Thank you, operator, and hello, everyone. With me on the call today are Eric Foss, Chairman and Chief Executive Officer, and David Hass, Chief Financial Officer.

Our discussion today includes forward-looking statements within the meaning of US federal securities laws, which are subject to risks and uncertainties that may cause actual results to differ materially. For more information, please refer to our forward-looking statements disclosure in our earnings release.

In addition, the definitions of and applicable reconciliations for any non-US GAAP financial measures are included in our earnings release and supplemental earnings slides, which were made available earlier today on the Investor Relations section of our website. With that, I'll pass it to you, Eric.

Thanks, Traci. Good morning, and thank you for joining us.

Today, I'll review our second quarter performance and how we're positioning the company to be fit to win by continuing to improve on the direct delivery customer experience, advancing our key growth priorities, and simplifying our leadership structure. David will then cover our financial results and 2026 guidance.

We're encouraged with the accelerating momentum across the business in the second quarter, with strengthening fundamentals driven by ongoing improvements in the customer experience in direct delivery, and strong dollar and volume share gains in the bottled water category within retail. Second quarter net sales were $1.8 billion, up 4.2% on a comparable basis versus prior year, ahead of our expectations and marking a second consecutive quarter of year-over-year growth.

Growth was broad-based, reflecting continued strength across our brands in retail and a faster-than-expected return to growth in direct delivery. Adjusted EBITDA increased 5% to $385 million, with margin expansion driven by improving productivity, stronger operating leverage, and continued progress in direct delivery.

With top-line growth again exceeding our expectations and momentum broadening across both retail and direct delivery, we're raising our 2026 comparable net sales growth guidance for a second consecutive quarter. We now expect growth of 2% to 4%, up from the previously guide of 1% to 3%.

We are reaffirming our adjusted EBITDA guidance of $1.465 billion to $1.515 billion, as we intend to continue to invest behind growth and as we manage the current dynamic macro cost environment. Our business fundamentals continue to improve, and we remain well positioned in an attractive growing category.

Our differentiated portfolio of leading brands spanning the value spectrum, an advantaged route-to-market, and disciplined execution gives us confidence we have the right foundation to drive long-term growth. Building on this, last month we took an important step forward by simplifying our leadership structure.

This included eliminating the Chief Operating Officer role, enhancing leadership capacity with the addition of a highly experienced beverage industry professional in the role of President of Customer Direct and Go-to-Market, and elevating certain critical roles like Chief Supply Chain Officer to report directly to me. These changes are designed to improve our ability to serve our customers and accelerate key growth priorities and support faster decision-making, and to create a more agile and accountable operating model.

We believe these actions further strengthen our position and enhance our ability to capitalize on the growth opportunities ahead. Let's review our near-term priorities, which we have discussed in the last few quarters.

First, was to improve the customer experience in direct delivery, and second, was to return the company to balanced growth. We've now delivered on both of these priorities for a second consecutive quarter.

Direct delivery returned to growth, up 0.4% in the quarter. This returned to growth was one quarter ahead of our expectations and marked a significant milestone, reflecting meaningful progress in stabilizing the business and improving the customer experience.

At a high level, direct delivery growth is driven by several key levers: adding new customers, improving revenue retention, disciplined pricing, and tuck-in M&A. In the second quarter, performance improved across several of these areas.

New customer additions remained strong, and with the reduction in historical incentives, we're improving new customer quality and narrowing the average revenue gap to more tenured customers. On a sequential quarterly basis, customer quits and the contact center call volumes also declined, with call volumes below pre-integration levels.

We also saw improvement in key operational metrics. On-time in-full, or OTIF, improved month-over-month through June, reaching the mid-90s despite elevated peak season demand.

We also continue to make the customer billing experience easier and more clear through simpler invoices, expanded payment options, stronger credit processes, and improving invoice timing for many residential customers. Our Solved by Sundown initiative has also been supporting faster resolution of customer concerns.

