Hillshire Brands on Track07 May 2013
US - The Hillshire Brands Company has reported earnings for the third quarter and first nine months of fiscal 2013, saying that it is on track in the first year of its three-year plan.
In its quarterly report, Hillshire Brands' net sales fell slightly, driven by a decline in the Foodservice/Other segment. Adjusted operating income declined 12.9 per cent on planned increases in MAP and SG&A; reported operating income increased 18.8 per ceny.
Adjusted diluted EPS of $0.35 was better than anticipated and down 14.6 per cent, while reported diluted EPS of $0.34 was up 47.8 per cent.
Fiscal 2013 adjusted diluted EPS is expected to be at high end of previous guidance range of $1.60 to $1.70.
Sean Connolly, president and chief executive officer of The Hillshire Brands Company, commented: "We continue to make progress in executing our three-year plan, making strides in brand-building, innovation and rigorous cost management.
"We saw a strong response where we increased our advertising investment in the quarter. We also continued to build out our innovation pipeline. On the cost side, we have now identified opportunities to exceed the $100 million savings target we announced at our investor day in June. These initiatives will provide additional support for our growth strategy and further strengthen our confidence that we will deliver our mid-term targets.
"Our efforts to stabilize challenged businesses also progressed, but clearly our work here is not done. Overall, we are pleased with our efforts to date. In fact, we now expect full year EPS to be at the high end of our previous guidance," added Mr Connolly.
For third-quarter continuing operations results, net sales declined slightly, driven by a decline in the Foodservice/Other segment. MAP investment increased to 4.2 per cent of revenue versus 3.4 per cent in the prior year's third quarter. Operating income was also impacted by planned increases in SG&A as transition service agreements expired and the company approached targeted staffing levels.
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