Primo Water Corp PRMW shares jumped more than 11% on the heels of the company's second-quarter (Q2) earnings report, which showed revenue growth of 4% Y/Y to $593 million, beating the consensus of $586.8 million.
Revenues benefited from the growth of 7% Y/Y in Water Direct / Water Exchange and 18% Y/Y in Water Refill / Water Filtration, partly negated by the exit from business in Russia and North America single-use bottled water retail.
Gross margin expanded 390 basis points Y/Y to 62.1% in the quarter.
Adjusted EBITDA increased 13% Y/Y to $122 million, with margins increasing 160 basis points Y/Y to 20.5%, led by favorable pricing initiatives, higher customer demand, and cost management.
Adjusted EPS of 24 cents surpassed the street view of 20 cents.
Operating cash flow stood at $76.8 million in Q2, higher than $66.7 million a year ago.
As of July 1, cash and cash equivalents stood at $86.8 million.
Repurchase: The Tampa, Florida-based company authorized a new $50 million share repurchase program, replacing the earlier program that expires on Aug. 14.
Dividend: The company declared a dividend per share of $0.08 (+14% Y/Y), payable on September 7, 2023, to shareholders of record as on August 24, 2023.
Outlook: The company expects Q3 revenue of $612 million-$632 million vs. the consensus of $622.8 million and adjusted EBITDA of $129 million to $139 million.
The company raised the FY23 revenue outlook to $2.320 billion-$2.360 billion (from $2.30 billion-$2.35 billion) vs. $2.33 billion estimate and adjusted EBITDA to $460 million and $480 million from $450 million and $470 million.
The company reaffirmed the 2024 outlook for high single-digit organic revenue growth and adjusted EBITDA of $530 million.
Price Action: PRMW shares are trading higher by 11.74% at $15.47 on the last check Thursday.
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