We're encouraged with our progress, but there is more work ahead as we continue to stabilize the business and lay the foundation for optimization to accelerate profitable growth. Supported by our simplified leadership structure, we're taking targeted actions to improve execution, productivity, and the customer experience, creating a flywheel that we believe will enhance operational performance and accelerate growth.

Our second priority was returning the total business to growth, which we achieved for a second consecutive quarter. Our retail business delivered strong and broad-based growth.

Our regional spring water net sales increased 4.1%, purified water increased 1.9%, and premium brands increased 30.5%. We also expanded our retail presence through new points of distribution.

This performance drove continued value and volume share gains in the bottled water category. Going forward, we see multiple growth vectors: continuing to brand build and innovate, improving our in-store presence, and a more strategic and holistic approach to revenue growth management.

We also see meaningful opportunity in cold and immediate consumption, where we're underpenetrated in a high-growth, high-margin segment. Another growth vector is premium.

Saratoga and Mountain Valley continue to be among the strongest growth assets in the portfolio, again growing dollar and volume share category in the quarter, driven by expanded distribution. With strong brand equity, growing distribution along with new capacity, we believe they are still early in their growth journey and see meaningful opportunities for both scale and mix, driving operating leverage and margin expansion over time.

Our final growth priority is developing a more strategic and holistic revenue growth management approach across price points, packages, and channels. In the first half of the year, we took strategic and disciplined actions across select areas of our portfolio, using our approach that begins and ends with the consumer, while factoring in competitive dynamics, our cost structure, and the economics of our retail partners.

We continue to believe we are well positioned to manage through the current dynamic macro and geopolitical conditions. Our portfolio serves consumers across price points, packages, channels, and occasions, and we have a number of levers, including productivity and pricing, that we believe can help mitigate inflationary pressures while supporting long-term growth and margin expansion potential.

In closing, we're encouraged by our first-half progress, which reflects an enhanced customer experience, improving execution, and building momentum across the business. In short, we believe the business is fundamentally stronger than it was six months ago.

As One Team Primo, our customer-first culture fuels our passion to serve our customers and consumers with excellence each and every day. Our near-term focus is to continue to execute with purpose and pace to drive sustainable, balanced growth, and as that growth scales, we expect productivity and operating leverage to support margin expansion, increased cash flow generation, and long-term value creation.

With that, let me turn the call over to David.

Thank you, Eric. For 2026, reported financials include Primo Brands results for both 2026 and 2025, as we're now past the anniversary of the merged companies.

To enhance comparability of continuing operations, we focus on comparable results, which exclude the Eastern Canadian operations exited in the first quarter of 2025 and the office coffee services business exited during 2025. Reconciliations are available in our earnings presentation available on our website.

Second quarter comparable net sales increased 4.2% versus the prior year, driven by a 4.3% contribution from price/mix, modestly offset by a negative 0.1% contribution from volume. In retail, net sales growth was driven across all channels, led by mass, grocery, and away-from-home; across pack sizes, driven by occasion and case packs; and brands, led by premium and regional spring waters.

In fact, in retail sales channels, our premium sales growth exceeded the overall 30.5% premium water increase, reflecting ongoing strength in retail channels while continuing to recover within the direct delivery channel. Direct delivery net sales growth was driven by price and mix benefits, despite lower volume resulting from a smaller customer base.

On a comparable basis, direct delivery net sales increased 0.4%, slightly ahead of our break-even expectations and a 340-basis-point sequential improvement from the first quarter. This progress reinforces that our recovery efforts are driving tangible improvements in service levels, which is also reflected in continued increases in our NPS scores and Trustpilot ratings.

Adjusted EBITDA increased $18.3 million to $385 million, with comparable adjusted EBITDA margin up 10 basis points to 21.4% versus the prior year. On a quarterly sequential basis, comparable adjusted EBITDA margin improved 260 basis points, reflecting enhanced operating efficiency in a seasonally stronger quarter and productivity gains enabled by more stable operations.

Within direct delivery, our continued investments in routes, service, and customer experience drove a more consistent net sales performance. At the enterprise level, adjusted EBITDA growth versus prior year was partially offset by higher transportation costs, primarily related to a tighter freight market and higher spot rates.

