The company’s full-year fiscal 2012 results from continuing operations showed a 4% increase in adjusted net sales to $4.40bn (up 1.9%), while adjusted operating segment income decreased by 4.7% and operating segment income decreased by $351m. MAP spend was up 11% for the year.
Hillshire CEO Sean Connolly praised the team for delivering “solid” results in difficult times and in a difficult operating environment. He said: “We are just beginning to see the impact of our plan to strengthen our core business. Our volumes have stabilised and performance across our key brands has improved. With our senior leadership team now largely in place, our entire organisation is focused on driving growth and innovation while continuing to manage costs.”
Retail sales saw strong growth of 5% in Q4, with sales of Flame Grilled Patties exceeding expectations and increased MAP spend in Q4 helping Ball Park Hot Dogs perform strongly, the company said. However, the timing of Easter drove the volume of organic products down by 1%.
Hillshire’s Jimmy Dean business also saw strong sales, driving by high distribution of the Meat Lover’s Bowl, which was launched in Q3. Aidells, according to the company, saw adjusted operating segment income rise by 3.7%, which was primarily driven by positive pricing on commodities and the inclusion of a full quarter of Aidells performance.
Q4 in the foodservice segment saw sales decline by 1.2%, with the meats business outperforming the bakery business. According to Hillshire, the meats business benefited from an increased convenience store sales, while the bakery business was unfavourably impacted by disruptions from plant upgrades.
Looking ahead, management at Hillshire said the fiscal outlook for 2013 was for “modest” commodity deflation, while adjusted operating segment income is expected to be flat and the benefits of “significant” cost reductions will not fully offset inflation.
Connolly described fiscal 2013 as a “transition year”, during which the company will continue to drive execution of a three-year plan. “We are committed to taking the necessary actions to deliver strong and sustainable shareholder returns. Looking forward, the launch of our new advertising, beginning in the first quarter, followed by the introduction of new and improved products and packaging later in the year are important steps in supporting our objectives,” he said.
However, despite a Q4 increase of $1.02bn in net sales, Hillshire reported a decrease in adjusted operating segment income of 3.1% to $100m, as well as a decline in reported operating segment income of 0.4% to $76m.
