Hill's organic sales rise 5.7% in Q3 as volume turns positive

Hill's Pet Nutrition grew organic sales 5.7% in the third quarter, up from 2.1% in each of the first two, as volume rose 1.8% and pricing added 3.9%. Colgate-Palmolive, Hill's parent, put the unit's net sales at $1,205M, up 5.6% from $1,142M a year earlier.

Operating profit rose 5% to $267M, while the margin slipped 20 basis points to 22.2% of net sales. Hill's made up 22% of Colgate's $5,369M in third quarter sales, which rose 4.6%.

Price and volume both grew while margin gave up a little

The first two quarters ran at a slower pace. Pet Food Processing reported first quarter organic growth of 2.1% with volume up 0.2%, and GlobalPETS reported 2.1% for the second quarter with operating margin at 22.5%. Over nine months Hill's organic growth stands at 3.3%, on net sales of $3,594M against $3,417M and operating profit of $816M against $778M.

Hill's exit from private label pet food has weighed on that growth all year. Pet Food Processing put the first quarter drag at 2.7 points, and GlobalPETS put the second quarter drag at 2 points. Colgate's third quarter release lists a 0.2 point drag on company-wide organic sales and says full-year guidance includes the exit. By our math, that works out to roughly 0.9 points at Hill's, which is 22% of the company.

"Our growth momentum continued, delivering another strong quarter of broad-based top- and bottom-line growth," said Noel Wallace, Colgate's chairman, president and chief executive. He said sales grew in "four of five divisions," and Hill's was one of them.

Hill's leaned on price where Purina leaned on volume

Nestlé's Petcare unit, which includes Purina, posted 5.3% organic growth in the same quarter, with 4.3 points from real internal growth and 1.0 point from pricing. Hill's got 3.9 points from pricing and 1.8 from volume. Nestlé said cat led its quarter and dog stayed soft.

Dog is where Hill's has had the harder time. GlobalPETS reported that Wallace named Science Diet dog as the one focus segment that did not grow in the second quarter. Hill's began a phased rollout of Science Diet Single Protein dog food in April and May, its latest fresh-segment product. In May it also received an FDA no-objection letter with Bond Pet Foods for a precision-fermented lamb protein, a clearance we covered at the time.

For brands that compete with Hill's in clinics and at the shelf, the quarter shows a rival raising prices and adding volume in the same period. Colgate said advertising will rise in dollars and as a share of net sales for the year.

Colgate narrows its 2026 range with Hill's inside it

Colgate now expects 2026 net sales growth of 4% to 5%, down from a range of 2% to 6%, and organic growth broadly in line with its nine-month performance. It set its Base Business EPS growth view at 5% to 7%, from mid-single digits. The company said gross margin should now rise for the year, where it had previously expected it to be roughly flat.

The guidance carries the private label exit with it, so the 3.3% nine-month organic figure for Hill's already absorbs the drag. Colgate's next report will show how the Single Protein rollout and higher advertising spending move that number.

Hill's grew volume and price in the same quarter.

Source: Colgate-Palmolive via Business Wire