Hillshire Brands' portfolio contains several category leaders. If brand investment and innovation objectives prove successful, sales growth and margin expansion targets should be achievable.
Previously, Sara Lee operated several businesses with little overlap, which made for difficult capital allocation. Hillshire's more focused business should allow the firm to allocate capital more effectively and improve returns.
Given its portfolio of leading brands, we think Hillshire's assets may be attractive to other CPG firms and meat processors, as well as potential private equity suitors. Read more
Although Hillshire operates a portfolio of well-known brands, it competes in a number of categories in which price is still a primary factor influencing purchase decisions.
Retail consolidation could shift negotiating leverage away from food manufacturers in favor of retailers, which could hurt the firm's ability to expand margins over the long term.
The management team, which contains several outsiders, plans to significantly change Hillshire's business strategy. If the firm is unable to execute its plans, profitability could suffer over the next few years. Read more
A number of new faces have joined Hillshire Brands. Sean Connolly, named CEO in January 2012, worked in various roles at Campbell Soup and Procter & Gamble before joining Hillshire Brands. We think his previous tenure at leading branded consumer Read more
Hillshire Brands manufactures and distributes value-added and commodity meat products, with a brand portfolio that includes Hillshire Farms, Jimmie Dean, Sara Lee, Ball Read more