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Primo Brands Corp (PRMB)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered adjusted EPS of $0.41, a beat vs S&P Global consensus $0.36*, with adjusted EBITDA margin expanding to 22.9% on $404.5M adjusted EBITDA . Revenue was $1.77B, slightly below consensus $1.77B*, but up sequentially by $36M vs Q2 .
  • Guidance was reset: FY25 comparable net sales now “low single-digit decline,” adjusted EBITDA ~$1.45B (21.8% margin), while adjusted free cash flow was reiterated at $740–$760M .
  • Retail momentum and premium water strength continued (premium net sales +44% YoY), while direct delivery remained a headwind (-6.5% YoY) as unit volumes lag despite service recovery (DSR ≈95%) .
  • Leadership change named Eric Foss Chairman & CEO; management emphasized brand leadership, customer service upgrades, and execution to reaccelerate growth in 2026 .

What Went Well and What Went Wrong

What Went Well

  • Premium brands Mountain Valley and Saratoga net sales rose >44% YoY in Q3, supported by capacity investments and distribution gains; retail net sales grew 2%, with total points of distribution +12% .
  • Adjusted EBITDA margin expanded +180 bps YoY to 22.9% (adjusted EBITDA $404.5M), reflecting synergy capture and operational improvements .
  • Service metrics in direct delivery improved; DSR stabilized near historical levels (~95%), with digital customer acquisition +8.2% YoY, positioning volumes to recover into 2026 .
    Quote: “We are making steady progress towards returning to our growth algorithm and have a clear line of sight to accelerating net sales, profitability gains and increased free cash flows…” .

What Went Wrong

  • Direct delivery comparable net sales declined 6.5% ($47M), including OCS wind-down ($8.2M) and elevated customer credits (+$3.7M), as unit volumes at the customer level lagged recovery .
  • Guidance lowered: FY25 comparable net sales to a low-single-digit decline and adjusted EBITDA to ~$1.45B, driven by the magnitude/timing of direct delivery volume recovery .
  • Purified water within Q3 was -5.2% YoY in net sales on the comparable view, reflecting price/mix and channel dynamics despite strong retail performance and premium gains .

Financial Results

Quarterly Results vs Prior Periods and YoY

MetricQ1 2025Q2 2025Q3 2025YoY Q3 2024 → Q3 2025
Net Sales ($USD Millions)$1,613.7 $1,730.1 $1,766.1 $1,794.6 → $1,766.1
Adjusted EBITDA ($USD Millions)$341.5 $366.7 $404.5 $378.7 → $404.5
Adjusted EBITDA Margin %21.2% 21.2% 22.9% 21.1% → 22.9%
Adjusted Diluted EPS ($)$0.29 $0.36 $0.41 $0.35 → $0.41

Actual vs S&P Global Consensus (Estimates)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions) Actual$1,613.7 $1,730.1 $1,766.1
Revenue ($USD Millions) Consensus$1,619.6*$1,814.8*$1,770.3*
Primary EPS (Adjusted) Actual ($)$0.29 $0.36 $0.41
Primary EPS Consensus Mean ($)$0.234*$0.414*$0.363*

Values with asterisks retrieved from S&P Global.

Segment/Channel Breakdown (Comparable Results, Q3 2025)

Water Type Net Sales ($USD Millions)Q3 2024Q3 2025YoY %
Regional Spring Water$893.1 $885.6 -0.8%
Purified Water$587.9 $557.5 -5.2%
Premium Water$68.0 $98.2 +44.4%
Other Water$37.1 $33.0 -11.1%
Other (non-water)$208.5 $191.8 -8.0%
Total$1,794.6 $1,766.1 -1.6%
Trade Type Net Sales ($USD Millions)Q3 2024Q3 2025YoY %
Direct Delivery$725.5 $678.4 -6.5%
Grocery$343.7 $344.7 +0.3%
Club$290.1 $288.5 -0.6%
Mass$220.7 $216.4 -1.9%
Away From Home$127.7 $134.6 +5.4%
Emerging/Specialty & Other$86.9 $103.5 +19.1%
Total$1,794.6 $1,766.1 -1.6%

