Zoetis Inc. Q1 FY2026 earnings call

Kristen Peck mentioned headline numbers: organic operational revenue flat, adjusted net income grew 1%. International segment had 10% organic operational revenue growth, U.S. declined 8%. By species, livestock had 12% organic operational revenue growth, companion animal declined 4%. Outlined interconnected dynamics in companion animals: pricing in veterinary clinics rising slower, pet owners price sensitive, intensified competition, and no market expansion. Talked about OA pain, diagnostics strength in companion animals, livestock broad-based performance. Mentioned actions on multiple fronts: sharpening execution across core commercial levers, accelerating science-to-scale model, announcing acquisition of Neogen's animal genomics business, and sharpening capital allocation with cost and productivity program. Watney discussed quarterly performance reflecting converging dynamics, financial results, and segment results.

On an organic operational basis, revenue was flat and adjusted net income grew 1%. International segment delivered 10% organic operational revenue growth, U.S. declined 8%. Livestock delivered 12% organic operational revenue growth, companion animal declined 4% operationally. Global revenue was $2.3 billion, flat on organic operational basis. U.S. revenue $1.1 billion, declined 8%. International segment revenue grew 17% on reported basis and 10% on organic operational basis. U.S. companion animal posted $865 million, declined 11%. International companion animal reported $654 million in sales, growing 7%. International livestock contributed $495 million, with growth of 14%.

For full year 2026, on organic operational basis, expect revenue growth of 2% to 5% and adjusted net income growth of 2% to 6%. Q1 2026 had zero organic under new math, but guiding to low single to mid single digit growth for full year, with easier comps in second half and calendar switch benefits.

Factors like continued price sensitivity in pet owners, intensified competition across key pet care categories, lower clinic traffic, and potential impact of foreign currency, acquisitions, divestitures on growth.

Michael Riskin asked about near-term actions to turn ship around in face of competitive pressure and consumer challenges, and about bridging to full-year growth guidance. Erin Wright inquired about quarterly progression for companion animal, purchasing patterns, script denials. Brandon Vasquez asked if the market is entering a new less durable world. Chris Scott asked about pricing assumption and U.S. companion growth. John Block asked about channel impact in U.S. pet health and Zoetis' pricing strategy. Steve Deshaire asked about price sensitivity demographics and Lanivia's performance. Navon Tai asked about pricing strategy against competitive pressure and innovation. Daniel Clark asked about macro and competitive intensity impact and key DERM growth ex-US. Andrea Alfonso asked about margins trajectory and Neogen's inclusion in revenue growth outlook. Steve Scala asked about FTC approval of business development and product launch timelines.