Fine dining for Fido
Pet food maker Blue Buffalo is hoping to cash in on pet owners wining and dining their cats and dogs.
Spending on pets is estimated to hit a record $69 billion in the U.S. this year, according to a pet-products industry group. Driving that growth: high-end, premium pet food and treats.
Blue Buffalo calls its products “super-premium” and says they are made with “natural” meats that are better in quality than what’s in traditional pet food.
But its shares trade below where they closed on the day the company went public in 2015.
Blue Buffalo hopes to pump up sales by expanding from selling online and in pet stores to mass-market chains, where Americans buy most of their pet food. This month, some of its cheaper products became available in Target and three grocery store chains. It expects to add more retailers.
Wall Street is optimistic. “Blue Buffalo had the best placement of any pet food brand in Target,” JPMorgan said in a research note. And in recent weeks, Wall Street analysts have increased overall sales forecasts for 2018.
Pampered pets: Blue Buffalo hopes to increase sales by making their “super-premium” products available to customers who shop at mass-market chains.
$1.5 billion 1.0 0.5 0.0 ’14
Net income ’15 ’16
Sales ’17* ’18* 50% 40 30 20 10 0 -10 -20
Net income growth ’14 ’15 ’16
Sales growth ’17* ’18* Source: FactSet *estimated Tali Arbel; Alex Nieves • AP