Question · Q3 2025
Michael Riskin from Bank of America pressed on the reasons for the significant shift in Zoetis's companion animal outlook, questioning why the company, historically insulated from vet challenges, is now more impacted by macro and vet dynamics, and whether competition plays a larger role. He also asked for an update on distributor inventory levels.
Answer
CFO Wetteny Joseph clarified that while overall vet visits have been down historically, the key difference is a three-quarter decline in therapeutic visits for dermatology and OA pain, directly impacting new patient starts. He highlighted that alternative channels, including home delivery, continue to show strong growth (21% in the quarter), partially offsetting clinic softness. Joseph also mentioned the impact of significant price increases by vet customers. He confirmed that distributor inventory levels, while dipping mid-quarter, recovered to remain below the historical low end by quarter-end.