KPIs and Balance Sheet/Cash Flow Highlights

KPIQ3 2025
Delivery Service Rate (DSR)~95% (current; exited Q3 ≈93%)
Cash From Operations ($USD Millions)$283.4
Adjusted Free Cash Flow ($USD Millions)$311.1
Liquidity ($USD Millions)~$1,000 (Cash $422.7 + RCF availability $612)
Net Leverage Ratio3.37x
Revolver Availability ($USD Millions)~$612 (undrawn)
Facilities Closed (since merger)49 (16% of footprint)
Share Repurchases$73.2M, ~3.0M shares; ~$177M remaining authorization
Dividend$0.10 per share (declared)
Israel Business DivestitureClosed 10/23/2025; ~$42M net proceeds post-Q3

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Comparable Net Sales GrowthFY 2025+3% to +5% (Q1) → Flat to +1% (Q2) Low single-digit decline (Q3) Lowered (twice)
Adjusted EBITDA ($USD Billions)FY 2025$1.60–$1.628 (Q1) ~$1.50 (Q2) ~$1.45; ~21.8% margin (Q3)
Adjusted Free Cash Flow ($USD Millions)FY 2025$790–$810 (Q1) $740–$760 (Q2) $740–$760 (Q3)
Base CapexFY 2025~4% of comparable net sales (Q1) ~4% of net sales (Q3 slides) Maintained
DividendsFY 2025$0.10/qtr (declared) $0.10/qtr (declared) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Direct Delivery Integration & ServiceQ2: Service dipped below 80% in late May; DSR improved to ~92%; plan to normalize by Sep; customer churn elevated; wave closures + tech transitions (SAP/handhelds) . Q1: net adds stable; retention up a few bps; KPI dashboards (OTIF, NPS) improving .DSR ~95% currently; volumes lag original plan; credits elevated; guidance reset to reflect slower volume recovery .Improving service, slower volume snap-back; costs to unwind in 2026.
Premium Brands (Mountain Valley, Saratoga)Q1: +49% net sales; Walmart PET 6-pack launch; events/viral exposure . Q2: +44.2% net sales; capacity investments; food service push .+44% net sales; new Hot Springs facility (>$66M) to unlock supply by 1H26; continued distribution gains .Strong, capacity-constrained; multi-year runway.
Retail Distribution/MixQ1: +5% points of distribution planned; retail share +30 bps; scans outperformed . Q2: July scans strengthened; five weeks of share growth; 10%+ points of distribution .Retail net sales +2%; total points of distribution +12%; continued share gains .Positive momentum.
Tariffs/DispenserQ1: Dispenser 1% of sales; minimal EBITDA impact; promotions to offset . Q2: tariffs caused dispenser sell-in softness ($10M) .Taking pricing and harmonized terms for club dispensers; expectation of a more favorable tariff environment entering 2026 .Headwind moderating into 2026.
Hawkins Tornado ImpactQ1: BI insurance expected; repair cost ~$50M largely covered . Q2: ~$26M net sales impact; facility restarted .Facility fully operational; residual weather/timing impacts cited; cash proceeds from insurance .Largely resolved.
Synergies/Network OptimizationQ1: ~$20M captured; target $200M FY25; $300M by YE26; closures, SG&A, procurement . Q2: ~ $60M YTD; annualized ~$140M; more waves ahead .On track for $200M (2025) and $300M (2026); 49 facilities closed .On plan; P&L benefits muted by stabilization costs near-term.
Leadership/Strategy—Eric Foss appointed Chairman & CEO; focus on growth, service, culture, financial delivery .Potential execution uplift; catalyst for narrative.

Management Commentary

  • “Our premium water portfolio…Combined, premium net sales increased more than 44% year over year.” – CFO David Hass .
  • “With the ongoing recovery in our direct delivery business…we now expect a net sales decline in the low single digits versus the prior year…adjusted EBITDA guidance approximately $1,450,000,000 or 21.8% margin…we are reiterating adjusted free cash flow $740,000,000 to $760,000,000.” – CFO David Hass .
  • “It’s great to be here…Our purpose…is to hydrate a healthy America each and every day…We have multiple value creation levers, multiple growth vectors.” – CEO Eric Foss .
  • “We have now closed 49 facilities or 16% of our pre-merger footprint, while optimizing headcount…We believe that we are in early innings of consolidating our position as a durable branded category leader.” – CFO David Hass .

