Sales gains failed to offset a drop in fourth-quarter profits at bakery giant Grupo Bimbo, which saw earnings fall by more than one-quarter in the last three months of the year.

In a regulatory filing, Bimbo said that fourth-quarter sales increased by 37%, boosted by organic growth, the acquisitions of Sara Lee's US and Spanish business and Fargo operations in Argentina. Sales rose to MXN41.62bn (US$3.24bn), the company said.

In contrast, the company booked a 26% decline in fourth-quarter net profit, which dropped to MXN1.01bn.

Bimbo blamed the fall on higher raw materials costs, integration expenses associated with  acquisitions and the depreciation of the Mexican peso. As a consequence, the group's gross margin fell to 51%, down from 51.9% in the year-ago quarter. Operating margin fell to 7% from 8.8%.

For the full year, Bimbo posted net profit of MXN5.33bn, down 1.2%. Net sales grew 14.1% in 2011 to MXN133.73bn.