US: Costs hit Sara Lee profits
Sara Lee Corp. has become the latest food multinational to report cost pressures, with a rising raw material bill hitting first-quarter profits.
The US-based company, maker of brands including Hillshire Farm lunch meat and Sara Lee bread, posted a 1.5% fall in underlying operating income to US$254m for the three months to 29 September.
Sara Lee said the "slight decline" in underlying profits came amid "significant" rises in the cost of commodities, including wheat, poultry and pork.
On a brighter note, Sara Lee's turnover was up, with the company reporting a 4.5% rise in underlying net sales to $3.1bn.
Chairman and CEO Brenda Barnes said the company had upped marketing investment behind food products including Hillshire Farm and Jimmy Dean.
"Marketing and R&D spending increased significantly to develop and support new, innovative products that will be the bedrock for a successful fiscal 2008," Barnes said.
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