Hillshire Brands finished out a strong fourth quarter for fiscal year 2014, reporting net sales growth of 10.7 percent and adjusted operating income growth of 18.8 percent. Net sales for the full fiscal year grew 4.2 percent, while the adjusted operating income improved 6.5 percent, the company announced on August 13.
The meat products company noted that the sales growth rate in the fourth quarter benefitted from a soft quarter in 2013 and the later timing of the Easter holiday in 2014.
"I am pleased with our results for fiscal year 2014, which culminated in a very strong fourth quarter,” said Sean Connolly, president and chief executive officer of The Hillshire Brands Company. “Despite acute cost inflation, we delivered better than expected performance through a disciplined approach to brand building, pricing and cost management."
"I am very proud of the entire Hillshire team and the terrific job they have done with our brands. We delivered against our goal of building a different kind of food company, one that is simultaneously innovative and lean. This approach has created significant value for our shareholders and a fulfilling work experience for our people."
Hillshire Retail segment sees sales growth
Retail net sales for Hillshire Brands grew 8.5 percent in the quarter versus the prior year as price/mix and volume were both favorable.
Volume growth was driven by new innovation and increased distribution, and also benefited from a soft quarter in the prior year. Operating segment income increased 25.1 percent versus the prior year as increased sales and cost efficiencies more than offset higher input costs.
Hillshire Farm lunchmeat showed strong base volume growth behind an effective advertising campaign. New Hillshire Farm Naturals and Farm Classics products are shipping into the market, and the new American Craft sausages are outperforming distribution expectations. Jimmy Dean continued its strong momentum in the quarter, fueled by breakfast sandwich growth. The new Jimmy Dean lunch and dinner offerings have been well-received by retailers and consumers as distribution expands. Ball Park hot dogs continued to gain share during grilling season, and Flame Grilled Patties showed strong double-digit sales growth in the quarter, the company reported.
Foodservice/Other segment performs well
Net sales for the Foodservice/Other segment increased 16.7 percent in the fourth quarter as commodity-driven pricing and favorable mix offset volume declines.
Operating segment income in the quarter grew $8 million versus the prior year’s fourth quarter behind increased sales and continued cost management.
The Foodservice business has been outperforming industry growth rates in both meat and bakery. Sales in the convenience store channel have been strong as the new Jimmy Dean roller grill sausages continue to perform well, Hillshire reported.
Tyson Foods proposed acquisition of Hillshire expected to close by September 27
Hillshire Brands in July entered into a definitive agreement with Tyson Foods, under which Tyson will acquire all outstanding shares of Hillshire Brands for $63 per share. On August 12, 2014, each of Tyson and Hillshire Brands received a request for additional information on the proposed Tyson-Hillshire merger, each often referred to as a “second request,” from the Antitrust Division of the Department of Justice.
Tyson and Hillshire Brands continue to expect that the transaction, which remains subject to customary closing conditions, will be completed by September 27, the final day of Tyson Foods’ fiscal year
"We are excited to move forward with Tyson Foods. We have been working closely with the Tyson team to plan out the successful integration of the two companies and look forward to executing the merger," said Connolly.