Can a New CEO Rehydrate Primo Brands’ Slump? – C-Suite Transitions

Few companies have burned through goodwill as quickly as Primo Brands. In less than a year, the merger that was supposed to reset the North American bottled water market has wiped out $5 billion in market value, triggered shareholder lawsuits, and forced out its architect-CEO. With a new leader at the helm and a bruised investor base watching closely, Primo is fighting to prove this isn’t just another overhyped integration story gone wrong.

Primo Brands (PRMB): $15.63
Market Cap: $5.54B
EV: $10.82B

Key Insights

• Merger: The 2024 Primo–BlueTriton merger is creating challenges, with service issues and operational disruptions still dragging on performance.
• Earnings + CEO Switch: Q3 earnings and the CEO change were announced on the same day, underscoring the severity of operational misses and the need for a reset.
• New CEO: Eric Foss, known for his turnaround work at Aramark and deep route-based operations experience, was brought in specifically to fix network and service problems.
• Buyback: Primo increased its share repurchase program by $50M, bringing total authorization to $300M. The expanded buyback signals confidence but raises questions given Primo’s high leverage.
• Insider Buying + Valuation: $3M+ in insider buying supports the turnaround narrative, but the stock’s discounted valuation still hinges on Primo stabilizing service levels, improving volumes, and delivering synergy targets.

Primo Brands Corporation is best known for its bottled and dispensed water products. The company was formed through the merger of Primo Water and BlueTriton Brands, combining a wide range of well-known regional and national water brands under one platform. Primo serves customers across North America through home and office delivery, water dispensers, bottle exchange programs, filtration appliances, and a large network of self-service refill stations.

Segments

Primo Brands reports just one operating segment publicly, but the business is more layered beneath the surface. Water isn’t one category; it’s spring, purified, sparkling, premium, flavored, refillable, and everything in between. Primo sells nearly all of them. So internally, the company groups its business by product format and distribution channel rather than treating it as one broad category.

Here’s how they view it:

• Regional Spring Water includes Poland Spring, Deer Park, Arrowhead, Ozarka, Ice Mountain, and Zephyrhills. This segment focuses on naturally sourced spring water sold through retail and direct delivery.
• Purified Water includes Primo Water, Pure Life, Sparkletts, Crystal Springs, and Hinckley Springs. It provides treated and purified bottled water across home delivery, retail, and commercial customers.
• Premium Water features Saratoga, The Mountain Valley, and AC+ION. These brands offer higher-end still, sparkling, and functional waters targeted at restaurants, hospitality, wellness, and premium retail.
• Water Exchange and Refill includes Primo’s 3 and 5-gallon bottle exchange program and its nationwide self-service refill stations. It delivers a low-cost and high-margin reusable water solution for consumers.
• Other Hydration Solutions include flavored and enhanced waters such as Splash Refresher, along with filtration systems, water dispensers, and office coffee services.

Dual-Engine Business Model

Primo Brands runs an end-to-end water business that blends recurring delivery revenue, affordable refill options, and strong retail coverage. Because the company handles production, distribution, and direct-to-consumer delivery itself, it has tight control over sourcing, logistics, and the overall customer experience.

• Direct-to-Consumer (DTC) Segment (The Recurring Cash Flow):
  This segment accounts for approximately 45% of revenue and is the core source of predictable, high-margin revenue, operating on a classic “razor-and-blade” model. The “razor” involves renting or selling water dispensers, which locks the customer into the profitable “blade”—the scheduled, recurring delivery of multi-use bottled water (Home and Office Delivery, or HOD). This model’s profitability is critically dependent on maximizing route density and achieving high customer retention. It also includes the high-volume Exchange and Refill offerings.
• Retail & Other Segment (The Scale and Brand Equity):
  This segment accounts for approximately 55% of revenue and focuses on traditional packaged water sales. It leverages a market-leading portfolio of iconic national and regional brands (e.g., Poland Spring®, Ice Mountain®, Saratoga®) that provide scale and are the primary source of volume-led growth, particularly within the premium product lines.

