Hillshire Brands Posts Strong Results To Start Fiscal Year 2013

The Hillshire Brands Company (NYSE: HSH) today reported earnings for its first quarter of fiscal year 2013.

First Quarter Highlights (continuing operations)
  • Adjusted 1 diluted EPS increased by $0.19 to $0.51; reported diluted EPS increased $0.31 to $0.41
  • Adjusted net sales increased by 2% to $1.01 billion; reported net sales declined 1.4%
  • Adjusted operating income increased 76.3% to $105 million; reported operating income increased $60 million to $87 million
  • Strong performance in the Retail segment, with sales growth of 3% and adjusted operating segment income growth of 45.5%

CEO Perspective

“I am very pleased with our first quarter performance,” said Sean Connolly, chief executive officer, The Hillshire Brands Company. “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.”

He added, “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 August 9, remains unchanged at this time.”
 
Key Financial Data, Continuing Operations
$ in millions, except per share
First Quarter
2013   2012   % Change
Adjusted Net Sales $ 1,011 $ 991 2.0 %
Reported Net Sales 1,011 1,025 (1.4 )%
 
Adj. Operating Income 105 60 76.3 %
Rep. Operating Income 87 27 NM
 
Adj. Diluted EPS 0.51 0.32 59.4 %
Rep. Diluted EPS 0.41 0.10 NM
 

Discussion of Continuing Operations Results

The company posted increases in adjusted net sales and adjusted operating income versus the first quarter of fiscal 2012. Higher adjusted net sales, coupled with lower expenses, including deflationary commodities, actions taken to lower SG&A costs, and lower variable costs, drove higher adjusted operating income.

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