Nestlé: Pet care sales fell in H1, but Q2 brought modest improvements

Nestlé’s pet care sales declined by 3.2% year-over-year (YoY) from January to June to CHF 8.9 billion ($10.9B/€9.6B), making this the second year of declining revenue.

In H1 2025, the category saw CHF 9.2 billion ($11.3B/€9.9B) in revenue, down from the CHF 9.5 billion ($11.6B/€10.1B) registered in the first half of 2024. 

But the pet portfolio registered organic growth of 2.7%, composed of 1.8% of real internal growth (RIG) and 0.9% of pricing in the 6-month period. The organic growth was supported by strong cat product sales and improved performance in dog products during Q2.

The multinational’s global sales saw a similar trend during the period and decreased 2.5% YoY to CHF 43.1 billion ($53B/€46B). The group’s net profit dropped by 31.4% to CHF 3.5 billion ($4.3B/€3.8B), while gross margin declined by 20 basis points to 46.4%. 

Q2 insights

In Q2, however, pet care sales increased marginally by 0.3% to CHF 4.5 billion ($5.6B/€4.9B). Organic growth also slightly improved to 2.8%, comprising RIG of 2% and pricing growth of 0.8%. 

According to the company, “both cat and dog contributed to growth” in this period, particularly the Pro Plan, Purina ONE and Felix brands. 

Market performance

In North America, while pricing increased in Q2, RIG declined, mainly driven by coffee and petcare, which together account for more than 60% of the company’s sales.

“Petcare growth was negatively impacted by retailer inventory reduction in the quarter,” says Nestlé’s CFO, Anna Manz. “We have moved from capacity constraints to pipeline replenishment, pre-buying ahead of a price increase and now retailer destocking as our customers adjust to consistent supply.”

However, Manz told investors that US retail sell-out growth of around 4% indicated stronger consumer demand for the company’s products. The segment gained market share in the Americas as a whole, also helped by “strong growth in Latin America.”

The company is also confident in its “RIG-led growth” in Europe, which has sustained a positive trajectory over the past 2 years. While Nestlé reported growth across all categories, it highlighted premium wet cat food and strong e-commerce performance in the region. 

In Asia, Oceania and Africa, organic growth reached high single digits, driven by wet cat food as well as new launches in key markets.

Guidance

Nestlé expects organic growth to be in the range of 3% to 4% for fiscal year (FY) 2026, with RIG accelerating compared with 2025 as the company works on “focused growth plans.” In pet care, the identified growth platforms are wet cat food, emerging markets, therapeutics and supplements.

It also forecasts an improvement in its underlying trading operating profit (UTOP) margin without giving a specific number. For H2, the company expects its margin “to be broadly similar to the first half.”