Merger and Resulting Integration Issues

Primo Brands was created through the merger of Primo Water Corporation and BlueTriton Brands, an all-stock deal completed on November 8, 2024. The transaction combined Primo’s delivery, exchange, and refill platform with BlueTriton’s large spring-water manufacturing and regional brand network, creating a $6.5B hydration company with national scale, vertically integrated sourcing, and one of the largest distribution footprints in North America. On paper, the merger offered clear synergies, route density gains, procurement scale, and a targeted $200M in cost savings, but the integration has proven significantly more challenging than the company initially anticipated.

Since closing, Primo has faced significant operational disruptions due to warehouse consolidation, route realignment, and technology migration. Management now acknowledges it “moved too far, too fast,” which resulted in a breakdown in service reliability, particularly in the Home & Office Delivery network.

At one point, delivery completion rates slipped into the 80% range, well below the 95%–98% standard for a stable hydration delivery business, leading to delayed orders, customer complaints, and elevated churn. Comparable revenue trends weakened as service problems persisted, forcing the company to cut its full-year 2025 sales outlook despite reporting strong reported (merger-scope) growth.

These integration shortcomings also triggered a wave of securities class-action investigations, with plaintiffs alleging the company overstated the quality of integration progress while internal service metrics were deteriorating. The combination of service disruption, guidance reductions, elevated SG&A, and legal overhang has weighed on investor sentiment and contributed to stock volatility. The severity of integration challenges set the stage for a forced management shakeup.

Leadership Reset

Primo Brands announced a significant leadership shift on November 6, 2025, appointing Eric J. Foss as Chairman and Chief Executive Officer, effective immediately. Notably, the announcement was released alongside Q3 2025 earnings, underscoring the Board’s intent to pair a strategic reset in leadership with updated financial expectations and a clear acknowledgment of operational underperformance.

Foss succeeds Robbert Rietbroek and arrives with a deep track record in large-scale beverage, logistics, and route-based distribution systems. His resume includes leading turnaround and operational transformation efforts as Chairman and CEO of uniform services company Aramark (ARMK) from 2012 to 2019, where he guided the company through a successful IPO, as well as serving as CEO of Pepsi Bottling Group, giving him sector-specific expertise in managing global, asset-intensive DSD (Direct Store Distribution) networks.

The urgency behind this transition was unmistakable. YTD 53% stock price decline and the 6.5% volume contraction in the Direct Delivery segment ultimately forced the Board to make a decisive change. Foss was chosen precisely because his skill set aligns with the heart of Primo’s challenges: stabilizing and optimizing a complex physical network of delivery routes, drivers, depots, and service workflows.

Markets reacted sharply. Primo’s stock suffered a steep collapse following the announcement. Shares fell 36% in a single trading session, dropping from about $22.34 to $14.36, marking a new 52-week low.

One can only speculate that the drop in the stock was related to the company’s decline in gross margin and operating margin, and not necessarily the appointment of Eric Foss as the new CEO.

Robbert Rietbroek’s Departure

Robbert Rietbroek, the architect and chief proponent of the Primo Water–BlueTriton merger, resigned from both the CEO role and the Board on the same day. While the board framed the transition as orderly succession planning, the timing and substance suggest that board pressure intensified as the severity of integration failures increased.

Incoming CEO Eric Foss immediately acknowledged that management had made catastrophic speed-of-execution errors, stating: “There is no doubt speed impacted our ability to get through a lot of the warehouse closures and route realignment without disruption.”

Securities Class Action Lawsuit

In October 2025, Hagens Berman filed a class-action lawsuit alleging Rietbroek and other executives made materially misleading statements about integration progress, synergy timing, and service reliability, claiming the merger was “far more complicated” than disclosed and had caused significant technology and customer-service breakdowns that impaired Primo’s ability to supply customers.