We also continued to make strategic investments across the business to support long-term growth and productivity. Turning to our balance sheet and cash flows, we are encouraged by the improved health of our balance sheet and the quality of our cash flow.

Net leverage was 3.42 times at quarter-end, an improvement from 3.52 times in the first quarter, demonstrating a normal seasonal deleveraging pattern as we move closer to our near-term target of below 3 times as cash flow and EBITDA continue to strengthen. Our liquidity remained strong, with $953 million of availability between our cash balance and our unused line of credit.

As expected, the level of EBITDA and free cash flow adjustments declined significantly, which is a positive step toward a cleaner cash flow profile and better alignment between reported results and the underlying performance of the business. We generated $227.9 million of cash flow from operations for the quarter.

Adjusting for significant items, most notably our integration and merger activities, cash flow from operations would have been $266.4 million. Adjusted free cash flow, which excludes integration-related capital expenditures, was $200.1 million, representing a $30.4 million improvement versus prior year.

Our strong financial flexibility allows us to reinvest in the business while returning cash to stockholders. Second quarter total capital expenditures were $104.6 million.

While $35 million was related to integration capital expenditures, the majority supported growth initiatives and maintenance. We also continued to execute our share repurchase program.

During the quarter, we repurchased $15.5 million, or 708,000 shares, under our $300 million authorized program. Turning to guidance.

As a reminder, in 2026, we cycle the exit of our office coffee services business, which accounted for $25.5 million in our reported 2025 net sales, as well as the Eastern Canadian operations, which accounted for $3.6 million in our reported 2025 net sales results, putting the comparable 2025 net sales base at $6.635 billion. We are raising our comparable 2026 net sales growth guidance for a second consecutive quarter.

We now expect growth in the range of 2% to 4%, from our previous 1% to 3% guidance. This reflects our second quarter outperformance versus our expectations and the broadening of momentum across retail and direct delivery.

We are reaffirming adjusted EBITDA guidance in the range of $1.465 billion to $1.515 billion. At the midpoint, this implies an adjusted EBITDA margin of 21.8%, which is flat compared to the prior year, as we invest behind growth and manage a dynamic cost environment.

This entails taking disciplined actions to manage higher transportation and commodity costs, while continuing to invest in service, capabilities, and overall customer experience to support long-term growth. We believe we have multiple levers to help mitigate commodity impacts, including pricing actions, growth initiatives, ongoing supply chain cost initiatives, and our financial risk management program.

These actions are expected to support near-term cost mitigation and long-term margin expansion potential. In direct delivery, we expect productivity to improve following peak season, as we realign the cost structure under our enhanced operating model, while making disciplined investments in key initiatives, such as the customer contact center and a warehouse management system, that strengthen the customer experience and position the business for future growth.

Adjusted free cash flow guidance remains $790 million to $810 million, supported by the strength of our cash generation. We expect free cash flow quality to improve sequentially through the balance of the year, driven by lower adjusted EBITDA add-backs and the typical timing lag between expense recognition and cash payment.

Our strong free cash flow profile supports our capital allocation priorities. We continue to expect annual capital expenditures of approximately 4% of net sales, in addition to approximately $100 million of 2026 integration capital expenditures, of which approximately $18 million remained at the end of the second quarter.

Finally, we remain committed to returning cash to stockholders. Last week, our board of directors reaffirmed the 12 cents quarterly dividend, which annualizes to 48 cents per share, and we intend to continue executing our share repurchase plan, with $62.8 million remaining under the program authorization as of the end of the second quarter.

With that, I'll turn the call back to Traci.

Thanks, David. To ensure we can address as many of your questions as possible, please limit yourself to one question, and if we have time remaining, we will re-poll for additional ones.

Operator, please open the line for questions.

Hi. Good morning.

Thank you for taking the question. I was wondering if you can talk about customer counts into the second half.

We obviously have seen an improvement. You talked about the service levels, but also kind of net adds, and that's something that investors have been watching as you go.

