Fine din­ing for Fido

The Oklahoman (Sunday) - - EXTRA -

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

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