This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Hillshire Brands Reports Solid Start To Fiscal 2014

Stocks in this article: HSH

Operating segment income declined by 27.8% versus a 45.5% increase in last year’s comparable quarter, primarily driven by higher input costs. MAP spend was lower than in the prior year’s first quarter, which reflects a modest marketing mix shift to more trade spend and slotting. SG&A costs, excluding MAP, increased versus an unusually low prior year comparable number.

Jimmy Dean grew volume and sales behind double-digit growth in breakfast sandwiches and grew share in the fast-expanding frozen protein breakfast category. Ball Park increased sales in the low single-digits with solid performance in hot dogs during the key grilling season and continued strong growth in flame-grilled patties. Aidells continued to be a strong performer for the company, driven in part by the new meatball innovations outperforming expectations.

Consistent with our expectations, effective promotional programs on Hillshire Farm lunchmeat re-engaged consumers, resulting in strong volume growth trends exiting the quarter.

Foodservice/Other

Net sales increased 5.7% from the prior year's first quarter versus a relatively easy comparable. The increase was driven by pass-through pricing to cover higher input cost inflation, as well as favorable mix and higher volumes. Excluding commodity meat sales, net sales increased 5.2%.

While the Foodservice/Other segment performed well in the quarter, the macroeconomic environment is expected to remain challenging, and the outlook for the segment remains modest.

Operating segment income was relatively flat to prior year as increased pricing fully offset higher input costs.

Corporate

Excluding significant items, corporate expenses for the quarter totaled $9 million. This includes $2 million of favorable mark-to-market gains.

Capital Allocation

During the first quarter, the company repurchased 300,000 common shares for approximately $10 million.

Consistent with its strategy to acquire on-trend brands, the company completed the previously-announced acquisition of the Golden Island jerky brand during the quarter.

Outlook

The company’s fiscal 2014 guidance remains unchanged at this time. For the full year, sales are expected to increase slightly as back-half innovation helps offset expected softness associated with consumers adapting to higher price points. Adjusted diluted EPS is expected to be flat to down mid-single digits as inflationary input costs are partially offset by pricing and cost savings programs. The company expects an effective tax rate of 35%, net interest expense of $40 million, and corporate expenses of approximately $60 million, excluding significant items.

2 of 7

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs