Strategic investments spell future growth for Hill’s Pet Nutrition

NEW YORK — Wet pet food innovation is on the horizon for Hill’s Pet Nutrition, a science-led dog and cat food company by Colgate-Palmolive. The pet nutrition segment got off to a solid start in 2024 as it adapted to shifts in volume and capacity, according to Colgate-Palmolive’s first-quarter earnings shared April 26.

Hill’s Pet Nutrition accounted for 22% of Colgate-Palmolive’s total sales in the first quarter. Net sales for the division totaled $1.10 billion, up 3.9% year-over-year, and operating profit was up 8.7% to $199 million. Organic sales growth for the pet nutrition segment was reported at 4.2%, with reported volume down 3.9%, organic volume down 3.9%, and pricing up 8.2%.

Lower volume over the quarter was attributed to decreased private label volume as Hill’s Pet Nutrition shifted its manufacturing network to more branded product, according to Noel Wallace, chairman, president and chief executive officer of Colgate-Palmolive.

Recent capacity investments are beginning to pay off for Hill’s Pet Nutrition, including the opening of its new smart facility in Tonganoxie, Kan. According to the company’s first-quarter earnings presentation, new wet pet food processing capacity has allowed Hill’s to commission new diets, and the brand is currently expanding pet specialty shelf space to accommodate this innovation.

On the supply chain front, the company expects modest increases for raw and packaging material costs throughout the year.

“Hill’s Science Diet and Hill’s Prescription Diet continue to gain volume and value market share across our specialty channels, driven by our science-led innovation and significant increases in brand support despite subdued category volume growth,” Colgate-Palmolive management stated. “We expect volume performance for Hill’s to improve over the balance of the year due to our innovation, brand investment, easier comparisons, and less impact from lower private label volumes.”

The company has been investing heavily in promoting its brand portfolio, including the Hill’s Pet Nutrition segment. Advertising spend was up 16% in the first quarter compared to year-ago, which represents the fifth consecutive quarter of double-digit advertising spend increases, according to Colgate-Palmolive.

Hill’s Pet Nutrition recently launched its own e-commerce platform, shop.hillspet.com, allowing customers to purchase the brand’s pet food products online while supporting animal shelters in need. Through the Hill’s Food, Shelter & Love program, the company will donate $1 to a participating animal welfare organization for every purchase made through shop.hillspet.com.

“Animal shelters across the country are often over-capacity and in need of ongoing funding and support, so it is our goal for shop.hillspet.com to create a positive impact for the pets in their care,” said Caroline Chulick, senior vice president of US marketing at Hill’s Pet Nutrition. “Every donation will support the hardworking shelter partners who are a part of the Hill’s Food, Shelter & Love program.”

Since it was founded in 2022, the Hill’s Food, Shelter & Love program has donated more than $300 million of dog and cat food to over 1,000 animal shelters across North America, according to the company.

“As a long-time partner in the Hill’s Food, Shelter & Love program, we can attest to the important role donations play in helping support homeless pets in finding new, loving homes,” said Steven Hansen, DVM, MBA, CAWA, president and CEO of Arizona Humane Society. “With shop.hillspet.com, we are excited that something as simple as a regular purchase of pet food will directly benefit a shelter pet.”

Companywide, Colgate-Palmolive reported $5.07 billion in net sales in the first quarter, up 6.2% year-over-year, and earnings per share of $0.83, up 84% from $0.45 in the first quarter of 2023. Organic sales were up 9.8%, and double-digit growth was seen for operating profit and net income, according to Wallace.

“We are very pleased to have started 2024 with another quarter of strong top and bottom-line performance as we continued to execute our strategy successfully,” Wallace said. “…Our strong growth momentum and great start to the year add to our confidence that we are executing the right strategies to deliver on our updated 2024 financial targets and generate consistent, compounded earnings per share growth.”

A promising start to the fiscal year encouraged Colgate-Palmolive to raise its full-year guidance for net sales and organic sales. The company now expects net sales growth between 2% and 5%, and organic sales growth between 5% and 7%.

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