US: Sara Lee retail meat and bakery revenues rise
Sara Lee Corporation boosted its North American retail meat and bakery divisions in the third quarter of 2006, despite a 1% company sales slide to US$3.79bn impacted by currency conversions and the effect of dispositions net of acquisitions.
Net revenue increased by 6% to $607m at the North American retail meats group, while the retail bakery division's sales increased 5% to $449m, helped along by the addition of recently acquired Butter-Krust.
Sara Lee Foodservice reported net sales of $522m in Q3, an increase of 1% compared to the year-ago period.
Diluted earnings per share (EPS) at Sara Lee were $0.06 for the quarter, compared to $0.24 for the year-ago period - negatively impacted by $0.16 per share in net charges from the recognition of goodwill impairments, severance and other business transformation costs.
Sara Lee Corporation chairman and chief executive officer Brenda Barnes said: "Operating results were mixed this quarter with strong improvement in the base business of the North American meats and bakery segments, modest improvement at international beverage and another strong profit performance at branded apparel, offset by weakness at our household and body care, international bakery and foodservice businesses.
"While we are achieving the kind of underlying improvement we expect in a number of our segments, we have yet to reach our anticipated performance levels in our other segments, but we have plans in place to ensure we deliver improved results.
Sara Lee expects diluted EPS for the fourth quarter of fiscal 2006 to be within a range of $0.27 to $0.32, compared to a loss of $0.19 per share in the year-ago period. Full-year 2006 diluted EPS for the corporation are expected to be in a range of $0.98 to $1.03, compared to $0.90 in fiscal 2005.
The company is in exclusive negotiations with Smithfield Foods regarding the sale of the European meats business, and has made an agreement with PD Enterprise on sale of its UK-based private label apparel business.
Barnes added: "Across the company, we are encouraged by our continued progress toward our transformation goals and in our ongoing businesses. We are making great strides with our centralised procurement, IT and process improvement initiatives.
"At the same time, we continue to focus our portfolio, announcing sale agreements, completing dispositions and progressing toward the spin-off of Branded Apparel, Americas/Asia. We also are pleased to be moving forward with the sale process of our European Meats business by entering into exclusive negotiations with Smithfield Foods."
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