I know the inflection was an important landmark for Primo. If you look at the cadence also when you think about the 47%/53% that you highlighted before, and how we should be thinking about it after these results.

Lastly, just a clarification on the sequencing of the retail business, what are you seeing in terms of the growth in volumes as we go through the balance of the summer? I know there was probably some pull-forward potentially for a number of different reasons you had, also an easy comparison.

If you can just kind of take us through the balances for both businesses, that will be appreciated. Thank you.

Thanks, Andrea. It's Eric.

Let me start with the first one. I think, number one, we're very pleased with our progress.

Obviously, we've seen improved momentum really across the business. We continue to see both the retail business perform well, broad-based across channels and brands.

The pace of our recovery and corrective actions that we took on the customer direct business are adding to the overall customer experience, and we're seeing that across leading and lagging indicators. Just on the customer direct business, we're obviously pleased with that progress.

To your question on cadence, yes, the cadence of our top line and customer direct, we did see stronger monthly performance in the months of May and June than we did earlier in the quarter. I think as you think about that business, obviously we talked a little bit about some of the supply chain disruption that is now, I think, fully behind us.

On the service side, I think this was probably the biggest step forward we made in the quarter, which is, if you think about call volume, it's back to pre-merger levels. If you look at quits, they continue to improve.

We talked about on the prepared comments kind of the mid-90s performance that we're seeing on OTIF. Then if you look at nets, we did see a positive month within Q2.

I think the really encouraging thing is, this business is now returned to growth. We're seeing, again, NPS, kind of customer satisfaction metrics improve dramatically versus where we've been.

We have more to do. We talked about the warehouse management system, work on the customer journey, future call center, investments in tech and AI.

Lots more to do, but really, really pleased with the overall recovery of that business. On your second question, I think it was related to volume.

Again, encouraged by the top-line recovery. We obviously saw sequential acceleration in that top line from Q1 into Q2.

Again, very happy with how broad-based that growth is. When you're growing, strong growth, double-digit growth on premium, but you're also seeing all of our regional spring waters and Pure Life grow at the same time, you're seeing that growth broad-based across almost every single channel we do business in.

I think one of the most important metrics is the fact that we grew both our value and our volume share is very encouraging to us. Anyway, overall, very, very encouraged by how the business has performed.

Eric, just a clarification. This is super helpful.

On the HOD, the net adds, you said within the quarter it's returned to growth, inflected to growth. When was that?

Was that the exit month, or that was an easy comp from last year, or within the months in terms of cadence?

The growth cadence on the overall business, as I was trying to articulate, was in the months of May and June.

What happened now in July? How we should be thinking July and August in terms of that sustainability of that cadence of that improvement in the HOD?

Again,

we feel, as I've said, very pleased with our progress. It's broad-based.

We continue to feel like the actions we took, both the pace and the actual actions themselves, are creating a much better customer experience. All of the leading and lagging indicators that we called out are in a better spot, and we continue to be encouraged by the continued recovery, and certainly would anticipate that continuing to be in a good spot as we walk forward.

Yeah. Thank you.

Good morning, everyone. Eric, I was hoping maybe you could just give us a little bit more color on kind of the volume versus price/mix.

It looks like the majority of the revenue growth was driven by price/mix. If you could just kind of help give us some kind of underneath the cover kind of perspective on that, that would be super helpful.

Then, David, just there was a lot of talk when the integration happened around working capital and working capital improvements, and I know that obviously a lot of that has been disrupted with some of the integration challenges, but now that we're kind of moving forward, I would love your kind of updated thoughts on the progress that you can make there and kind of timeline. Thank you.

Sure, Nik. Good morning.

I think let me try to deconstruct a little bit of the volume/price dynamic. I think number one, while we saw a return to growth on the customer direct business, it wasn't volume growth, so that recovery is still ahead of us.

What happens is if you really deconstruct this thing at a unitized level, we did see volume positive in the quarter. Again, if I break it down and actually move over to retail, on a year-to-date basis, we're seeing a split of about 40/60, pretty balanced between volume and price, which is obviously what we're trying to do.

