USA – Hill’s Pet Nutrition continues to drive growth for parent company Colgate-Palmolive, accounting for 22% of the company’s total net sales in the second quarter of 2024.
Noel Wallace, chairman, president, and CEO of Colgate-Palmolive, praised Hill’s strong performance during the company’s financial results presentation on July 26.
For the quarter ended June 30, Hill’s net sales reached US$1.11 billion, marking a 5.5% increase from US$1.06 billion in the second quarter of 2023. Organic sales rose by 6.1%, and reported organic volumes increased by 2.5% year-over-year.
Pricing also saw a 3.7% uptick. Hill’s operating profit for the quarter was US$235 million, a substantial 23% increase from US$191 million in the same period last year.
In the first six months of 2024, Hill’s net sales totaled US$2.22 billion, up 4.7% from US$2.12 billion year-over-year, with organic sales increasing by 5.2%.
Despite a 0.7% drop in both reported and organic volume, the operating profit for the pet food division grew to US$433 million, nearly a 16% rise from US$374 million in the first half of 2023.
Hill’s continues to expand its market share across specialty channels despite facing a challenging pet food market. Increased production capacity, including a new smart facility in Tonganoxie, Kansas, has provided greater flexibility throughout its supply chain.
This has been particularly beneficial for the availability of its Prescription Diet range in wet formats and has supported the expansion into new can sizes, flavors, and textures.
Wallace emphasized the wet pet food market as a key growth area for Hill’s, aiming to increase household and retail store penetration.
“We’re continuing to invest aggressively to drive that household penetration and couple that with a robust innovation pipeline,” he said.
He noted that the capacity expansion has allowed Hill’s to maintain a consistent supply to veterinary professionals and improve the availability of products on shelves.
Hill’s has also benefited from a more moderate inflation environment on input costs and a flattening in commodity pricing, which has helped sustain volume.
Colgate-Palmolive reported overall net sales of US$5.06 billion for the second quarter, up 4.9% from US$4.82 billion in 2023, with organic sales growing by 9%.
Gross profit margin increased by 280 basis points, and net cash from operations was US$1.67 billion for the first half of 2024.
“We are very pleased to have delivered another quarter of strong top and bottom line results,” Wallace said.
He highlighted that every operating division showed positive volume growth and noted a significant increase in advertising investment to support long-term business health.
Colgate-Palmolive expects raw and packaging material costs to rise modestly throughout the year, with commodity costs also projected to increase in the second half of 2024.
The company has updated its financial guidance 2024, forecasting net sales growth of 2% to 5% and raising its organic sales growth guidance to 6% to 8%, up from the previous 5% to 7%.
Wallace expressed confidence in the company’s strategies to deliver on these expectations, drive cash flow, and generate consistent earnings per share growth.
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