Primo Brands Corporation (NYSE:PRMB) reported first-quarter results on Thursday that topped analyst earnings expectations, though shares moved lower as investors focused on weaker margins and a broader full-year EBITDA outlook.
The stock fell 2.07% in premarket trading following the announcement.
Earnings exceed forecasts while revenue edges higher
The beverage company posted adjusted earnings of $0.23 per share, beating the analyst consensus estimate of $0.19 by $0.04.
Revenue increased 0.8% year-over-year to $1.63 billion, compared with $1.61 billion in the same quarter last year.
Despite the modest revenue growth, adjusted EBITDA declined 10.4% to $306.0 million.
Adjusted EBITDA margin narrowed by 240 basis points to 18.8%, down from 21.2% a year earlier, as the company faced higher transportation expenses, one-time integration costs, and increased depreciation.
Company highlights strength in premium brands and delivery business
“We delivered a strong start to 2026, with momentum building across the business,” said Eric Foss, Chairman and Chief Executive Officer. “First quarter top-line results exceeded our expectations, driven by robust growth in Retail channels led by our premium brands and continued improvement in Direct Delivery.”
Gross margin fell to 28.6% from 32.3% in the prior-year quarter.
Sales of premium water products surged 42.8% to $105.5 million during the quarter, while revenue from regional spring water brands rose to $801.2 million from $794.1 million a year earlier.
Full-year sales outlook raised
Primo Brands increased its forecast for full-year organic net sales growth to a range of 1% to 3%, compared with its previous guidance of 0% to 1%.
The midpoint of the updated range implies stronger growth than many market expectations.
However, the company widened its adjusted EBITDA guidance range to between $1.465 billion and $1.515 billion, citing macroeconomic uncertainty and continued inflationary pressures.
Free cash flow improves significantly
Adjusted free cash flow reached $128.6 million during the quarter, compared with $54.7 million in the same period last year.
Primo Brands maintained its full-year adjusted free cash flow forecast of $790 million to $810 million.
More about Primo Brands
Primo Brands operates in the beverage and bottled water industry, offering a portfolio that includes premium water, spring water, and direct delivery services. The company distributes products through retail channels and home and office delivery networks across North America.