Overall, again, I can't be more enthusiastic about our progress and how top-line growth actually exceeded our expectations. Again, we continue to look at this through a category lens.

We've got a good category, pretty stable consumer environment, feel very good about our own position, and are continuing to be encouraged by what lies ahead.

Nik, on the working capital, I think when you go through last year and you run into some integration-related disruptions, you then kind of get caught up a little bit in your collections process, and that would not be as efficient as we would have liked. As you move into this year, that's improving pretty rapidly, as well as the quality of the customer that we are retaining, which is the most important measure.

I think when you look at that, that should continue to be a tailwind for us with regard to at least the cash cycle. Again, I think we are getting our arms around vendor relations and continuing to take advantage of the benefits of the merger with those vendor relations, so that should also allow us to sort of action activities against payable days.

Then inventory will be what I'll call sort of a variable in that equation, where last year, we probably could have advantaged ourselves with a little bit higher inventory levels going through some of the branch and integration transitions. This year, that's not a problem at all in customer direct, and I think also where you'll see us sort of lean in on inventory is as we continue to develop our small-format, immediate consumption business, making sure we sort of have product availability ready for what is a much higher-velocity business than our traditional shelf-based program.

Again, I feel very comfortable overall that working capital will continue to be a benefit for us as the business continues to perform more smoothly this year.

Excellent. Thank you.

I'll pass it on.

Thank you. Hey, everybody.

Good morning. I guess if I want to connect two things.

One is the re-organization, one of the outcomes is that you're a lot more nimble than perhaps you would have been before. Now that you also have a business that's performing better than expected, that frees up a lot of investment dollars.

As you're thinking about the back half, what are some of the things that you might be doing differently now? Maybe playing a lot more offense than you otherwise would have been, than what could have been the plan six months ago when we first started putting together some thoughts on how the year was going to play itself out?

Thanks, Kaumil. It's Eric.

Good morning. Appreciate your question.

On some of the things we did structurally, you've heard me talk before, we're in the people business and the team with the best players win. The strategic rationale around some of the changes we made was really focused on, first and foremost, the customer, improving that overall experience, making sure we're prepared each and every day to provide great service and great execution at the moment of truth, continue to reinforce some of the cultural dimensions around creating a performance and recognition culture, and then also making sure in a fast-moving category like this, we have the speed and agility on the decision-making front.

I think taking the customer direct business direct to me, along with supply chain direct to me, kind of eliminates a layer and allows us to do that in a more seamless way, in a quicker way. The folks that we've added from an experience and skill standpoint, broad-based leadership background, strong go-to-market in the beverage business, and bring a lot of the relevant skills and experiences we were looking for.

I think relative to the second part of your question, obviously you're much better positioned when you're in the virtuous cycle and kind of that growth flywheel than kind of where we saw ourselves several months ago, six months ago. Again, we want to continue to play offense.

I think what we have to do is continue to be very good on investments that are going to help the overall model succeed. Whether that's call center resources, whether it's investments in tech and AI, whether it's investments in capability, obviously marketing and brand building, I've described in the past, I think, kind of moving from stabilize to optimize to ultimately strategize.

I think from where we are right now, our focus near-term continues to be on growing the core, and as we get further into this journey, that should allow us to think differently about other growth options.

Okay. Got it.

David, I think you alluded to this a little bit, but as it relates to new customer adds, who are they? Are they different from customers you've had before?

Are they returning customers that you would have lost when you had some of the issues, or are they entirely new? Maybe a little more detail on sort of the composition of the net adds?

Yeah.

I think I'll start with the simple statement that we don't have as great of tracking of you used to be one and now you are one again. Those are analytical capabilities we can continue to enhance, as well as consumer intercepts and insights that sort of educate us a little bit more on that.

What I feel fortunate about our position, especially in those direct-to-consumer, bulk-water categories, are more people are leaving tap each and every day than would be considering that their primary source of sort of home-use or office-based water. When you look at a departure or a donation from that sort of share of consumer, again, they obviously can go to pitcher filtration, singles, and things that we also thrive at in retail.

