Primo Brands Q1 Earnings Beat Estimates, Higher Volumes Aid Sales

Primo Brands Corporation PRMB posted mixed first-quarter 2025 results, wherein the bottom line beat the Zacks Consensus Estimate but the top line missed. Both metrics increased on a year-over-year basis.The company saw immense strength across its business. Its beverage portfolio is quite diversified across various price points, formats and channels, consisting of retail, residential, commercial and away-from-home. Saratoga, which is among the company’s premium water brands, performed outstandingly.We note that shares of PRMB have gained 13.3% in the past three months compared with the industry’s 2.8% growth.An Insight Into PRMB’s Q1 PerformanceAdjusted earnings of 27 cents per share surpassed the Zacks Consensus Estimate of 22 cents. The figure increased 50% from earnings of 18 cents per share from the year-ago quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Net sales jumped 42.1% year over year to $1.61 billion but lagged the consensus estimate of $1.62 billion. The top line increased due to a 2.8% rise in volumes and 0.2% growth in price or mix. Healthy demand for its beverage solutions, as well as resilience in the consumer base and category, aided the results. Considering the leap day impact in the year-earlier quarter, the metric grew 4.2%.Organic growth accounted for 2.6%, while inorganic growth contributed around 0.4%. The company delivered sales growth in the entire core water solution offerings and channels, including direct delivery, grocery, club, mass and away-from-home.Primo Brands Corporation Price, Consensus and EPS Surprise Primo Brands Corporation price-consensus-eps-surprise-chart | Primo Brands Corporation QuoteThe gross margin was 32.3%, mainly led by gross profit attributable to Primo Water stemming from the merger transaction and reduced maintenance costs. Adjusted EBITDA rose 56.9% year over year to $341.5 million, while adjusted EBITDA margin expanded 200 basis points to 21.2%. This was led by capitalizing synergies, boosting cost optimization and organic operational efficiencies.Primo Brands’ Other FinancialsThis Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $449.7 million; long-term debt, less current portion, of $5 billion; and shareholders’ equity of $3.3 billion. It had $611 million of availability under its revolving credit facility, which bought PRMB’s total liquidity to roughly $1.1 billion.As of March 31, 2025, PRMB provided $38.8 million in cash for operating activities and $54.7 million of adjusted free cash flow. It invested $66.7 million in capital expenditures, excluding the integration of CapEx.It paid dividends of $38.6 million in the reported quarter. On May 1, 2025, Primo Brands announced a cash dividend of 10 cents per share on its outstanding common stock, payable June 17 to the holders of record as of June 6, 2025.What to Expect From PRMB in 2025?Primo Brands has reaffirmed the net sales guidance of a 3-5% increase on a comparable basis. Management highlighted uncertainty in the economy and consumer spending activities, apart from the constant ambiguity and volatility of the global tariff landscape. It expects a balanced approach between volume and price or mix.The company anticipates achieving $200 million in cost synergies. PRMB is focused on lowering redundant corporate headcount, boosting business efficiencies and optimizing the SG&A structure. It expects total cost synergy opportunities to reach $300 million by 2026-end.The company’s exposure to potential tariffs is minimal and mainly concentrated in its dispenser business, which accounts for nearly 1% of net sales. The tariff backdrop remains escalated compared with the prior periods.3 Stocks Looking GoodNomad Foods NOMD, which manufactures frozen foods, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.NOMD delivered a trailing four-quarter earnings surprise of 5%, on average. The Zacks Consensus Estimate for Nomad Foods’ current financial-year earnings per share (EPS) indicates growth of 3.1% from the year-ago number.United Natural Foods UNFI, which is a distributor of natural, organic and specialty food in the United States, currently carries a Zacks Rank #2 (Buy). UNFI delivered a trailing four-quarter earnings surprise of 408.7%, on average. The Zacks Consensus Estimate for UNFI’s current financial-year sales and EPS indicates growth of 1.9% and 485.7%, respectively, from the year-ago numbers.Utz Brands UTZ manufactures salty snacks under popular brands and has a Zacks Rank of 2 at present. UTZ delivered a trailing four-quarter average earnings surprise of 8.8%.The Zacks Consensus Estimate for UTZ’s current financial-year sales and EPS implies growth of 1.2% and 10.4%, respectively, from the year-ago numbers.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report United Natural Foods, Inc. (UNFI): Free Stock Analysis Report Nomad Foods Limited (NOMD): Free Stock Analysis Report Utz Brands, Inc. (UTZ): Free Stock Analysis Report Primo Brands Corporation (PRMB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks