The Hillshire Brands Company (NYSE: HSH) today reported results for the second quarter and first six months of fiscal year 2014.
- Second quarter net sales increased 2.1% to $1.1 billion
- Adjusted 1 operating income of $139 million, up 9.0%; reported operating income increased 16.9% to $116 million
- Adjusted diluted EPS of $0.66, up 6.5%; reported diluted EPS from continuing operations of $0.91 up 93.6%
- Fiscal 2014 adjusted diluted EPS now expected to be near the high end of the previous range
“I’m pleased to report a strong second quarter,” said Sean Connolly, president and chief executive officer of The Hillshire Brands Company. “Despite significant input cost inflation, both sales and profit exceeded our expectations. This reflects the strong ongoing progress our team is making to build our brands and improve our cost efficiencies. We are now well into the second year of our plan and achieving our goal of delivering strong and sustainable shareholder returns.”
“During the quarter, we implemented pricing actions on the businesses most affected by inflation. Encouragingly, the volume impact we saw was more modest than expected, with most consumers remaining loyal to our brands. The associated benefit, along with strong supply chain productivity and timing of expenses, enabled us to deliver strong performance on the bottom line.”“As we’ve moved into the second half, our pricing actions have become more broad-based. This reflects our revised expectation of significantly higher input cost inflation throughout the remainder of the fiscal year. We’ve also increased our investment plans for second-half MAP to further support our core brands and exciting new innovations.” “Given this strong first-half performance will be partially offset by our higher second-half investment plans, we now expect EPS to be near the high end of the previously provided guidance range. We also continue to expect sales for the full year to increase slightly, despite the near-term volume pressure we anticipate from additional pricing.”