USA: Interstate Bakeries posts Q3 loss amid Atkins popularity
US wholesale baker Interstate Bakeries Corporation has reported a slightly narrower third-quarter net loss on a sales decline of around 2.5% due to lower bread consumption.
The company posted a net loss of US$6.6m, or 15 cents per share, for the third quarter to 6 March, compared to a loss of $6.7m, or 15 cents per share, for the year-ago quarter. Included in the quarter's results were restructuring charges of $1.4m, related to the closures and restructurings of bakeries and store locations, and a $3.0m charge related to the potential settlement of a securities class action that has been pending against the company since October 2003.
The company said a reduction in unit volume, along with its continuing challenge to deal with overcapacity and a high fixed cost infrastructure, was the primary driver in the quarter's loss. The unit decline was partially due to an industry-wide trend of declining white bread sales.
Third-quarter net sales were $1.02bn, down 2.5% from $1.05bn in the year-ago quarter.
"We believe the consumer drivers in today's market are convenience, value and health. In this quarter, the height of 'diet' season, we believe the 'health conscious' marketplace was specifically focused on seeking out low-carb alternatives," said IBC's CEO, James R. Elsesser.
"We see downward pressure across most sectors of our business, as do our competitors. As a result we are striving to better manage our costs, while preparing to introduce new products that appeal to today's consumer," he added.
During the third quarter the company introduced a line of low-carb breads, under the "Home Pride Carb Action" brand.
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