When you come over to the bulk spectrum, we feel very advantaged and fortunate with our position from the lowest-entry-price water at refill to a mid-stage water price within our exchange business, where both of those you do your own work, to obviously the more premium end of the business where four delivery fees and sort of access to high and great brands and convenience that could be brought to your home or office. I feel like, again, we're in an advantaged position where the tailwinds would say that more consumers are making these decisions for their health and wellness benefits, as well as sort of departing what was a former source of their primary water.

Great. Thanks so much.

Wanted to ask a little bit about the premium side of the portfolio. Still up 30%, which obviously is a great number, but it was a deceleration versus what the business had been trending at previously.

Just curious if there's anything to kind of call out there and how you think about what's a sustainable growth rate on the premium side of the business. Thanks.

Hi, Lauren. Good morning.

We, again, saw continued double-digit growth, around 30%, as you mentioned, in premium, stronger on Saratoga than Mountain Valley. As you'll recall, we were in the midst of starting up a new Mountain Valley line, that did create a little bit of product supply disruption at one point.

We're still early in the journey on the premium. We have to continue to invest in brand building.

The good news is very strong brand health across both of those brands. We got to continue to drive penetration, frequency, pack rate.

Overall, we continue to see it. We're early in that journey, and we would continue to see these brands continue to perform very, very well.

They both, in the quarter, grew value and volume share, pleased with it, and we'll continue to walk down that journey and see those brands perform, I think, fairly well.

Great. Thanks so much.

Thank you.

All right. Thank you.

Good morning, everyone. I had a question on pricing you took on your immediate consumption portfolio during the quarter.

Eric, I guess I was just hoping to hear some more color on what you're seeing and hearing from retailers, consumers, and your competitors. Also curious if you've been able to maintain shelf space, and will you consider future pricing on other maybe packages and/or channels?

I guess I'm ultimately trying to understand if the strength in retail this quarter is sustainable going forward. Thank you.

Sure, Bonnie. Good morning.

Let me start. Our growth goal is to be balanced across volume and price, and I think we mentioned on past calls that we had a lot of work to do in the area of RGM and pricing from an insights, process, tool standpoint.

Again, our framework and principles and the way we think about this is we start and end all of our decisions on pricing with the consumer. We really want to make sure that we define value and how she looks at it, and we incorporate that into the decision-making matrix.

Maintaining competitiveness is another key principle of ours, and then obviously we have to look at the company P&L and what's happening in terms of inflation and costs and margin implications. Then it's about how do you take that and package it into a comprehensive development approach around where are there opportunities, whether they're rate opportunities or mix opportunities or trade spend opportunities.

That's just a mental model for how we think about it. Earlier this year, we did take pricing on immediate consumption.

Historically, we've had a large gap to competition. Obviously, we've talked about the closer you link purchase to consumption, the consumers' orientation tends to be more convenience.

As we've done that, the good news is that we're still price competitively, in most instances, still lower than competition. Again, I think as we think about this going forward, it'll be about looking at if we do something, it'll be more on a precision basis, really looking at packages and brands where we need to improve profitability or returns, and in some instances, looking at trade spend, where it may have been ineffective historically.

We did have some trade spend a year ago in Q3 that was put into the market on the retail side to try to offset some of the softness we were experiencing on direct delivery business. As we look at those and lap those, making sure those were effective, and where we had no or low return on investment, we'll look to tweak our trade spending in some instances.

Again, overall, again I want to come back to the fact that year-to-date, we're continuing in our retail business to be very balanced, and again, I think as kind of David pointed out earlier, the beauty of this portfolio is it's so well positioned across the value spectrum through the eyes of the consumer. From an entry point on refill through exchange into our packaged water business, obviously Pure Life is one of the most attractively priced branded products out there.

You go into our regional spring waters and all the way through premium. We feel very good about the positioning of portfolio, and again, we'll continue to approach things in a very balanced way.

