Primo Brands Corporation (NYSE:PRMB) declined on Thursday after a surprise CEO shake-up and a decline in purified water demand, accompanied by a weaker sales and profit outlook.
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The stock struggled as investors digested falling volume trends and a trimmed forecast despite a third-quarter earnings beat.
The company reported third-quarter adjusted earnings per share of 41 cents, beating the analyst consensus estimate of 36 cents.
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Quarterly sales of $1.766 billion (+35.3% year over year) missed the Street view of $1.768 billion.
Regional spring water sales fell 0.8% to $885.6 million, while purified water sales fell 5.2% to $557.5 million. Quarterly sales in the premium water segment jumped 44.4% to $98.2 million.
This was partially offset by lower sales associated with the Ontario, Canada, production facility, which was sold in the first quarter of 2025.
Net income from continuing operations fell 24% to $40.5 million.
Adjusted EBITDA gained 53.2% to $404.5 million. Adjusted EBITDA margin expanded by 270 bps to 22.9%.
Gross margin was 29.9% compared to 31.9%, primarily driven by gross profit attributable to Primo Water as a result of the merger transaction.
Management Change
Primo Brands announced the appointment of Eric Foss as the company's Chairman of the Board of Directors and chief executive officer, effective immediately, succeeding the company's CEO, Robbert Rietbroek.
Dividend
Primo Brands announced that it has declared a dividend of 10 cents per share, payable on December 5, 2025.
Outlook
Primo Brands expects a low-single-digit net sales decline in fiscal 2025.
The company expects adjusted EBITDA in fiscal year 2025 to be between $1.440 billion and $1.460 billion (prior view: $1.485 billion to $1.515 billion).
PRMB Price Action: Primo Brands shares were down 20.19% at $18.08 at the time of publication on Thursday. The stock is trading near its 52-week low of $21.37, according to Benzinga Pro data.
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