CHICAGO — Hillshire Brands Co. swung to a profit in the third quarter of fiscal 2013, reversing a loss of $3 million during the same quarter of the previous year.
For the quarter ended March 30, net income was $93 million, equal to 76c per share on the common stock. Income from continuing operations was $42 million, equal to 34c per share, up 52% from $27 million, or 23c per share, during the same period of the prior year.
Sales for the quarter fell slightly to $924 million from $935 million during the same quarter a year ago.
“We continue to make progress in executing our three-year plan, making strides in brand building, innovation and rigorous cost management,” said Sean Connolly, president and chief executive officer. “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 e.p.s. to be at the high end of our previous guidance.”
Economic challenges pressured the food service segment, where net sales declined 5% from the prior year’s third quarter. The company reported flat sales in the retail segment and a decline in frozen bakery, but volume and sales grew in the company’s meat-centric portfolio, buoyed by strong performances in Jimmy Dean breakfast sandwiches and bowls, Ball Park flame-grilled patties and artisanal brands Aidells and Gallo, offsetting a decline in Hillshire Farm lunchmeat.
“We saw a strong response where we increased our advertising investment in the quarter,” Mr. Connolly said. “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.”
During the first three quarters of fiscal 2013, net income declined to $211 million, or $1.72 per share, from $246 million, or $2.08 per share, during the previous year. On a continuing operations basis, income rose sharply to $149 million, or $1.22 per share, from $42 million, or 36c per share, the previous year.Sales for the first nine months of the year declined slightly to $2,958 million from $2,975 million during the previous year.