Supplements continue to drive H&H’s pet segment growth in Q1

Hong Kong-based Health and Happiness (H&H) Group reported a 1.5% year-over-year (YoY) decline in Pet Nutrition and Care (PNC) segment revenue for the first quarter (Q1) of fiscal year (FY) 2026, ended 31 March, totaling RMB 493.4 million ($69M/€64M). On a like-for-like (LFL) basis, revenue increased 1.5% YoY.

The PNC segment accounted for 11.6% of the group’s total revenue. According to Akash Bedi, Group CEO and CEO of North America, Middle East and India, the performance was largely driven by high-margin pet supplements, with Zesty Paws growing 15.5% on an LFL basis.

Within the segment, pet supplements grew 12.7%, with revenue totaling RMB 396.2 million ($55M/€51M). On an LFL basis, supplement sales increased 16.3%.

China

The company says the slight revenue decline was driven by an expected drop in the PNC segment in Mainland China, as it shifts toward a localized supply chain. The transition, which addresses the significant impact of tariffs and higher inflation on US-made products, is expected to be completed by the end of 2026.

H&H adds that the initiative is expected to support Solid Gold’s growth in high-margin pet food and supplements through product innovation.

Jason Wang, the company’s Chief Financial and Operating Officer, notes that the transition is not expected to materially impact the business, as the China PNC segment accounts for less than 10% of total PNC revenue.

“In terms of percentage of total group revenue, it is less than 1%. For us, it is not moving the needle. We want to ensure the business has sufficient time to complete this portfolio optimization,” he said during the company’s earnings call.

North America

In the first 3 months of FY2026, the North American PNC segment increased 16.3%, driven by growth in the pet population as well as premiumization and humanization trends in pet nutrition, the company says.

Zesty Paws recorded 17.7% growth, supported by strong performance across Amazon and Chewy, as well as major retailers including Walmart, PetSmart, Petco, Tractor Supply, Target, Sam’s Club, CVS and Menards.

Meanwhile, following the completion of channel optimization efforts and a focus on premiumization, Solid Gold returned to growth, rising 7.3% on an LFL basis.

Company-wide performance

Overall, the group reported revenue of RMB 4.3 billion ($600M/€560M), representing a 34.4% YoY increase.

Growth was driven by the Adult Nutrition and Care and Baby Nutrition and Care segments, which benefited from the Chinese New Year holiday period and a temporary surge in demand for Biostime infant milk formula, following new industry developments in the first quarter.

The Adult Nutrition and Care segment generated RMB 1.93 billion ($270M/€250M) in revenue, up 26.3% YoY, while the Baby Nutrition and Care segment reported RMB 1.83 billion ($255M/€235M), marking a 60.9% YoY increase.

Outlook

For the PNC segment, the company says it will continue to focus on accelerating growth in its high-margin pet nutrition, food and supplements business to improve underlying profitability.

“In North America, Zesty Paws will continue to build on its leading position by advancing our omnichannel expansion and category innovation strategy. For Solid Gold, our priority remains to increase the contribution of high-margin products to improve the underlying growth rate and profitability over the course of 2026,” the CEO says.

For the whole group, Wang says the company maintains guidance for adjusted net profit at a mid-single-digit level and for reducing gross debt by at least RMB 700 million ($102.3M/€87.8M).