NEW YORK — Hill’s Pet Nutrition continues to support parent company Colgate-Palmolive, accounting for 23.1% of the company’s total sales. Colgate-Palmolive shared this and more in its fourth quarter performance and full year 2024 results.
Net sales for the fourth quarter ended Dec. 31 were reported at $1.14 billion, a 2.7% increase year-over-year from $1.11 billion in 2023. Organic sales rose 2.9%, volume increased 0.8% and pricing rose 2%. Operating profit was $275 million, an increase of 19% year-over-year.
Net sales for fiscal year 2024 were reported at $4.48 billion, a 4.4% increase year-over-year from $4.29 billion in 2023. Organic sales rose 4.9%, volume slightly increased 0.8% and pricing rose 4.1%.
“Hill’s continues to really execute against the strategy that we outlined three or four years ago,” shared Noel Wallace, chairman, president and chief executive officer of Colgate-Palmolive, during the company’s earnings call on Jan. 31. “Volume was impacted by the impact to private label, so about a 200-basis points impact from the drag on private label. So overall, a 3% volume growth on that business in a roughly flat category right now, we think, is very, very strong.”
According to Wallace, market share on Hill’s continues to increase, making it one of the fastest-growing brands in the pet specialty space. The company continues to reap benefits from its science-based premium offerings and sees opportunities in cat nutrition and wet formats.
“Overall, the business is in a very, very good place,” Wallace said. “… We feel we’re right on pace with where we expected to be and see more opportunities to continue to execute those volume opportunities as we move forward.”
Additionally, Wallace shared that Hill’s optimized network and new Tonganoxie, Kan., facility has helped the brand’s supply chain, which it plans to continue improving.
To support its continued growth, Hill’s plans to refocus its efforts within the wet pet food segment, as well as expand its share in Europe.
“Within the context of the overall category, we are outperforming most of our competitors, and we feel very good about where the business is going and the trajectory of that as we move into 2025,” Wallace detailed.
Stanley Sutula, chief financial officer of Colgate-Palmolive, added, “The Hill’s business is really well positioned, and it’s based on really good execution by the team. They have done really well in a flattish category that we think will slowly improve through time. But the new innovation that they have coming to market, the wind-down of private label and the improved expansion, we think both will drive top line, but also, importantly, will drive margin expansion for that business.”
These new innovations will continue to focus on scientific, therapeutic pet food offerings.
“We’ve also invested over the last several years into our pet nutrition center and the science behind our diets, which I think will continue to bring that innovation to market,” Sutula said. “So, I think Hill’s is really well positioned heading into 2025. We’ve got market expansion opportunities both in the United States and abroad, and a science-based profession driven product set.”
Overall, net sales for Colgate-Palmolive’s fourth quarter were $4.95 billion, a decrease of 0.1% ear-over-year. Organic sales increased 4.3%, which includes a 0.5% negative impact from lower private label pet volume, according to the company.
Gross profit was $2.98 billion, a 1.02% increase from $2.95 billion in 2023. Gross profit margin was 60.3%, an increase from 59.6%. Operating profit was $1.06 billion, a slight decrease of 1% year-over-year.
Fiscal year 2024 net sales were reported at $20.1 billion, a 3.3% increase year-over-year from $19.5 billion in 2023. Organic sales growth rose 7.4%, which includes a 0.5% negative impact from lower private label pet volume, according to the company.
Gross profit for the full year was $12.16 billion, a 7.33% increase from $11.33 billion year-over-year. Gross profit margin was 60.5%, an increase from 58.2%. Operating profit was $4.27 billion, a 7.29% increase from $3.98 billion year-over-year.
“This was our sixth consecutive year with organic sales growth at or above our 3% to 5% targeted range,” Wallace shared. “The combination of strong sales growth and operating leverage drove strong bottom-line performance as well, with net income and earnings per share both increasing double digits versus 2023.
“Reaching $20 billion in net sales for the year is an exciting milestone and I’d like to thank all Colgate people globally for their hard work and dedication to achieving our goals together,” he added. “The quality of our results this year and our strong growth momentum add to our confidence that we are well positioned to deliver consistent, compounded earnings per share growth in 2025 and beyond.”
Based on its fourth quarter and fiscal year 2024 performance, Colgate-Palmolive shared its full year guidance for 2025. Net sales are expected to remain flat, while organic sales growth projected between 3% to 5%.
“We are pleased to have delivered another quarter and full year of strong organic sales growth along with increases in gross profit, gross profit margin, net income, earnings per share and cash flow,” Wallace said. “Our goals for 2024 were to deliver peer leading growth while funding investment for future growth and building flexibility into our P&L to counter macro headwinds. We delivered on those goals, leaving us well positioned to deliver against our guidance in 2025.”
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