Hill’s Sales Up, While Recall Weighs On Iams

Hill’s Pet Nutrition sales have risen while Iams has been dealing with recalls.

Hill’s Pet Nutrition’s sales grew 12 percent and unit volume grew 5 percent in its third quarter ending Sept. 30, 2007, while Procter & Gamble Co. attributed a 2 percent drop in pet food volume primarily to “continued negative impacts from the voluntary wet pet food recall” during the quarter.

Hill’s parent Colgate-Palmolive Co. reported consumption growth and market share gains in the U.S. pet specialty channel for the quarter were driven by strong sales of Science Diet Canine Large Breed, Science Diet Canine Lamb & Rice Small Bites, Science Diet Indoor Cat and Science Diet Light (feline) and the relaunch of Science Diet Canine Nature’s Best.

In the U.S. veterinary channel, Hill’s growth was driven by Prescription Diet c/d Multicare Feline, Prescription Diet d/d Canine and Prescription Diet j/c Canine.

Internationally, the company reported strong growth in Russia, South Africa, the United Kingdom, Italy, Spain, Germany, Australia and France. Net products overseas included Science Plan Feline Chunks in Gravy pouches, a veterinary exclusive Science Plan Neutered Cat and Prescription Diet j/d Canine and Feline.

With sales of $464.3 million for the quarter and $1.4 billion year-to-date, pet nutrition now accounts for 13 percent of Colgate’s sales. Pet nutrition operating profits were $116.9 million for the quarter and $354.5 million year-to-date.

For the quarter, Colgate reported net income of $420.1 million on sales of $3.5 billion.

Colgate reported net income of $1.3 billion on sales of $10.1 billion for the nine-month period. During the nine-month period, Colgate reduced its pet nutrition sales by $2.1 million and increased its operating expenses by $13.6 million due to the recall.

Despite its pet food slump, P&G reported net sales for its Snacks, Coffee and Pet Care unit, which includes the Iams and Eukanuba lines, increased 6 percent to $1.1 billion during its first fiscal quarter ended Sept. 30. Net earnings for the unit grew 30 percent to $113 million for the quarter.

Overall, P&G reported net earnings grew 14 percent to $3.1 billion and sales grew 8 percent to $20.2 billion for the quarter.


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