Primo Brands reported higher third-quarter sales and adjusted EBITDA, with growth in premium brands and regional spring water. Net income from continuing operations rose sharply from a year earlier, while adjusted earnings per share edged up. The company also authorized a new $300 million share-repurchase program and narrowed its 2026 outlook: it expects sales near the midpoint of its prior range and adjusted EBITDA near the lower end.
Management said Direct Delivery growth exceeded expectations, retail sales grew broadly and the company gained category dollar share. It also cited ongoing cost pressures, including higher transportation costs.
Third-quarter results
- Net sales rose 3.1% to $1.82 billion, from $1.77 billion a year earlier. The company attributed the increase primarily to premium brands and regional spring water.
- Net income from continuing operations was $124.5 million, or $0.34 per diluted share, compared with $40.5 million, or $0.11 per share, a year earlier.
- Adjusted net income increased to $157.1 million from $155.0 million. Adjusted diluted earnings per share rose to $0.43 from $0.41.
- Adjusted EBITDA grew 1.6% to $411.0 million, from $404.5 million. Its margin slipped to 22.6% from 22.9%, a decline of 30 basis points.
- Gross margin improved to 30.4% from 29.9%. Primo cited revenue growth and lower integration-related costs, partly offset by higher transportation expenses.
- Selling, general and administrative expenses fell to $316.3 million from $343.0 million. The company attributed the decrease mainly to lower marketing costs and prior-year amortization expense that did not recur.
Cash, debt and shareholder returns
- Cash from continuing operating activities was $293.6 million, compared with $283.4 million a year earlier. After $83.0 million of capital expenditures and additions to intangible assets, free cash flow was $210.6 million. Adjusted free cash flow was $274.2 million, down from $311.1 million in the prior-year quarter.
- At September 30, total debt was $5.2 billion and unrestricted cash was $477.2 million, resulting in net debt of $4.8 billion. The company reported a net leverage ratio of 3.32 times.
- Primo paid $43.5 million in dividends during the quarter.
- The new $300 million share-repurchase authorization gives the company another way to return capital to shareholders. The announcement does not say that the full amount has been spent.
2026 outlook and implications
Primo expects 2026 net sales at the midpoint of its previously issued guidance range and adjusted EBITDA at the lower end. The specific guidance ranges were not included in the announcement. Management said it is balancing efforts to offset cost pressures with investment in long-term growth and debt reduction.
The quarter showed stronger reported net income and a modest increase in adjusted earnings, alongside positive sales growth. Adjusted EBITDA margin declined, and adjusted free cash flow was lower than a year earlier. The repurchase authorization adds to the company’s capital-return options while it continues to carry substantial net debt.