These lawsuits allege that Primo Brands:

• Misrepresented the pace, quality, and success of the integration
• Concealed severe operational problems in its delivery and warehouse networks
• Provided overly optimistic synergy and revenue guidance despite internal data contradicting such projections
• Failed to disclose material customer disruption and service failures prior to November 2025

With a lead-plaintiff deadline of January 12, 2026, the case is now a clear overhang. If the plaintiffs win, potential settlement costs of $50–$100 million would add pressure just as new leadership is trying to stabilize the business heading into 2026.

Insider Transaction- $3M+ in Purchases

Following the CEO transition, Primo Brands saw a coordinated wave of insider buying totaling roughly $3.1 million.

Newly appointed CEO Eric J. Foss led the activity with nearly $2 million in open-market purchases across November 11–12, buying 128,019 shares at prices between $15.52 and $16.15. CFO David W. Hass followed with approximately $250,000 in purchases at $15.71 per share, while Director Steven P. Stanbrook added close to $900,000 worth of shares at an average price of $16.43.

The timing, directly after the leadership change, earnings reset, and public acknowledgment of integration issues, strengthens the signaling value of these trades.

Share Repurchases: Buyback Program Update

Primo Brands announced that its board has added another $50 million to the company’s share repurchase program, bringing total authorization to $300 million. So far, the company has bought back about 4.4 million Class A shares for $97.7 million, leaving roughly $202.3 million in remaining capacity.

Executing buybacks at this stage when deleveraging should arguably be the priority can be interpreted in two ways: either management is confident in a near-term operational recovery, or it is leaning on financial engineering to support the stock while leverage remains elevated. With annual interest and debt service costs exceeding $220 million, the decision materially tightens financial flexibility at a time when execution risk is still high.

Financials

Primo Brands exits Q3 2025 with a balance sheet that reflects the scale of the merged platform but also the weight of elevated leverage. The company holds $423 million in cash against $5 billion in long-term debt, putting net debt at $4.6 billion.

Quarterly operating cash flow came in at $283 million, and after $133 million in capex, the business generated $150 million in free cash flow and $311 million in adjusted free cash flow. Trailing 12-month adjusted free cash flow totaled approximately $734 million, representing a 51.9% conversion of adjusted EBITDA.

Liquidity remains adequate with an undrawn revolver and roughly $1 billion in total availability. However, the balance sheet is undeniably debt-heavy, making deleveraging and operational stabilization essential as the company works through integration challenges and focuses on service recovery heading into 2026.

Valuation

Primo Brands trades at a $5.5B market cap and $10.8B EV. Q3 2025 results showed $404.5M in Adjusted EBITDA (22.9% margin), and management is targeting ~$1.45B in 2025 EBITDA. On that target, PRMB trades at an implied ~7.4× EV/EBITDA, well below beverage peers at 12–14×.

The discount reflects ongoing integration issues, service disruption, and elevated leverage. If Primo delivers on its synergy goals ($200M by 2025, $300M by 2026) and stabilizes volumes and delivery execution, the stock has room to rerate toward peer multiples. If not, the current valuation discount remains justified.

Third Quarter 2025 Results (Press Release) (Presentation)

• Net sales rose 35.3% to $1.8B (from $1.3B), driven by the addition of higher BlueTriton volumes, partially offset by the sale of an Ontario production facility in Q1 2025.
• Gross margin declined to 29.9% from 31.9%,
• SG&A increased 43.1% to $343M (from $239.7M), primarily due to merger-related cost increases.
• Net income from continuing operations was $40.5M (or $0.11 per diluted share), compared with $53.3M (or $0.24 per diluted share) a year earlier.
• Adjusted EBITDA grew 53.2% to $404.5M (from $264.1M), with margin expanding 270 bps to 22.9% (from 20.2%).
• Operating cash flow was $283.4M; after $132.7M in capex and intangibles, free cash flow was $150.7M, and Adjusted FCF reached $311.1M, up from $234.8M in the prior-year period.
• Dividend: The Board declared a $0.10 per-share quarterly dividend, payable December 5, 2025, to shareholders of record as of November 25, 2025.