Hey. Good morning, guys.

Thanks for taking the question. David, just a question on the guidance.

Obviously, a nice improvement in the top line and you're raising the outlook there, kind of leaving the EBITDA unchanged, which I think is probably prudent. Maybe you can just help us think through a few items on that line.

One, just the level of reinvestment, and you may have mentioned a number earlier, I think I might have missed it, but just the level of reinvestment that you're putting back into the EBITDA line this year. Then maybe as a secondary, just how the cost environment is kind of shaping up as you begin to kind of do planning on '27.

Oil is obviously a lot lower than it was when we spoke 3 months ago. You're relatively well hedged for this year, but I think just those two items would maybe help frame how we might start to begin thinking about the profitability potential for the next year.

Thanks very much.

Thanks, Peter. Within the route side of the business, we're in kind of the direct delivery channel at this point, we continue to ensure and look at kind of two indicators.

Where are we on daily OTIF, which obviously compounds into monthly and quarterly performance, and then monitoring sort of call volume, which obviously is a indication that something didn't go right at the moment of truth with the consumer or in the billing process. Both of those continue to give us a signal that we can sort of manage the route count that typically follows the volume trajectory, whereas in Q1, that would have been a little heavier.

As we came into Q2, we had the right route sizing, and what is typical is as you exit Q3, you would go into route alignment that sort of matches sort of the shoulder quarters of Q4 and then Q1 of 2027. Again, without a specific number there, that remains sort of an area that we feel much more comfortable about as we performed during Q2 and as Q3 begins, but is something that we'll continue to monitor.

In terms of the general inflation environment, areas around diesel, which is a primary input of that route system, we remain obviously well hedged this year, and sort of we average into those hedges for next year where we have a decent percentage already taken down for 2027. Then the rest, I think, is really what's been notable in the sort of market domain around the tightening freight market.

That continues to be some of the aggravation we see where we are in the spot or third-party market. What Primo has done over the course of the year is continue to invest in what we call our private fleet, which is transitioning drivers or hiring drivers specifically to run vehicles either owned or leased on our own network, which again takes out some of that sort of friction cost.

Those tend to be, as you've called out, some of the higher inflationary items within the business. When you look kind of year-over-year, obviously the business is benefiting from the pricing, obviously a more and optimized OpEx structure, the volume return in retail and more of a stable market indirect, and then sort of navigating those inflationary items like freight and sort of unhedged areas of the business.

Hey. Thanks for taking my question.

David Shakno on for John Anderson. Wanted to ask about the club and away-from-home channels.

Club I think was a little bit soft in 2025. It's been up mid-single digits the first half here.

Away-from-home, up high single digits past couple quarters here. Just wanted to understand what trends you're seeing in those channels.

Is it, especially on the away-from-home, is it new partnerships and additional TDPs there? In club, is it consumer value-seeking behavior?

Just wanted to understand those two channels in particular.

I think to your point, we continue both in the quarter, we saw mid-single-digit growth on club, same thing year-to-date, and on the away-from-home, high single-digit. I think on the away-from-home, it's a lot about build-out of distribution and continuing to see that business continue to grow.

Premium plays a key role in there. On the club business, it's about making sure we're positioned right, pallet positions, new distribution opportunities.

As we mentioned, it's not just club and away-from-home. We're seeing really good balanced growth across now that both the direct business and retail business are growing, but within retail, grocery, club, mass, C&G, dollar, all performing really, really well.

The balance and broad-based nature of the growth is really encouraging.

Yes. Good morning.

Thanks again. Just wondering if you could elaborate on some of the other levers that you have beyond commercial or price to pull, should we continue to see inflationary pressures continue to build throughout the year.

Then in the direct delivery business, could you just give us an update in terms of how much redundant or excess costs you're carrying and when we expect those to wind down? Thanks again.

Yeah.

I think with regard to levers, obviously we'll continue to look through our hedging programs, as well as sort of traditional sort of RFP measures around sort of supply chain elements. That's ongoing, especially as we navigate budget planning sessions for 2027.

