable net sales rose 2.2%, marking four straight quarters of sequential improvement. Foss tied the recovery to better service, customer acquisition and pricing.

The service turnaround is stark. On-time-in-full delivery — orders arriving complete and punctual — climbed above 90% from just over 50% a year earlier. That improvement cut contact center call volumes and supported retention, Foss said. Primo began seasonally adjusting routes and headcount in the fourth quarter and plans contact center and warehouse technology rollouts in 2027.

What did management guide for 2026?

Primo narrowed its 2026 outlook to approximately 3% comparable net sales growth, the midpoint of its prior 2%-4% range. It expects adjusted EBITDA of roughly $1.465 billion — the low end of its previous $1.465 billion-to-$1.515 billion range — reflecting freight costs and growth investments.

Hass said the revised outlook still implies year-over-year adjusted EBITDA growth in the fourth quarter. The company reaffirmed adjusted free cash flow guidance of $790 million to $810 million.

A workforce productivity program underpins that target. It includes route optimization, workforce reductions across routes, warehouses, production and corporate functions, plus a voluntary early retirement program. Expect a one-time charge in the fourth quarter, with most benefits landing in 2027.

For comparability, sales figures exclude the Eastern Canadian operations exited in Q1 2025 and the Office Coffee Services business exited during 2025. Those adjustments set the comparable 2025 sales base at $6.635 billion, Hass said.

What about 2027?

Management sees a path to adjusted EBITDA dollar growth, free cash flow growth and lower net leverage in 2027, with formal guidance — including the expected magnitude of EBITDA growth — coming in February.

Foss pointed to carryover pricing, revenue growth management, premium brand growth, favorable immediate-consumption mix and productivity initiatives. Hass said Primo would lean on distribution gains and existing pricing actions if market conditions hold, while keeping flexibility.

Hedging is already moving. Primo has increased its 2027 diesel hedging to a level broadly in line with 2026 coverage, and it got there earlier. Locked-in prices sit above the 2026 average but below current spot prices, Hass said. The company has also selectively secured virgin PET (the plastic resin used in bottles) supply contracts for 2027 and remains in supplier negotiations.

Foss flagged immediate consumption as a significant opportunity: Primo's share there is about half its share of the overall market. The company wants more distribution in customer-owned coolers and cold vaults, plus placements for its own branded coolers — with much of the push playing out in 2027.

How did cash and returns look?

Third-quarter adjusted free cash flow came in at $274.2 million, down $36.9 million year over year, on higher cash taxes and working capital investments supporting sales growth. Cash flow from operations was $293.6 million.

Net leverage fell to 3.32 times at quarter-end from 3.42 times at the end of Q2, with the company expecting to drop below three times during 2027. Primo repurchased $22 million of shares in the quarter and declared a quarterly dividend of $0.12 per share.

Primo Brands, formed in 2024 from the combination of Primo Water Corporation and BlueTriton Brands, sells brands including Poland Spring, Deer Park, Pure Life, Ice Mountain, Ozarka, Arrowhead and Primo through retail and direct delivery channels.

Pricing is carrying the P&L; 2027 is when the productivity program is supposed to pay for it.