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.

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