...Strong demand and increased pricing should support mid-single-digit growth in fiscal 2023. Primo Water Corp.'s (Primo) water direct and exchange business should remain solid owing to steady growth in both its residential and commercial customer segments. Growth in the residential segment is bolstered by higher sales of water dispensers, which should lead to visible recurring revenue ("razor-razorblade model") over the medium term as Primo services these new customers with its water direct and exchange business. Meanwhile, we believe the commercial business will return to pre-pandemic levels over the next year or two. North America is currently operating at about 90% of pre-pandemic levels, and Europe at 80%, but they are ramping up as expected. During fiscal 2022, Primo successfully passed on price increase in its water direct and exchange businesses in response to inflationary cost pressures. Despite the higher pricing, the company's water direct customer retention ratio improved to 86.5%,...