The Investment Thesis (Bull & Bear)

Bull Case

Under new CEO Eric Foss, the bull case hinges on translating the recovery in delivery service reliability (DSR back to ~95%) into sustained unit volume growth and positive net customer adds through the first half of 2026. With adjusted EBITDA margins already running at 22.9% due to synergy capture, incremental revenue drops efficiently to the bottom line, accelerating free cash flow and supporting faster deleveraging. If customer churn stabilizes and volumes inflect in Q1/Q2 2026, the market could begin to reward the execution progress with a multiple re-rating—from roughly 11x forward earnings today toward a more normalized 17–18x peer range. Such a shift would imply a price target in the $28–$35 range.

Bear Case

If operational fixes don’t offset structural weakness in Direct Delivery and leverage stays high at ~3.37× Net Debt/EBITDA, Primo may be forced to direct more free cash flow toward debt service rather than growth. Continued 6%+ volume declines in H1 2026 could trigger negative guidance revisions, leading investors to value the business largely on its retail assets and pushing the stock below its $14.36 52-week low.

Conclusion

Primo Brands is facing a rare combination of challenges: operational missteps from the merger, shareholder litigation, growing analyst skepticism, and a leveraged balance sheet. Management is counting on Eric Foss’s leadership, a slower integration pace, and a renewed focus on service reliability to steady the business and rebuild credibility.

But with the stock down 51% year-to-date and more than $5 billion in market value erased, the company now needs clear proof of customer stabilization and early organic growth in Q4 2025 and Q1 2026. The next year will determine whether Primo is genuinely turning a corner or whether deeper structural issues limit its ability to recover.

I plan to take a closer look at Primo, its competitors, and how various recovery scenarios could play out for the company in our next Special Situations Newsletter that will be published on December 1st.

CEO

1. Carmax (KMX): Terminates President and Chief Executive Officer William D. Nash effective December 1, 2025. (Filing)
2. Apogee Enterprises (APOG): Chief Executive Officer Ty R. Silberhorn resigns effective October 31, 2025. (Filing)
3. Hudson Technologies (HDSN): President and Chief Executive Officer Brian F. Coleman resigns effective November 3, 2025. (Filing)
4. MongoDB (MDB): Chief Executive Officer and President Dev Ittycheria resigns effective November 9, 2025. (Filing)
5. Regional Management (RM): President and Chief Executive Officer Robert W. Beck resigns effective November 10, 2025. (Filing)
6. Ball (BALL): Chief Executive Officer Daniel W. Fisher resigns effective November 10, 2025. (Filing)
7. Calavo Growers (CVGW): President and Chief Executive Officer Lee E. Cole retires effective December 8, 2025. (Filing)
8. Hydrofarm (HYFM): Chief Executive Officer John Lindeman resigns effective December 1, 2025. (Filing)

CFO

1. Xerox Holdings (XRX): Chief Financial Officer Mirlanda Gecaj resigns effective December 2, 2025. (Filing)
2. Frontdoor (FTDR): Chief Financial Officer Jessica Ross resigns effective November 10, 2025. (Filing)
3. Inspirato (ISPO): Chief Financial Officer Michael Arthur resigns effective November 3, 2025. (Filing)
4. Rapid7 (RPD): Chief Financial Officer Tim Adams retires effective December 1, 2025. (Filing)
5. Surrozen (SRZN): Chief Financial Officer Charles Williams resigns effective November 12, 2025. (Filing)
6. Wyndham Hotels & Resorts (WH): Chief Financial Officer Michele Allen resigns effective November 4, 2025. (Filing)
7. Edgewise Therapeutics (EWTX): Chief Financial Officer Michael Carruthers retires effective November 10, 2025. (Filing)
8. Malibu Boats (MBUU): Chief Financial Officer Bruce W. Beckman resigns effective November 12, 2025. (Filing)
9. Rekor Systems (REKR): Chief Financial Officer Eyal Hen resigns effective November 17, 2025. (Filing)
10. Duos Technologies Group (DUOT): Chief Financial Officer Adrian Goldfarb retires effective November 15, 2025. (Filing)
11. Helios Technologies (HLIO): Chief Financial Officer Michael Connaway resigns effective November 17, 2025. (Filing)
12. Kornit Digital (KRNT): Chief Financial Officer Lauri Hanover resigns effective December 15, 2025. (Filing)
13. Virginia National Bankshares (VABK): Chief Financial Officer Tara Y. Harrison resigns effective November 11, 2025. (Filing)
14. Watts Water Technologies (WTS): Chief Financial Officer Ryan Lada resigns effective November 15, 2025. (Filing)

