Primo Water Holdings Inc.: Delivery becoming more dependable; maintain Marketweight

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Primo Water Holdings Inc.: Delivery becoming more dependable; maintain Marketweight

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Primo Water Holdings Inc.

Delivery becoming more dependable;

maintain Marketweight

Credit Analysis

Operations showing signs of improvement 01 July 2026

The integration of Blue Triton created disruption and service levels in its Direct Delivery High Yield Credit

business declined. Volume in the segment continued to be lower year-over-year in 1Q26. United States

However, the company has improved its On Time In Full (OTIF) delivery to greater than Beverages

90% in March (from below 90% in 4Q25). We expect further increases in on-time William M. Reuter

delivery and volume in the segment will return to growth. Research Analyst

BofAS

Higher resin costs may pressure margins +1william.m.reuter@bofa.com646 855 6363

Primo has significant exposure to commodity costs, including resin, glass, aluminum, and Michael DeRienzo

fuel. The company estimates that a 10% increase in the price of these commodities ResearchBofAS Analyst

would increase COGS by $82 million annually. The company does have supplier michael.derienzo@bofa.com

agreements which partially insulate the company from the impact of higher costs. These

agreements are typically in place 12-24 months into the future. If the conflict in the Primo Water Holdings Inc.

Middle East continues to result in elevated oil prices, margins are likely to be pressured. (PRMWCN)

Key Data 1Q2025A 1Q2026A LTM

Operating (US$ mm)Reducing our estimates on higher resin costs

Primo tweaked its FY26 guidance modestly to reflect (1) solid sales and (2) input cost Revenues 1,614 1,626 6,676

volatility driven by higher oil costs. Guidance now includes: (1) Organic sales +1% to Adj EBITDA 341 306 1,411