Zoetis Stands by Guidance as Pet-Care Weakness and Competition Pressure Sales

Zoetis maintained its revised guidance for operational revenue declining 3% to 1%, citing weaker U.S. pet-care demand, fewer veterinary visits and intensified competition in dermatology and parasiticides.

The company is using targeted, time-limited promotions to defend market share rather than broadly cutting prices.

Apoquel retained about 87% U.S. share, while parasiticide share declined roughly 1% in the latest quarter.

Future growth opportunities include renal disease, oncology and livestock , with a potential renal treatment approval expected late next year and livestock revenue growing at a double-digit pace.

Zoetis NYSE: ZTS executives said the company remains confident in its previously issued guidance despite pressure in the U.S. companion-animal market, citing a weaker pet-care environment and intensified competition in dermatology and parasiticides.

Speaking at a Morgan Stanley conference, CEO Kristin Peck said the company’s revised operational revenue outlook of negative 3% to negative 1% reflects both industry conditions and company-specific competitive dynamics.

Zoetis had previously forecast operational revenue growth of 2% to 5%.

“For the first time, we saw a declining pet care market,” Peck said, pointing to lower veterinary visits and affordability challenges for pet owners.

She said parasiticides declined 6.7% industrywide, while demand has been stronger in diagnostic testing and products associated with specialty, urgent and critical care.

Peck characterized the company’s current pricing pressure as cyclical rather than structural.

Zoetis has not broadly reduced list prices for its key dermatology and parasiticide products, she said.

Instead, the company has used targeted, time-limited promotions and discounts intended to win business from customers using competing products.

“This isn’t everybody, 10% discount for anyone who wants to buy,” Peck said.

The company began many of those targeted programs in the second quarter and made them more aggressive in the third quarter after initial promotions did not deliver the desired results.

Peck said Zoetis will assess the programs each quarter and adjust their scope and intensity as needed.

She said the company is pleased with the early performance of the actions, while noting that competition can prompt responses from rivals.

Zoetis is seeking to protect market share, particularly in categories where it historically held dominant positions, while also using its broad product portfolio and pipeline to support relationships with veterinarians and corporate veterinary customers.

Jay Saccaro, Zoetis’ recently appointed CFO and COO, said he was attracted to the company by its leadership position, commercial capabilities and innovation pipeline.

After several weeks in the role, he said his initial observations have been “confirmatory,” including the strength of the company’s products and the engagement of its employees.

Saccaro said the company’s assumptions about market conditions are tracking as expected and that management remains confident in guidance.

Zoetis plans to update investors in November.

In parasiticides, Peck said Zoetis remains the U.S. market-share leader, with nearly twice the share of the next competitor.

The company’s share declined about 1% during the prior quarter, which she described as...