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Hillshire Brands Outlines Strategic Growth Priorities At Barclays Conference

Stocks in this article: HSH

The Hillshire Brands Company (NYSE: HSH) today presented at the Barclays Back-to-School Consumer Conference in Boston, MA and provided an overview of the company’s three-year strategic plan for generating profitable growth.

“We are confident that our portfolio of leading retail brands presents significant untapped potential for profitable growth in the large and growing meat-centric meals and snacks markets,” said Sean Connolly, chief executive officer, Hillshire Brands. “With an experienced senior leadership team now in place, we are focused on executing our strategic plan to drive long-term growth and profitability though brand-building and margin-accretive innovation. Ultimately, we believe these efforts will create significant value for our shareholders.”

Strategic Priorities and Plan

Hillshire Brands’ key strategic priorities center on strengthening the company’s core brands, expanding into adjacencies and augmenting the strength of its portfolio through selective acquisitions. The company’s core brands – Hillshire Farm, Ball Park, Jimmy Dean, State Fair, Aidells and Gallo – form a leading platform for delivering differentiated, value-added products to consumers. The company anticipates introducing innovative new line extensions and product upgrades to further enhance its portfolio. The company is also firmly committed to supporting its products through greater marketing, advertising and promotion (MAP) spend as it seeks to expand revenue from new innovations¹ to between 13% and 15% of total revenue by fiscal 2015; up from historic levels of 9% of revenue.

Connolly described the company’s three-year plan with the words fix, drive and expand, which characterize Hillshire’s focus in fiscal 2013, 2014 and 2015, respectively. "This year, we are already seeing progress against our plans, and continue to work aggressively to strengthen the challenged portions of our portfolio like lunchmeat and foodservice bakery," continued Connolly. “As a transition year, the initiatives we pursue in 2013 will strengthen our brands, reduce costs and fill our innovation pipeline. We are fully committed to making these investments as we position Hillshire Brands to achieve our targets for 2015 and beyond.”

Financial Outlook

Maria Henry, chief financial officer of Hillshire Brands, provided additional financial perspective on the company. She announced that the company had adjusted diluted EPS for continuing operations of $1.47² for fiscal 2012 versus $1.20 for fiscal 2011, and on a reported basis, ($0.18) for fiscal 2012 versus $0.45 for fiscal 2011. Henry reiterated fiscal 2013 guidance of net sales in line with fiscal 2012, and adjusted EPS in the range of $1.40 and $1.55.

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