US: Charges push Sara Lee into the red
Sara Lee, the US-based food group, swung to a loss during its fiscal 2008 year thanks in the main impairment charges linked to its bakery businesses in North America and Spain.
The company today (7 August) booked a net loss of US$102m for the year to 28 June, compared to a net profit of $504m a year earlier.
Sara Lee had warned last month that impairment charges from its North American foodservice bakery unit and its Spanish bakery business would hit its bottom line. Costs linked to the write-down of other assets in North American also hit earnings.
Nevertheless, chairman and CEO Brenda Barnes insisted the company had had a "very good year". Sales rose 10.3% to $12bn thanks to the weak dollar, price hikes on its brands and higher volumes. Underlying sales growth stood at 4.6%.
Barnes pointed to the company's "strong" fourth quarter when sales rose 12.2% to $3.5bn. The impairment charges meant Sara Lee made a net loss during the quarter, although on an adjusted basis, operating income jumped 56.4% to $386m during the last three months of its fiscal year.
"We had a strong fourth quarter, with virtually every business segment delivering improved underlying business results," Barnes said. "We met the high-end of our full-year adjusted earnings per share outlook and exceeded our adjusted operating margin guidance. We also are very encouraged that the strength of our brands allowed us to offset the unprecedented levels of commodity and other input costs through pricing and helped deliver market share gains and increased operating margins."
Adjusted earnings per share from continuing operations reached $0.83 a share, compared to $0.77 in fiscal 2007. Adjusted operating margin for the full year stood at 8.1%.
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