Primo Brands NYSE: PRMB reported a return to comparable sales growth in the first quarter of 2026, driven by gains in retail channels, premium water brands and improving trends in its direct delivery business, while higher service investments, weather disruptions and transportation costs weighed on profitability.
Executive Chairman and CEO Eric Foss said first-quarter net sales were $1.63 billion, up 1.7% on a comparable basis from the prior year. He said the performance was “broad-based,” supported by both price/mix and volume, and marked “a return to growth for Primo Brands.”
Comparable adjusted EBITDA was $306 million, down 10.4%, with comparable adjusted EBITDA margin declining 260 basis points to 18.8%, according to CFO David Hass. Management attributed the decline primarily to continued investments to improve service levels in direct delivery, incremental costs from winter storms, and higher freight and logistics expenses.
Sales guidance raised, EBITDA range widened
Primo Brands raised its 2026 comparable organic net sales growth guidance to a range of 1% to 3%, up from its previous outlook of flat to 1% growth. Hass said the revised outlook reflects stronger-than-expected first-quarter sales, improved direct delivery trends and continued strength in retail channels.
At the same time, the company widened its adjusted EBITDA guidance range, lowering the bottom end to $1.465 billion while maintaining the high end at $1.515 billion. Foss said the change reflects “recent geopolitical events and the dynamic cost landscape,” particularly volatility tied to oil-related commodities. The revised midpoint implies an adjusted EBITDA margin of 22%, which management said would still represent year-over-year margin expansion.
Hass said the company continues to expect adjusted free cash flow of $790 million to $810 million for the year.
Direct delivery showing sequential improvement
Management highlighted progress in direct delivery, one of the company’s two stated near-term priorities. Foss said customer quits continued to decline, call volume fell and the company’s “Respond and Recover Solve by Sundown” initiative accelerated customer issue resolutions. On Time In Full service levels exceeded 90% in March, he said.
Comparable direct delivery sales declined 3% in the quarter, reflecting lower volume from a smaller customer base and a difficult comparison with the prior year, Hass said. However, he added that sales improved sequentially each month during the quarter, and customer net additions approached breakeven in March.
Hass said Primo now expects direct delivery to move from a 3% decline in the first quarter to closer to breakeven in the second quarter, followed by modest growth in the second half of the year.
Foss said the company is implementing a new warehouse management system, harmonizing data across its enterprise platform, enhancing analytics and redesigning the customer journey from sign-up and delivery through billing and issue resolution. He said the work is centered on “transparency, convenience, and trust.”
Retail and premium brands drive growth
Retail channels were a key driver of first-quarter growth. Hass said retail net sales growth was broad-based across channels, particularly mass, club and away-from-home, and across pack sizes and brands. Foss said the company gained both dollar and volume share in branded bottled water during the quarter.
Premium brands Saratoga and Mountain Valley continued to be notable contributors. Foss said the two brands grew 43% in the first quarter and gained both volume and dollar share. The company is also investing in additional capacity, with Saratoga capacity in Texas becoming operational in May and a new Mountain Valley greenfield facility expected to be completed in mid-summer.
Foss said Primo is planning several brand-building initiatives for the summer, including a campaign around its regional spring water portfolio tied to its Major League Baseball partnership and a limited-edition Pure Life bottle series featuring Toy Story 5 as part of its multi-year partnership with Disney. He also said the company’s regional spring waters became available through Amazon Grocery in April for the first time.
Commodity costs and pricing in focus
Hass outlined the company’s exposure to oil-related commodities, including virgin PET, recycled PET, HDPE, LDPE, diesel and propane. He said Primo uses fixed-price and forward contracts where available and typically maintains coverage extending 12 to 24 months.
Within the company’s delivery fleet, about 40% of trucks run on propane, and Hass said propane markets have been relatively stable. For diesel, he said Primo has “significant hedge coverage” in 2026 and is extending some protection into 2027 through longer-term derivative contracts.
During the question-and-answer session, Hass said the company is “pretty far hedged” on diesel for the year, though a resolution that lowers oil prices could provide some benefit later in the year and create opportunities for 2027. He said resin exposure is managed more through forward-priced vendor contracts.
Foss said Primo is focused near term on productivity and pricing to offset inflationary pressure, rather than changes to delivery fees or fuel surcharges. He said the company has taken pricing actions on immediate consumption products, where consumers tend to be more convenience-oriented, and may look at case-pack pricing later in the year while remaining sensitive to consumer value and elasticity.
Cash flow, debt and shareholder returns
Primo generated $103.8 million in cash flow from operations during the quarter. Excluding significant items, most notably integration and merger activities, cash flow from operations would have been $191.6 million, Hass said. Adjusted free cash flow was $128.6 million, an improvement of $73.9 million from the prior year.
The company ended the quarter with $874 million of liquidity, including cash and unused line of credit availability, and a net leverage ratio of 3.52 times. Hass said Primo refinanced its $3.1 billion term loan on March 31, extending the maturity to 2031 from 2028.
Primo repurchased $29 million of stock, or about 1.5 million shares, during the quarter under its $300 million share repurchase program. Hass also said the board authorized a quarterly dividend of $0.12 per share, annualized at $0.48 per share.
Foss closed the call by saying the company’s fundamentals are strengthening and that management remains “energized by the opportunities ahead” as it works toward sustainable long-term growth.
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.
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