General Counsel/Chief Legal Officer

1. BWX Technologies (BWXT): General Counsel Ronald O. Whitford, Jr. resigns effective November 4, 2025. (Filing)
2. Exelixis (EXEL): General Counsel Jeffrey Hessekiel resigns effective November 7, 2025. (Filing)
3. Gilead Sciences (GILD): General Counsel Deborah H. Telman resigns effective December 5, 2025. (Filing)

Others

1. Prelude Therapeutics (PRLD): President and Chief Medical Officer Jane Huang resigns effective November 3, 2025. (Filing)
2. Amplify Energy (AMPY): Chief Accounting Officer resigns effective November 14, 2025. (Filing)
3. Elme Communities (ELME): Chief Information Officer Susan Gerock resigns effective November 14, 2025. (Filing)
4. Korro Bio (KRRO): Chief Medical Officer Olukemi A. Olugemo resigns effective November 12, 2025. (Filing)
5. Immunovant (IMVT): Chief Medical Officer Michael Geffner resigns effective November 21, 2025. (Filing)
6. IonQ (IONQ): Chief Revenue Officer Rima Alameddine resigns effective November 24, 2025. (Filing)

Appointments

1. Keurig Dr Pepper (KDP): $27.68

On November 25, 2025, Keurig Dr Pepper announced the appointment of Anthony DiSilvestro as Chief Financial Officer effective November 25, 2025.

2. Constellation Energy Corporation (CEG): $359.09

On November 21, 2025, Constellation Energy announced that Shane Smith, currently SVP of Treasury and Credit, will be promoted to Executive Vice President and Chief Financial Officer once the company’s acquisition of Calpine Corporation closes, which is expected in the fourth quarter of 2025.

3. Citigroup (C): $102.50

On November 19, 2025, Citigroup appointed Gonzalo Luchetti, currently Head of U.S. Personal Banking, as the company’s next Chief Financial Officer, effective early March 2026.

4. Rexford Industrial Realty (REXR): $41.66

On November 17, 2025, the Board of Directors of Rexford Industrial Realty approved the appointment of Laura Clark, who currently serves as Chief Operating Officer as Chief Executive Officer, effective as of April 1, 2026.

5. Walmart  (WMT): $109.1

On November 13, 2025, the Board appointed John R. Furner as president and chief executive officer of the company, effective February 1, 2026.

Departures

1. Keurig Dr Pepper (KDP): $27.68

On November 25, 2025, Keurig Dr Pepper announced that Sudhanshu Priyadarshi, the company’s Chief Financial Officer and President, International, is no longer serving in these roles as of that date and will serve as a senior advisor providing transition services to the company through April 7, 2026.

2. Chart Industries (GTLS): $203.85

On November 17, 2025, Chart Industries announced that Jillian Evanko, its President and Chief Executive Officer, has notified the Board of Directors of her decision to resign as President, CEO, and Board member, effective January 6, 2026, to pursue other opportunities.

3. Rexford Industrial Realty (REXR): $41.66

On November 17, 2025,  Rexford Industrial Realty announced that Michael S. Frankel and Howard Schwimmer will depart as co-Chief Executive Officers effective on March 31, 2026.

4. Eaton Corporation (ETN): $341.69

On November 14, 2025, Olivier Leonetti, Chief Financial Officer of Eaton Corporation, informed the company of his intention to leave the company on April 1, 2026, as part of a planned transition.

5. Walmart (WMT): $109.1

On November 11, 2025, C. Douglas McMillon, president and chief executive officer of Walmart, notified the company that he will retire from his position as president and chief executive officer, effective on the close of business on January 31, 2026.

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