Sara Lee, the US food group, today (4 February) lowered its sales and earnings forecasts for 2009, just as larger rival Kraft Foods trimmed its own targets.
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Sara Lee, which posted a second-quarter net loss of US$17m for the three months to 27 December, said it now expects adjusted earnings per share to reach $0.73-0.80 during its fiscal 2009 period. The revised guidance compares to an earlier forecast of $0.77-0.84.
The company, which makes brands including its namesake bread and Hillshire Farm hot dogs, also cut its full-year sales forecast. Sara Lee estimates that net sales will reach $12.8-13bn, down from $13-13.3bn.
A further downward revision came in the form of full-year operating profit from continuing operations. Sara Lee cut the estimate by $229m to $917-957m.
The revised targets came as Kraft Foods also cut its sales and profit forecasts for 2009.
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By GlobalDataLooking at Sara Lee’s second-quarter numbers, net sales fell 2% to $3.3bn. An 8.4% rise in North American retail sales and a 10.6% jump in fresh bakery sales on the continent was offset by lower international sales.
Sara Lee said its sales overseas were hit by foreign exchange and lower volumes as the downturn hit key European markets.
Second-quarter adjusted net sales increased 4.2%, driven by sales growth from Sara Lee’s three North American businesses and its international beverage operations. Adjusted net sales exclude acquisitions, disposals and present fiscal 2008 net sales at fiscal 2009 foreign currency exchange rates.
“Despite challenging economic times, our North American businesses continued their strong performance in the second quarter,” said Sara Lee chairman and CEO Brenda Barnes.
“In our international businesses we are adjusting our plans and refocusing our resources to help offset significant economic downturns in many of our key markets, most notably Spain, France and the United Kingdom. I have no doubt that we will weather these difficult times abroad and continue to deliver strong growth over time in these high-margin businesses.”
Second-quarter operating income reached down $33m, down from $231m a year earlier due in part to a goodwill write-down in Sara Lee’s North American foodservice beverage business and other restructuring charges. Excluding these one-off items, adjusted operating income dipped 7.6%.
For the first six months of fiscal 2009, Sara Lee’s operating income was $386m, compared to $524m in the first six months of fiscal 2008 – a decline of 26.4%. Adjusted operating income decreased 5.9%.
Half-year sales rose 3.5% to $6.7bn; adjusted net sales climbed 5%. Net income tumbled from $382m a year ago to $213m.
Sara Lee shares were down 5.18% at $9.89 at 11:40 ET today.
