Colgate Palmolive paves the way to exit private label pet business in 2025

Colgate Palmolive’s slowed earnings growth in the fourth quarter (Q4) of 2024 caused by low private-label pet food sales volumes is leading the company to pivot away from the sector.

The U.S.-based company’s net sales decreased 0.1% year-over-year (YoY) to $4.9 billion (€4.8B) during the quarter, while organic sales increased by 4.3%.

Colgate’s net sales for the full financial year were $20.1 billion (€19.5B), up 3.3% from the same quarter in 2024. Organic sales grew 7.4% in the 12 months despite a 0.5% decline caused by low private-label pet food volumes. According to the company, the full-year numbers exceeded official guidance.

The pet portfolio, making up around a quarter of the group’s overall sales, remained strong despite declines in private labels. The sector brought in $1.14 billion (€1.11B) from October to December 2024. That’s up 2.6% YoY from $1.11 billion (€1.08B) during the same period last year.

Outlook

Colgate expects organic sales growth to be within its long-term targeted range of 3% to 5%, including the impact of the planned exit from private-label pet nutrition “over the course” of 2025.

Despite the pivot away from private labels, officials say Hill’s remains well-positioned. “Overall, the business is in a very good place,” says CEO Noel Wallace.

Hills’ market share is growing internationally, though there’s room for improvement in European markets. The company also discussed growth opportunities in the cat and small dog segments.

Wallace added that with many newcomers in the pet food sector, Hill’s would grow by “staying in [its] swim lane,” continuing to develop products in science-based therapeutic pet food.

The New York-based corporation believes that the wind-down of private label production would drive topline growth and margin expansion. However, it’s not clear when exactly this will be completed.