Primo Water Corporation (PRMW)

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DOW JONES NEWSWIRES

Primo Water Corp. (PRMW) narrowed its second-quarter loss thanks to soaring sales in its water segment, yet the results missed the company's prior forecast due to delayed promotional launches.
Primo Water, a maker of refillable water bottles, also offered a downbeat forecast for its current quarter, calling for an adjusted per-share loss of 3 cents to 6 cents on sales of $24 million to $26 million. Analysts polled by Thomson Reuters currently expect a per-share profit of 7 cents on $36 million in sales.
Shares tumbled 54% to $6.39 following the results. The stock is down roughly 55% so far this year.
"Two of our major retailers were scheduled to launch a national water and dispenser promotions during the second quarter; however; due to their inventory constraints and other circumstances beyond our control, neither were completed in the second quarter as we expected," said Chief Executive Billy D. Prim said Wednesday.
Primo Water, which went public last November at $12 a share, makes three- and five-gallon purified-water bottles and dispensers, with its business designed to generate recurring demand for exchangeable refill bottles.
The company reported a loss of $2 million, compared with a year-earlier loss of $3 million. On a per-share basis, which reflects the payment of preferred dividends in the year-ago period and a sharp increase in the number of outstanding shares in the latest quarter as a result of the IPO, the loss narrowed to 10 cents from $2.06.
Excluding items such as stock-based compensation expense, the loss narrowed to a penny a share from 84 cents a year earlier.
Net sales climbed 70% to $20.7 million, reflecting strong sales growth in the company's water segment.
Yet results sharply missed the company's previous forecast for adjusted per-share earnings of 4 cents to 8 cents on $24 million to $25.5 million in sales.
Sales from the water segment more than doubled to $14.8 million, helped by a 23% increase in sales of multi-gallon purified bottled water.
Gross margin popped to 27.1% from 19.9%, thanks to an increased mix of higher margin water segment sales.

-By Mia Lamar, Dow Jones Newswires; 212-416-3207; [e-mail]