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Primo Brands Corp (PRMB)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered volume-led growth with Net Sales of $1.61B, Adjusted EBITDA of $341.5M (21.2% margin), and Adjusted EPS of $0.29; management reaffirmed full-year 2025 guidance for Net Sales growth (3–5%), Adjusted EBITDA ($1.600–$1.628B) and Adjusted Free Cash Flow ($790–$810M) .
  • Against S&P Global consensus, PRMB posted a small revenue miss (estimate $1.620B vs actual $1.614B*) and a meaningful Adjusted EPS beat ($0.23e vs $0.29*); EBITDA was near consensus ($327.3M e vs $323.9M*), while company-reported Adjusted EBITDA was higher at $341.5M (non-GAAP) .
  • Premium brands momentum was a standout: Mountain Valley +41.8% and Saratoga +68.6% YoY, combining for 49% net sales growth; household penetration rose 110 bps, and retail dollar share expanded by 30 bps .
  • Integration synergies captured ~$20M in Q1, with the team exiting March stronger; tornado-related supply chain disruption (Hawkins, TX) occurred post-quarter and is expected to be fully offset by business interruption insurance on EBITDA .

Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

  • “Comparable adjusted EBITDA…rose to $342M…margin of 21.2%, a significant improvement of 170 bps” driven by volume growth and cost optimization; Q1 synergy capture contributed ~$20M .
  • Premium brand outperformance: “Mountain Valley grew just under 42%…passed $50M in Q1 net sales” and “Saratoga grew 68.6%…passed $20M” with new Walmart PET distribution and high-profile activations .
  • Market share and penetration gains: “retail household penetration increased 110 bps YoY,” and PRMB “was the only large branded beverage company that grew share” (+30 bps in retail scans) .

What Went Wrong

  • Price/mix was “barely up” (+0.2%) as PRMB leaned into value to protect share amid a challenged consumer; growth was predominantly volume-driven .
  • Elevated integration and financing costs weighed on GAAP EPS ($0.09 diluted from continuing ops) and cash conversion; integration-related cash and debt restructuring costs reduced Free Cash Flow in the quarter .
  • Post-quarter tornado damage at Hawkins, TX and tariff pressures on the ~1% sales Dispenser business created near-term operational noise; management expects service normalization by late Q2 and minimal EBITDA impact .

Financial Results

Consolidated Performance vs Prior Periods and Estimates

MetricQ1 2024Q4 2024Q1 2025S&P Consensus (Q1 2025)
Net Sales ($USD Millions)$1,135.8 $1,397.2 $1,613.7 $1,619.6*
Gross Profit ($USD Millions)$345.5 $430.1 $521.0 —
Gross Margin (%)—30.8% 32.3% —
Adjusted EBITDA ($USD Millions)$217.7 $254.8 $341.5 —
Adjusted EBITDA Margin (%)19.2% 18.2% 21.2% —
GAAP Diluted EPS – Continuing Ops ($)$0.15 $(0.49) $0.09 —
Adjusted Diluted EPS ($)$0.22 $0.13 $0.29 $0.23*
Cash from Operations ($USD Millions)$6.0 $93.7 $38.8 —
Free Cash Flow ($USD Millions)$(38.7) $36.1 $(30.7) —
Adjusted Free Cash Flow ($USD Millions)$(23.6) $171.8 $54.7 —

Values retrieved from S&P Global.*

S&P Global Consensus vs Company-Reported Actuals (Q1 2025)

MetricEstimateActual (SPGI)Company-Reported Actual
Revenue ($USD Millions)$1,619.6*$1,613.7*$1,613.7
EPS Normalized ($)$0.234*$0.29*Adjusted Diluted EPS $0.29
EBITDA ($USD Millions)$327.3*$323.9*Adjusted EBITDA $341.5

Values retrieved from S&P Global.*
Note: Company “Adjusted EBITDA” is a non-GAAP measure including specified adjustments and may differ from SPGI’s EBITDA methodology .

