Hill's (13% of Company Sales)
Hill's Net sales grew 2.0% during fourth quarter 2011. Unit volume decreased 1.5%, pricing increased 3.0% and foreign exchange was positive 0.5%. Volume gains in Russia and Brazil were offset by declines in the U.S. and Japan. Hill's organic sales increased 1.5% during the quarter.
Hill's Operating profit increased 4% in fourth quarter 2011 to $152 million, or 27.0% of Net sales. This increase in Operating profit as a percentage of Net sales was due to a decrease in Selling, general and administrative expenses as a percentage of Net sales, partially offset by a decrease in Gross profit as a percentage of Net sales. The decrease in Gross profit as a percentage of Net sales was due to higher raw and packaging material costs reflecting global commodity cost increases, partially offset by cost savings from the Company's funding-the-growth initiatives and higher pricing. Selling, general and administrative expenses decreased as a percentage of Net sales due to lower advertising expenses as a percentage of Net sales.
Recent new product introductions contributing to sales in the U.S. include Science Diet Ideal Balance Canine, which combines natural ingredients with the power of advanced nutrition in one balanced package, Science Diet Savory Stew Canine, Science Diet Age Defying Feline (11 years plus), Prescription Diet y/d Feline Thyroid Health and the relaunch of Prescription Diet c/d Multicare Feline Bladder Health with evidence of improved efficacy and taste.
New pet food products contributing to international sales include reformulated Prescription Diet r/d Canine and Feline, the relaunch of Prescription Diet c/d Multicare Feline Bladder Health with evidence of improved efficacy and taste, Science Diet Mature Adult Light Canine and Feline, and reformulated Science Plan Adult Feline.
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