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Pricing Power, Tested in 2025Narrow moat

Abbott Laboratories (ABT) — moat facet

Abbott cut nutrition prices to win back volume in late 2025, an admission that its formula brands had reached the limit of their pricing power.

A brand moat is pricing power, and in 2025 Abbott's nutrition business found the limit of its own. Worldwide Nutrition sales fell 8.9% in the fourth quarter of 2025, with US pediatric sales down sharply, on "lower sales volumes compared to the prior year and new strategic price actions targeted to increase volume growth in the future"1.

Abbott Nutrition sales growth by quarter (%)-8.9Q4 2025-4.51H 2026-3.1Q2 2026Abbott Q4 2025 and Q2 2026 earnings releases; reported basis
Still falling, more slowly.

Price actions aimed at volume are price cuts. Abbott raised prices on formula for years and the volume eventually went elsewhere; in late 2025 it chose to give some of the price back.

The market noticed. Abbott's shares fell 10% on 22 January 2026, the day of the fourth-quarter results, after diagnostics and nutrition sales fell2.

The early results are mixed. Nutrition sales fell 4.5% reported in the first half of 2026 and 10.3% in the United States3, but rose $127 million in the second quarter from the first4. Abbott said the price actions, together with new products, were "contributing to improving performance"5.

The segment's earlier record shows pricing power that worked. Nutrition operating earnings rose from $1,333 million in 2023 to $1,505 million in 2024 and $1,558 million in 20256, while sales rose more slowly. That margin recovery was price, and it is what the late-2025 cuts gave back.

The fourth-quarter detail shows where the damage was. Nutrition sold $1,940 million, with US sales of $806 million down 13.2% and international sales of $1,134 million down 5.6%7. Abbott says it also "expects to increase volume growth with the launch of several new products in 2026"8, so the recovery plan rests on new products as much as on price. Abroad the picture is flatter: international Nutrition sales were unchanged on a reported basis in the first half of 2026 and down 1.9% comparable9.

For the brand to keep its narrow rating, volume has to follow price. By the fourth quarter of 2026 the price actions will be a year old, and negative Nutrition growth then is the verdict that they did not buy the customers back.

Moat trajectory: Narrowing

Nutrition -4.5% reported in 1H 2026; US -10.3%.

The number that tests this moat
Reported
Nutrition comparable sales growth, latest quarter
-3.6% (Q2 2026: $2,144M)

Whether the price actions are buying volume; still negative in Q4 2026 would mean they are not.

Source: Abbott Q2 2026 earnings release ↗
⚠ Threats to the moat
⚠ THREAT 01
Volume Bought Back at a Lower Margin
Abbott's Nutrition operating earnings fell 12.0% in Q2 2026 on sales down 3.1%, the cost of buying volume back with price.
References
  1. ReportedWorldwide Nutrition sales fell 8.9% in the fourth quarter of 2025, with US pediatric sales down sharply, on "lower sales volumes compared to the prior year and new strategic price actions targeted to increase volume growth in the future".
    Abbott Laboratories fourth-quarter and full-year 2025 earnings release, Form 8-K exhibit 99.1 - fourth-quarter sales by segment, the Nutrition decline and strategic price actions, continuous glucose monitor sales growth, adjusted EPS of $5.15, the Volt PFA approval and 2026 guidance. — FY2025 · publ. 22 January 2026 · source ↗
  2. ReportedAbbott's shares fell 10% on 22 January 2026, the day of the fourth-quarter results, after diagnostics and nutrition sales fell.
    Fierce Biotech, 23 January 2026 - Abbott shares down 10% on 22 January 2026 after fourth-quarter 2025 diagnostics and nutrition sales fell. — January 2026 · publ. 23 January 2026 · source ↗
  3. ReportedNutrition sales fell 4.5% reported in the first half of 2026 and 10.3% in the United States, but rose $127 million in the second quarter from the first.
    Abbott Laboratories second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - sales by segment and business, comparable growth, income statement, specified items, guidance and the 410th consecutive quarterly dividend - Nutrition sales and pricing actions. — Q2 2026 · publ. 16 July 2026 · source ↗
  4. ReportedNutrition sales fell 4.5% reported in the first half of 2026 and 10.3% in the United States, but rose $127 million in the second quarter from the first.
    Abbott Laboratories second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - sales by segment and business, comparable growth, income statement, specified items, guidance and the 410th consecutive quarterly dividend - Nutrition sales and pricing actions. — Q2 2026 · publ. 16 July 2026 · source ↗
  5. ReportedAbbott said the price actions, together with new products, were "contributing to improving performance".
    Abbott Laboratories second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - sales by segment and business, comparable growth, income statement, specified items, guidance and the 410th consecutive quarterly dividend - total sales, income statement, specified items, tax rate, guidance and the dividend. — Q2 2026 · publ. 16 July 2026 · source ↗
  6. ReportedNutrition operating earnings rose from $1,333 million in 2023 to $1,505 million in 2024 and $1,558 million in 2025, while sales rose more slowly.
    Abbott Laboratories Form 10-K for 2025 (year ended 31 December 2025) - consolidated financial statements: income, taxes, cash flow, dividends, repurchases, debt, goodwill and the critical accounting policy on rebates. — FY2025 · publ. 20 February 2026 · source ↗
  7. ReportedNutrition sold $1,940 million, with US sales of $806 million down 13.2% and international sales of $1,134 million down 5.6%.
    Abbott Laboratories fourth-quarter and full-year 2025 earnings release, Form 8-K exhibit 99.1 - fourth-quarter sales by segment, the Nutrition decline and strategic price actions, continuous glucose monitor sales growth, adjusted EPS of $5.15, the Volt PFA approval and 2026 guidance. — FY2025 · publ. 22 January 2026 · source ↗
  8. ReportedAbbott says it also "expects to increase volume growth with the launch of several new products in 2026", so the recovery plan rests on new products as much as on price.
    Abbott Laboratories fourth-quarter and full-year 2025 earnings release, Form 8-K exhibit 99.1 - fourth-quarter sales by segment, the Nutrition decline and strategic price actions, continuous glucose monitor sales growth, adjusted EPS of $5.15, the Volt PFA approval and 2026 guidance. — FY2025 · publ. 22 January 2026 · source ↗
  9. ReportedAbroad the picture is flatter: international Nutrition sales were unchanged on a reported basis in the first half of 2026 and down 1.9% comparable.
    Abbott Laboratories second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - sales by segment and business, comparable growth, income statement, specified items, guidance and the 410th consecutive quarterly dividend - Nutrition sales and pricing actions. — Q2 2026 · publ. 16 July 2026 · source ↗
Sources
Generated October 6, 2026