Q&A Highlights

  • Leadership change: Board viewed timing as appropriate; long-term thesis intact; disruption concentrated in direct delivery last-mile; plan to raise game in service .
  • Direct delivery trajectory: Guidance implies continued decline near term; exit rate improving; costs to stabilize routes and service to unwind as productivity returns; margins to expand thereafter .
  • Customer volumes/churn: Peak disruption in July; monthly net adds targeted positive by year-end; upsell/premium off-route and volume recovery expected in 2026 .
  • Purified performance: Strength in retail; purified declines tied to direct delivery disruptions; value positioning maintained .
  • Regional breadth of fulfillment issues: Residual challenges concentrated in Southeast/Mid-Atlantic; mean DSR ~95% .

Estimates Context

  • Q3 beat on adjusted EPS ($0.41 vs $0.36*), slight revenue miss ($1,766.1M vs $1,770.3M*). Q2 missed on both EPS ($0.36 vs $0.41*) and revenue ($1,730.1M vs $1,814.8M*). Q1 beat EPS ($0.29 vs $0.23*) and was slightly below on revenue ($1,613.7M vs $1,619.6M*) . Values retrieved from S&P Global.
MetricQ1 2025 ActualQ1 2025 ConsensusQ2 2025 ActualQ2 2025 ConsensusQ3 2025 ActualQ3 2025 Consensus
Revenue ($USD Millions)$1,613.7 $1,619.6*$1,730.1 $1,814.8*$1,766.1 $1,770.3*
Primary EPS (Adjusted) ($)$0.29 $0.234*$0.36 $0.414*$0.41 $0.363*

Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

  • The quarter’s quality: Strong margin expansion and premium growth offset a modest revenue miss; adjusted EPS beat is notable amid integration recovery .
  • Narrative pivot: Guidance reset reflects slower direct delivery volume recovery; service metrics fixed, but volume cadence lags—management plans pricing harmonization in 2026 .
  • Growth vectors: Premium capacity (Mountain Valley Hot Springs build; Saratoga Texas expansion) and retail distribution gains underpin 2026 acceleration .
  • Cash discipline: Liquidity ~$1.0B, net leverage 3.37x, FCF guidance intact; buybacks and dividend provide capital return flexibility into stabilization .
  • Execution watch items: Direct delivery net adds turning positive by year-end, churn normalization, credits reverting to normal, and route productivity (units/route) trends .
  • Catalysts: New CEO Eric Foss, tariff backdrop potentially easing entering 2026, and synergy realization showing in margins as stabilization costs unwind .
  • Estimate revisions: Expect consensus to recalibrate down for FY25 EBITDA/net sales while maintaining FCF; upward bias in 2026 as operational levers (pricing, premium, distribution) activate .
Additional Source Documents:
- Q3 2025 earnings press release and exhibits: **[2042694_20251106TO16529:0]** **[2042694_20251106TO16529:1]** **[2042694_20251106TO16529:5]** **[2042694_20251106TO16529:10]**
- Q3 2025 earnings call transcript: **[0000884713_2244369_2]** **[0000884713_2244369_3]** **[0000884713_2244369_4]** **[0000884713_2244369_5]** **[0000884713_2244369_6]** **[0000884713_2244369_7]** **[0000884713_2244369_9]** **[0000884713_2244369_11]** **[0000884713_2244369_12]** **[0000884713_2244369_13]** **[0000884713_2244369_14]** **[0000884713_2244369_15]** **[0000884713_2244369_16]**
- Q3 2025 earnings slides: **[0000884713_2243071:11]** **[0000884713_2243071:12]** **[0000884713_2243071:15]** **[0000884713_2243071:19]** **[0000884713_2243071:39]**
- Leadership change press release: **[2042694_20251106TO17188:0]**
- Prior quarters: Q2 PR/Call **[2042694_20250807TO45744:1]** **[2042694_2063233_1]** **[2042694_2063233_5]** **[2042694_2063233_7]** **[2042694_2063233_8]**; Q1 PR/Call **[2042694_20250508TO82255:1]** **[2042694_PRMB_3429210_7]** **[2042694_PRMB_3429210_8]**.