KPIs and Operating Highlights

KPIQ1 2025Reference
Retail household penetration change+110 bps YoY
Retail dollar share change+30 bps YoY; only large branded player growing share
Premium brands growthMountain Valley +41.8%; Saratoga +68.6%; combined +49% net sales
Points of distribution~3M base; adding >5% incremental in Apr–Aug resets
Exchange locations~26,500 retail locations
Refill stations~23,500 self-serve stations
Liquidity~$449.7M unrestricted cash; ~$611M revolver availability; total ~$1.1B
Debt (gross)~$5.2B
Quarterly dividend$0.10 per share (announced May 1, payable Jun 17)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Comparable Net Sales Growth (%)FY 20253% – 5% 3% – 5% Maintained
Adjusted EBITDA ($USD Billions)FY 2025$1.600 – $1.628 $1.600 – $1.628 Maintained
Adjusted Free Cash Flow ($USD Millions)FY 2025$790 – $810 $790 – $810 Maintained
Capex (base)FY 2025~4% of comparable Net Sales ~4% of comparable Net Sales Maintained
Integration CapexFY 2025~$200M ~$200M (ramps sequentially) Maintained
DividendFY 2025Increased to $0.10 per quarter Declared $0.10 on May 1, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Current Period (Q1 2025)Trend
Integration & SynergiesIncreased total synergy target to $300M by 2026; $200M in 2025 ~$20M captured in Q1; exiting March stronger; on track for $200M in 2025 Improving execution
Price/Mix vs VolumeOrganic growth largely volume-led Volume +2.8% vs price/mix +0.2%; value focus to protect share Volume-driven; pricing harmonization later in year
Premium BrandsPremium momentum referenced Mountain Valley +41.8%; Saratoga +68.6%; Walmart PET launches; brand activations Accelerating
Supply Chain & OpsStrong gross margin from efficiency Tornado at Hawkins (post-quarter); quick restart; fully insured for BI Temporary disruption; mitigated
Tariffs/MacroNoted macro uncertainty Tariff exposure minimal (~1% of sales, Dispensers); promotional mitigation Manageable
Liquidity & DeleveragingTarget leverage reduction (Investor Day) ~$1.1B total liquidity; plan to remove ~½ turn of leverage over time Stable liquidity; deleveraging intent
Portfolio/ChannelsBroad retail and DTC presence Cross-selling in Direct Delivery; exchange and refill density benefits Expanding distribution

Management Commentary

  • “Comparable adjusted EBITDA…$342M…margin of 21.2%…170 bps over prior year” highlighting synergies and cost optimization .
  • “Mountain Valley grew just under 42%…passed $50M…Saratoga grew 68.6%…passed $20M…brand-new distribution in Walmart…Saratoga may very well be the hottest brand in America right now” .
  • “Our Dispenser business…approximately 1% of…net sales…negligible impact on adjusted EBITDA and free cash flow” with tariffs managed via promotions .
  • “We are maintaining…Adjusted Free Cash Flow between $790M and $810M for 2025” and base Capex ~4% of sales plus integration Capex ramping .

Q&A Highlights

  • Premium brands strategy: detailed growth, new Walmart PET distribution, and high-profile activations; strategy to expand away-from-home channels (restaurants, nightclubs) .
  • EPS/EBITDA beat drivers: ~$20M synergies in Q1 and base business efficiencies from integrating overlapping infrastructures .
  • Price/mix clarifications: deliberate restraint on pricing to preserve value and share; expect harmonization in last-mile pricing later in the year .
  • Cadence and guidance: Q2/Q3 are larger seasonal quarters; maintaining annual guide despite macro and tariff uncertainty .
  • HOD/Direct Delivery retention: KPIs trending positive (OTIF up; retention up a few bps) amid branch consolidations; expanded portfolio access in DTC .
  • Tornado impact: EBITDA neutral via business interruption insurance; net sales largely timing-related with product reallocated regionally .

Estimates Context

  • Revenue: slight miss vs consensus ($1,619.6M e vs $1,613.7M actual); Adjusted EPS: beat ($0.234 e vs $0.29 actual); EBITDA near consensus ($327.3M e vs $323.9M actual*), while company-reported Adjusted EBITDA was $341.5M (non-GAAP) .
  • Implication: Street likely raises EPS run-rate and Adjusted EBITDA margin expectations given stronger cost capture, while revenue trajectories may hinge on distribution adds and pricing harmonization through H2 .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Margin story intact: Adjusted EBITDA margin expanded 200 bps YoY to 21.2%, driven by early synergy capture and disciplined cost control .
  • Premium brands are incremental growth engines with clear distribution catalysts (Walmart PET) and cultural tailwinds, supporting mix quality without price reliance .
  • Pricing discipline preserved share in a challenged consumer backdrop; expect price harmonization in last-mile as H2 progresses, aiding mix and profitability .
  • Integration execution is accelerating; ~$20M synergies in Q1 with a strong March exit run-rate, underpinning confidence in $200M 2025 target and $300M by 2026 .
  • Transient ops headwinds (Hawkins tornado, dispenser tariffs) appear manageable and largely EBITDA-neutral via insurance and promotional levers .
  • Liquidity remains strong (~$1.1B) with intent to delever; dividend at $0.10/quarter provides yield, with opportunistic buybacks executed post-quarter .
  • Near-term trading: Favorable setup around premium brand momentum, H2 price harmonization, and synergy flow-through; watch execution on service normalization and retail resets to sustain volume and margin trajectory .

Additional Q1 2025 Documents Reviewed

  • Q1 2025 8-K Item 2.02 and Exhibit 99.1 Press Release .
  • Q1 2025 Earnings Call Transcript (May 8, 2025) –.
  • Q1 2025 Dividend Press Release (May 1, 2025) .
  • Prior quarter (Q4 2024) results press release for trend analysis –.
  • Subsequent quarter (Q2 2025) results press release (for context on integration cadence post-quarter) –.