NEW YORK — Hill’s Pet Nutrition raked in $1.13 billion in net sales for the third quarter of 2024, an increase of 6.3% from the prior year. This means that the pet nutrition business accounted for 22% of Colgate-Palmolive’s total sales for the quarter.
For the third quarter ended Sept. 30, operating profit for the pet nutrition business was $258 million, an increase of 28% from the prior year period. Organic sales rose 6.5% and organic volume increased 3.6% compared to 2023.
For the nine months ended Sept. 30, net sales for Hill’s were $3.34 billion, an increase of 5.2% from the prior year period. Operating profit was $691 million, an increase of 20.17% from the prior year period. Organic sales rose 5.6% and organic volume rose 0.7% in 2024 compared to 2023.
“It was a strong performance for Hill’s in the quarter, strong volume, which was really encouraging, given the impact of lower private labels,” shared Noel Wallace, chairman, president and chief executive officer of Colgate-Palmolive, during the company’s earnings call. “We were up mid-single digits on volume and a really strong margin performance on the business. And we’ve been consistent with what we’ve articulated in the past, which is that we want to continue to reinvest that margin into driving category growth and that's exactly what we're doing.
“We’re gaining market share,” he added. “We’re the fastest growing brand, global brand and pet specialty in neighborhood pet stores. So, we feel good about where we are. We’re continuing to expand that business into segments that we weren’t aggressively competing in, specifically wet. So overall, we feel very good about where the Hill’s business is and our ability to continue to drive strong, sustained growth behind strong advertising levels.”
Hill’s growth continues to be fueled by expanding capacity. According to Wallace, capacity expansions have provided the business with more flexibility, allowing it to expand into higher growth segments, like wet formats. Looking to the future, Hill’s will continue to hone in on capacity while also optimizing its supply chain.
“There’s more work to be done,” Wallace said. “We'll continue to, obviously be very, very diligent about how we think about allocating volumes across the world and addressing some of the growth opportunities that we see, particularly internationally, but overall a terrific quarter. The supply chain team at Hills is doing just an exceptional job integrating the new facilities and finding ways to really optimize the network.”
Overall, net sales for Colgate-Palmolive in the third quarter were $5.03 billion, an increase of 2.4% from $4.92 billion in the same period in 2023. Organic sales rose 6.8% and gross profit margin increased 260 basis points to 61.1%.
“We are very pleased to have delivered another quarter of strong top and bottom-line results with earnings exceeding our expectations,” Wallace said. . “Net sales increased 2.4% and organic sales grew 6.8% (on top of 8.8% organic sales growth in the year ago quarter) driven by a healthy balance of volume growth and higher pricing. Every operating division delivered positive volume growth for the second consecutive quarter as we focus on increasing household penetration to drive category growth and market shares.
“We are particularly pleased with the quality of our results this quarter on top of our strong first half results,” he added. “This is our sixth consecutive quarter delivering gross margin expansion along with growth in operating profit, net income and earnings per share. Advertising increased 16% in the quarter behind science-led, core and premium innovation across price tiers. We expect continued strong advertising investment through the remainder of the year as we focus on building brand health and scaling the capabilities needed to drive growth.”
The company also updated its 2024 guidance. Net sales growth is now expected between 3% and 5%, compared to the previous guidance of 2% to 5%. Organic sales growth is expected between 7% and 8%, compared to the previous guidance of 6% to 8%.
“Our strong results this quarter and year to date add to our confidence that we are executing the right strategies to deliver on our updated 2024 organic sales and Base Business earnings growth expectations, drive cash flow and generate consistent, compounded earnings per share growth,” Wallace concluded.
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