VEVEY, SWITZERLAND — Purina PetCare’s science-based and premium offerings drove another quarter of sales growth for Nestlé, as reported in the company’s first quarter earnings call on April 22. 

Three-month sales for Purina totaled 3.62 billion Swiss francs ($3.96 billion USD), up 3.4% from its first quarter 2020. Reported organic growth for the pet segment was 8.7%, real internal growth was 7.7% and pricing improved 1% over the quarter.

Purina remains Nestlé’s second-most profitable business segment, trailing powdered and liquid beverages by roughly 2.2 billion Swiss francs ($2.4 billion) in sales. 

“Purina PetCare delivered mid-single-digit growth with continued momentum in e-commerce and premium brands, particularly in wet cat, snacks and veterinary products,” said François-Xavier Roger, executive vice president and chief financial officer, in the company’s earnings call.

Overall, the company reported first quarter sales of 21.1 billion Swiss francs ($23.1 billion), up 1.3% from year-ago sales. Revenue was offset by foreign exchange rate impacts, which lowered sales by 5.3%, and net divestiture impacts that brought sales down another 1%.

“We are pleased to report an exceptionally strong quarter to you today,” said Mark Schneider, chief executive officer. “In a nutshell, we saw a rebounding level of business in China-based on a very low level of comparison last year, gradual recovery in our out-of-home business and continued strong demand for retail and in-home consumption around the world.”

Note: Swiss franc to USD conversions are based on April 23 exchange rates.

Organic growth for the company was recorded at 7.7% in the first quarter, including real internal growth of 6.4% and pricing improvements of 1.2%.

“Overall, the acceleration in organic growth in the first quarter was driven by four main reasons,” Roger said. “Early signs of recovery in out-of-home channels, increased contribution from pricing reflecting input cost inflation, further market share gains across most categories, particularly in coffee and pet food, and finally, a rebounding level of business in China due to a low base of comparison last year.”

According to Nestlé, science-based and premium Purina PetCare products led high single-digit sales growth for the segment, including Pro Plan, ONE and Felix brands.

“PetCare continued to see outstanding growth, supported by e-commerce, strong demand for science-based products and the expansion of innovative business models with, Lily's Kitchen and Terra Canis,” Roger said.

Roger also noted that, Lily’s Kitchen and Terra Canis have been “important growth drivers” for Nestlé’s digital pet care offerings. 

The company’s pet segment was part of “broad-based market share gains” in North and South America, alongside its coffee, dairy and Infant Nutrition businesses. Purina saw mid-single-digit growth in North America, powered by “strong momentum” in e-commerce and select brands including Pro Plan, ONE and Fancy Feast.

Merrick Pet Care, which is owned by Nestlé Purina PetCare, also grew in North America resulting from its recent Healthy Grains product launches.

In Latin America, Purina Petcare saw double-digit sales growth, Nestlé reported.

“Our performance in PetCare was robust, with particular strength for Dog Chow,” Roger said, referring to the segment’s performance in Zone Americas. 

Overall, Nestlé’s Zone Americas (AMS) reported net sales of 8.2 billion Swiss francs ($9 billion), down 1.2% from its first quarter 2020. 

The company reported net sales of 5.2 billion Swiss francs ($5.7 billion) for its Zone EMENA — which includes Europe, the Middle East and North Africa — down 2.1% from year-ago sales. Purina’s strong e-commerce sales and new product launches drove double-digit gains in the first quarter for this region as well. 

Increased pet segment sales in Zone EMENA were driven by Pro Plan, ONE, Felix, and Lily’s Kitchen.

Nestlé’s Zone Asia, Oceania and sub-Saharan Africa (AOA) grew sales by 2.3% to 5.1 billion Swiss francs ($5.6 billion) over the first quarter, led by market share gains in pet food and coffee.

Sales of Purina Pro Plan and veterinary products drove strong growth for the segment in China, the company reported. 

Nestlé reaffirmed its full-year guidance, which expects organic sales growth in the mid-single-digits, moderate improvement to underlying trading operating profit margin, and increased underlying earnings per share.

“We are pleased with Nestlé’s strong organic sales growth in the first quarter, building on broad-based contributions from most geographies and product categories,” Schneider said. “Our growth was fueled by disciplined execution, enhanced digital capabilities and rapid innovation, resulting in further market share gains. Retail sales saw solid growth and out-of-home channels saw signs of improvement.”

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