Hillshire Brands turns 1Q profit

by Meat&Poultry Staff
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DOWNERS GROVE, Ill. – Hillshire Brands Co. posted net income from continuing operations of $51 million in the first quarter ended Sept. 29, equal to 29 cents per share on the common stock, up from $12 million, or 10 cents per share, in the same period a year ago.

Including discontinued operations, net income in the first quarter of fiscal 2013 was $53 million, or 43 cents per share. This compared with a loss of $220 million in the first quarter of fiscal 2012, when the company was known as Sara Lee Corp. Last year’s results included a $322 million loss from discontinued operations, which included the sale of the majority of its North American Foodservice coffee and tea operations to The J.M. Smucker Company.

Total sales for the quarter were $1,011 million, down 1.4 percent from $1,025 million in the same period a year ago. Total adjusted sales were $1,011 million, up 2 percent from $991 million.

“I am very pleased with our first-quarter performance,” said Sean Connolly, chief executive officer. “Our volumes are moving in the right direction, our key brands are gaining strength, our costs are coming down and our team is markedly stronger. Overall, we are off to an encouraging start against our three-year plan to build a consistently growing and more profitable branded food company.

“While we are pleased with this progress, we recognize that we are only one quarter into our year. We want to wait for greater visibility into the cost picture and see our momentum continue to develop further before making any changes to our outlook. Accordingly, our full year guidance, given on Aug. 9, remains unchanged at this time.”

Operating income within the company’s Retail segment totaled $86 million in the first quarter, up 97 percent from $44 million in the same period a year ago. Net sales in the segment increased 3 percent to $719 million.

Hillshire said Jimmy Dean turned in double-digit sales growth during the quarter, while Ball Park posted solid top-line growth. Aidells also delivered strong double-digit growth, the company said.

Operating income within the Foodservice/Other unit was flat at $25 million, while net sales fell 13 percent to $255 million. Hillshire said Foodservice Bakery struggled as industry trends for dessert consumption continued to decline and as the business was adversely affected by the lingering negative effects following plant upgrades at the company’s Tarboro, NC, facility.

The company’s Australian Bakery segment posted operating income of $3 million, up 10 percent from $2 million a year ago. Net sales eased 2 percent to $37 million, reflecting the closing of a number of outlet stores and the exiting of an unprofitable private label business.

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