Within the direct delivery side, as I guess without specifics, we're at a route count coming into Q2 that allowed us to sustain that performance and deliver it about 40 basis points ahead of expectations, with that growth expected to continue in the second half. I think what we'll do as we exit the quarter is start to look at what will be the optimal route count that matches the consumer demand for those volumes.

That's typically been the muscle we have every year, certainly pre-merger, but just obviously through last year we've kind of had that elevated. Again, we'll look at what those need to be, how that matches demand, and sort of report a little bit clearer on that coming in and out of third quarter results.

Hey. Thanks for taking the question.

I wanted to go back to the reinvestment topic, and obviously you've made a number of investments to restore the momentum in the direct delivery business this year. It doesn't sound like you really want to quantify that, but I'm trying to think through what reinvestment levels look like in '26 versus kind of the long-range reinvestment needs for the business.

Is there any way you can kind of help frame that up, maybe talk about the long-term margin potential of the business? Any help around that would be great.

Unfortunately, we'll navigate this year. Obviously, it's a pretty dynamic environment.

I think commenting on anything longer term, we would save for our traditional sort of guidance reveal on 2027 in the spring of next year. Obviously, again, it remains dynamic.

I think we have levers at our disposal. I think we have a fortunate position of consumer demand that's generating volume, so that helps balance and then not be just price/mix related.

Again, I think regardless of being through sort of what we call our major integration milestones, the productivity journey doesn't end, and we'll continue to look through the P&L and continue to optimize the business for future success.

The only thing I would add is I do think that, as you think about what's now behind us, David mentioned the routes, we had an investment in win-back initiatives, we had an investment in additional call center resources, those are largely behind us. I mentioned earlier, going forward, we'll continue to invest in marketing and brand building, capability, and tech and AI.

I think we will continue to be very disciplined around managing productivity across SG&A and efficient supply chain across manufacturing, warehousing, and S&D, and again, are looking to grow this business in a very balanced way and sustainable way.

Yeah. Good morning, everybody, and great to see some good momentum coming back to you.

One question for me is, can you just maybe provide some early signals or commentary on how the new warehouse management system is impacting your supply chain execution and, I think, customer satisfaction as well?

Yeah. Thanks, Derek.

Appreciate the comments and question. I think it's just too early to tell.

We obviously have it in pilot and are continuing to learn. Again, it's going to add value, but at this moment in time, it's really just about reading the pilot, making whatever necessary changes we do before we begin to roll it out.

It's just way too early to talk about any significant contribution from the warehouse management system.

Great. Thanks for taking the question.

Eric, earlier in the year, you talked about some low-hanging fruit from some kind of basic retail execution and blocking and tackling in the stores that just wasn't really done by the predecessor companies. Can you talk a bit about progress on some of those areas that you had in mind to date, and sort of what you're seeing or what you're planning in terms of cadence of getting at some of these opportunities in second half or 2027?

Thank you.

Sure. I think my focus is really all about what lies ahead versus what has happened historically.

I think as you think about the growth vectors of this business, first and foremost, the improvement on the customer experience in customer direct hopefully creates a growth flywheel on that business for us as we walk forward to unlock. Second, we've talked a lot about improving our presence, and as you can see, we continue to drive new points of distribution across our retail business.

Whether it's driving distribution, making sure we get more feature activity and promotional activity, certainly display of inventory, expanding our presence on shelf, whether it be warm or cold, and then cold drinking immediate consumption, all of those are opportunities for us. I would say as we walk forward, those are ones that we continue to focus on, and will be kind of the centerpiece of how we approach the 2027 customer sell-in.

Multiple growth vectors on this business, exciting to see where those opportunities are, and more to come on how those plans will unfold as we get into the later half of this year, and specifically into 2027.

Thank you. In closing, we're certainly pleased with both the Q2 and first-half results.

I want to thank all of the Primo associates for their passion and pride and all that they do every day, and thanks for all of you on the line for your time today and your continued interest and investment in Primo. Have a great day.