Primo Brands tops Q3 profit estimates, in line on sales

Primo Brands (PRMB) topped third-quarter adjusted profit estimates, with adjusted EPS of $0.43 per share against the $0.41 consensus. Net sales of $1.82 billion were in line with the $1.83 billion consensus.

The company authorized a new $300 million share repurchase program, which replaces an existing program with about $41 million of unused capacity.

Here's how the company did:

• Adjusted EPS: $0.43 per share vs. $0.41 a year earlier, and $0.41 expected
• Net sales: $1.82 billion vs. $1.77 billion a year earlier, and $1.83 billion expected
• Adjusted EBITDA: $411.0 million vs. $404.5 million a year earlier
• Net income from continuing operations: $124.5 million, or $0.34 per diluted share, vs. $40.5 million, or $0.11, a year earlier

Net sales rose 3.1% from a year earlier, primarily on premium brands and regional spring water.

Margins and costs

Gross margin was 30.4%, up from 29.9%, helped by revenue growth and lower non-recurring integration-related costs, partly offset by higher transportation costs.

Selling, general and administrative expenses were $316.3 million, down from $343.0 million, mainly on lower marketing costs and lower amortization of definite-lived intangibles.

Adjusted EBITDA margin decreased 30 basis points to 22.6%, from 22.9%.

Eric Foss said the company is focused on “factors within our control to help mitigate macro-cost pressures while continuing to invest for long-term growth.”

Guidance

The company now expects net sales to approximate the midpoint of its previous 2% to 4% growth range for 2026, and adjusted EBITDA at the lower end of its previous range. The comparison period excludes the exited Eastern Canadian operations and exited US Office Coffee Services business.

The 2026 adjusted free cash flow forecast of $790 million to $810 million is unchanged, as is base capital expenditure at 4% of net sales.

Cash and capital returns

Free cash flow was $210.6 million in the quarter. Adjusted free cash flow was $274.2 million, compared with $311.1 million a year earlier.

Total debt was $5.2 billion and unrestricted cash was $477.2 million as of Sept. 30, leaving net debt of $4.8 billion and a net leverage ratio of 3.32x.

Cash dividends paid were $43.5 million and share repurchases were $22.1 million in the quarter.

After the quarter, the board declared a dividend of $0.12 per share, payable Dec. 4 to holders of record at the close of business on Nov. 24.

The new $300 million repurchase program allows purchases in open market transactions, block trades, structured programs, privately negotiated transactions and Rule 10b5-1 plans. It does not obligate the company to buy any particular amount and may be modified, suspended or terminated at any time.