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Hillshire Brands Sees Rise in Sales and Income

07 February 2013

US - For the second consecutive quarter, Hillshire Brands, the spin off from the split in the Sara Lee business, posted increases in adjusted net sales and adjusted operating income compared to the previous year quarter.

Hillshire Brands reported an increase in net sales for the second quarter of the year to $1.06 billion.

Adjusted operating income increased by $26 million to $127 million and reported operating income increased by $76 million to $99 million.

"Our business is continuing to perform well and I am very pleased with the progress we're making," said Sean Connolly, president and chief executive officer.

"Our investment in MAP is strengthening our core brands, our innovation pipeline is becoming more robust, and we remain highly focused on managing costs. We also clearly benefited from favourable input costs, an area that we expect to become more challenging in calendar year 2013.

"Based on our strong first half results, and taking into account our outlook for the rest of the year, we are raising full year EPS guidance."

Net sales in the Retail segment increased by 2.2 per cent over the same quarter for the previous year behind higher volumes and favourable mix.

Strong performance in Jimmy Dean sandwiches, Aidells, and Hillshire Farm lunchmeat fuelled the volume gains in the quarter. Hillshire Farm seasonal items also performed well.

Additionally, Hillshire Farm lunchmeat's packaging improvements and product quality enhancements are on track to roll out in the third quarter.

Adjusted operating segment income increased by 23.2 per cent and reported operating segment income increased by 31.5 per cent. Lower input costs were a significant contributor to the increased profit.

Higher sales also contributed to earnings growth. In line with the company's growth strategy, MAP investment for the quarter was meaningfully increased from the prior year.

The Foodservice/Other segment reported solid results, with increased net sales of 2.8 per cent behind volume gains in both commodity meats and Foodservice meats. In Foodservice bakery, volumes declined but showed signs of stabilisation.

Adjusted operating segment income increased by 8.5 per cent and reported operating segment income decreased by 4.1 per cent. The increase in adjusted operating segment income resulted from higher volume and lower commodity input costs.

These gains were partially offset by negative mix from high commodity meat sales and higher bakery production costs.

TheMeatSite News Desk

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