second quarter 2026
Filed Aug 5, 2026Primo Brands Reports 2026 Second Quarter Results
Net sales increased 3.8%, Adjusted EBITDA increased 5.0%, and the Company raised its full-year Net Sales growth outlook for the second consecutive quarter. The result included lower gross margin and lower Adjusted net income, while net debt was $4.9 billion.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $1,796.2 million | – | 3.8% |
| Gross marginGAAP | 30.5% | – | – |
| SG&A expensesGAAP | $345.5 million | – | – |
| Net income from continuing operationsGAAP | $69.2 million | – | $38.7 million |
| Net income per diluted share from continuing operationsGAAP | $0.19 | – | $0.11 |
| Adjusted net incomenon-GAAP | $134.2 million | – | $(2.9) million |
| Adjusted net income per diluted sharenon-GAAP | $0.37 | – | $0.01 |
| Adjusted EBITDAnon-GAAP | $385.0 million | – | 5.0% |
| Adjusted EBITDA marginnon-GAAP | 21.4% | – | 20 bps |
| Net cash provided by operating activities from continuing operationsGAAP | $227.9 million | – | – |
| Capital expenditures and additions to intangible assetsother | $104.6 million | – | – |
| Free cash flownon-GAAP | $123.3 million | – | – |
| Adjusted Free Cash Flownon-GAAP | $200.1 million | – | – |
| Total debt, excluding unamortized debt costs and discountsother | $5.3 billion | – | – |
| Unrestricted cash and cash equivalentsGAAP | $366.5 million | – | – |
| Net debtnon-GAAP | $4.9 billion | – | – |
| Net leverage rationon-GAAP | 3.42x | – | – |
2026 Full Year Financial Outlook Comparable Results outlook
- RevenueNet Sales Growth: 2% to 4%
- NoteAdjusted EBITDA: $1,465 million to $1,515 million
- NoteBase CAPEX: 4% of Net Sales
- NoteAdjusted Free Cash Flow: $790 million to $810 million
Capital returns
- Cash dividends were $43.5 million for the quarter ended June 30, 2026.
- Share repurchases under our repurchase plan, including brokerage commissions, were $15.5 million during the quarter ended June 30, 2026.
What drove it
- Net sales growth was primarily driven by an increase in sales attributable to premium brands and regional spring water.
- The exited US Office Coffee Services business did not recur in the current quarter and partially offset net sales growth.
- Retail channels delivered robust growth led by regional spring water and premium brands.
- Direct Delivery returned to growth earlier than anticipated.
- Gross margin was affected by increased transportation related costs and depreciation and amortization, partly offset by revenue growth and lower non-recurring integration related costs.
- SG&A expenses declined primarily because of lower marketing costs and definite-lived intangibles amortization incurred in the prior year quarter not recurring in the current quarter.
Concerns
- Gross margin was 30.5% compared to 31.3%.
- Adjusted net income was $134.2 million compared to $137.1 million.
- Increased transportation related costs and depreciation and amortization pressured gross margin.
- Net debt was $4.9 billion and the net leverage ratio was 3.42x.
- The Company is actively managing inflationary pressures through multiple levers across the business.
What to watch
- Delivery of the updated 2026 full-year Net Sales Growth outlook of 2% to 4%.
- Delivery of Adjusted EBITDA guidance of $1,465 million to $1,515 million while prioritizing growth investments.
- Delivery of Adjusted Free Cash Flow guidance of $790 million to $810 million.
- Whether retail strength in premium brands and regional spring water continues.
- The continuation of growth in Direct Delivery.
- Transportation related costs, depreciation and amortization, and the trajectory of gross margin.
Balance sheet and cash flow
- Net cash provided by operating activities from continuing operations was $227.9 million.
- Capital expenditures and additions to intangible assets were $104.6 million.
- Free cash flow was $123.3 million.
- Adjusted Free Cash Flow was $200.1 million, compared to $169.7 million in the prior year quarter.
- Total debt, excluding unamortized debt costs and discounts, was $5.3 billion as of June 30, 2026.
- Unrestricted cash and cash equivalents totaled $366.5 million as of June 30, 2026.
- Net debt was $4.9 billion and the net leverage ratio was 3.42x.
Analysis
Second-quarter net sales were $1,796.2 million, up 3.8% from $1,730.1 million. The Company attributed growth primarily to premium brands and regional spring water, with robust Retail-channel growth and an earlier-than-anticipated return to growth in Direct Delivery. The exited US Office Coffee Services business not recurring in the current quarter partially offset sales growth.
Profitability showed a mixed pattern. Gross margin was 30.5%, compared with 31.3%, as transportation related costs and depreciation and amortization more than offset the benefits of revenue growth and lower non-recurring integration related costs. SG&A expenses declined to $345.5 million from $378.6 million, driven by lower marketing costs and lower definite-lived intangibles amortization. Adjusted EBITDA increased 5.0% to $385.0 million and Adjusted EBITDA margin rose 20 bps to 21.4%.
GAAP net income from continuing operations increased to $69.2 million from $30.5 million, and diluted earnings per share from continuing operations increased to $0.19 from $0.08. Adjusted net income declined to $134.2 million from $137.1 million, although adjusted diluted earnings per share increased to $0.37 from $0.36. This divergence between GAAP and adjusted income measures, alongside the gross-margin decline, is a key feature of the quarter.
Cash generation strengthened. Net cash provided by operating activities from continuing operations was $227.9 million, compared with $155.0 million in the prior-year quarter. After $104.6 million of capital expenditures and additions to intangible assets, free cash flow was $123.3 million, while Adjusted Free Cash Flow was $200.1 million compared with $169.7 million. The Company paid $43.5 million in cash dividends and repurchased $15.5 million of shares, while reporting $4.9 billion of net debt and a 3.42x net leverage ratio.
For 2026, Primo Brands raised its comparable Net Sales Growth outlook to 2% to 4% from 1% to 3%. It reaffirmed Adjusted EBITDA guidance of $1,465 million to $1,515 million, Base CAPEX of 4% of Net Sales, and Adjusted Free Cash Flow of $790 million to $810 million. Management stated that it continues to prioritize growth investments while managing inflationary pressures.
Management, verbatim
We are encouraged by our first-half progress, which reflects stronger fundamentals, improved execution, and increased momentum across the business.
Eric Foss, Chairman and Chief Executive Officer
Not in the filing
stated, not guessed- Operating income and operating margin were not reported in the provided filing text.
- Gross profit was not reported in the provided filing text.
- Total net income, including discontinued operations if any, was not reported in the provided filing text.
- Income tax expense and tax rate were not reported in the provided filing text.
- Segment or channel revenue figures and segment margins were not reported in the provided filing text.
- Prior-quarter comparisons were not reported for the listed metrics.
- Prior-year free cash flow was not reported.
- Prior-year balance-sheet figures were not reported.
- Prior guidance from the previous earnings release was not provided; therefore, no actual-versus-prior-guidance comparisons are included.
- Forward gross-margin, operating-expense, and tax-rate guidance were not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.