Momentum in Pet Business: A Catalyst for CL's Growth Phase?

Core Insights - Colgate-Palmolive Company's (CL) pet care business is a core strength and provides a competitive edge as demand for high-quality pet products and services rises in the growing pet industry [1][10] - The company is expanding its presence in the pet industry through comprehensive pet care solutions, particularly with its Hill's Pet Nutrition segment, which focuses on premium, veterinarian-led pet food [2][10] - Hill's Pet Nutrition competes globally and has delivered significant sales, contributing about 23% to overall quarterly sales in Q1 2025 [4] Company Strategy - Colgate's Hill's Pet Nutrition offers products under two labels: Hill's Science Diet for everyday nutritional needs and Hill's Prescription Diet for therapeutic pet foods [3] - The company plans to enter the fresh pet food market to further enhance its pet segment [2][10] - Colgate has agreed to acquire Care TopCo Pty Ltd, owner of the Prime100 pet food brand, to strengthen its position in the pet business [3] Competitive Landscape - Key competitors in the pet market include Tractor Supply Company (TSCO), Chewy, Inc. (CHWY), and Central Garden & Pet Company (CENT) [6] - TSCO adopts a multi-channel approach and has a loyalty program to enhance customer engagement, while Chewy focuses on e-commerce and technology upgrades to improve online sales [7][8] - CENT is recognized for its innovative solutions in the pet and garden spaces, offering a wide range of pet supplies [9][11] Financial Performance - In Q1 2025, Hill's Pet Nutrition segment achieved sales of $1.1 billion, with an expected year-over-year growth of 1.3% in 2025 [4] - Colgate's shares have gained 2.6% year-to-date, outperforming the industry's growth of 0.7% [12] - The forward price-to-earnings ratio for Colgate is 24.40X, compared to the industry average of 20.77X [13] Earnings Estimates - The Zacks Consensus Estimate for Colgate's EPS indicates year-over-year growth of 1.4% for 2025 and 7.3% for 2026, with stable estimates for 2025 and an upward revision for 2026 [14][15]