For the fourth quarter ended June 28, 2014, Hillshire reported operating income of $59 million compared to $49 million in the year ago quarter. Income from continuing operations was $27 million compared with $35 million a year ago.
"I am pleased with our results for fiscal year 2014, which culminated in a very strong fourth quarter,” said Sean Connolly, president and CEO. “Despite acute cost inflation, we delivered better than expected performance through a disciplined approach to brand building, pricing and cost management."
Retail net sales grew 8.5 percent on higher prices and volume growth. The company said new innovation and increased distribution helped drive volume growth. An effective advertising campaign advanced volume growth in Hillshire Farm lunchmeat. Jimmy Dean also had strong momentum fueled by growth in breakfast sandwich sales. Ballpark hotdogs continue to gain market share, and the Flame Grilled Patties delivered double-digit sales growth in the quarter, the company said. Also, the new Hillshire Farm Naturals and Farm Classics products are shipping into the market, and the new American Craft sausages outperformed distribution expectations.
Operating income in the foodservice segment grew $8 million on increased sales and continued cost management. Net sales advanced 16.7 percent on commodity-driven pricing and a favorable mix, which offset declines in volume, the company said.
Growth in the foodservice business has outperformed industry growth rates in both meat and bakery, the company reported. Sales in the convenience store channel have been strong as the new Jimmy Dean roller grill sausages continue to perform well.
"I am very proud of the entire Hillshire team and the terrific job they have done with our brands, Connolly said. We delivered against our goal of building a different kind of food company, one that is simultaneously innovative and lean. This approach has created significant value for our shareholders and a fulfilling work experience for our people."
In July, Springdale, Ark.-based Tyson Foods, Inc. entered into an agreement to acquire Hillshire Brands for $63 per share. The all-cash transaction, which includes debt, is valued at approximately $8.55 billion.
“We are excited to move forward with Tyson Foods,” Connolly said. “We have been working closely with the Tyson team to plan out the successful integration of the two companies and look forward to executing the merger.”