Primo Brands reported higher third-quarter sales and adjusted EBITDA, with growth led by premium brands and regional spring water. Net income from continuing operations rose sharply from a year earlier, while adjusted net income was nearly flat and the adjusted EBITDA margin narrowed.
The company also set expectations for 2026: it now expects sales around the midpoint of its previous guidance range and adjusted EBITDA near the lower end. It announced a new $300 million share-repurchase program as it balances shareholder returns with investment and debt reduction.
Third-quarter results
- Net sales rose 3.1% to $1.82 billion, from $1.77 billion a year earlier. Primo said growth was primarily driven by premium brands and regional spring water.
- Gross margin increased to 30.4% from 29.9%. The company cited revenue growth and lower non-recurring integration costs, partly offset by higher transportation costs.
- Adjusted EBITDA grew 1.6% to $411 million, from $404.5 million. Adjusted EBITDA margin slipped to 22.6% from 22.9%, a decline of 30 basis points.
- Net income from continuing operations was $124.5 million, or 34 cents per diluted share, compared with $40.5 million, or 11 cents, a year earlier.
- On an adjusted basis, net income was $157.1 million, versus $155 million. Adjusted diluted earnings per share were 43 cents, up from 41 cents.
- Selling, general and administrative expenses fell to $316.3 million from $343 million. Primo attributed the decline mainly to lower marketing costs and prior-year amortization expenses that did not recur in the quarter.
Cash flow, debt and shareholder returns
- Operating cash flow from continuing operations was $293.6 million, compared with $283.4 million a year earlier. After $83 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, leaving net debt of $4.8 billion. The company reported a net leverage ratio of 3.32 times.
- Primo paid $43.5 million in cash dividends during the quarter and announced a new $300 million share-repurchase program.
2026 outlook
Primo expects full-year net sales to come in at the midpoint of its previous guidance range and adjusted EBITDA at the lower end. The company said it is working to mitigate cost pressures while continuing to invest for growth and reduce net leverage.
The quarter showed sales and adjusted EBITDA growth, but adjusted EBITDA margin narrowed and adjusted free cash flow declined year over year. The new repurchase program adds another way to return capital to shareholders alongside dividends, while the company says it remains focused on investment and debt reduction.