Canadian food company George Weston has reported lower quarterly earnings, due to a poor performance by its Weston Foods division.
The company posted net earnings of C$121m (US$87.2m), or 88 cents per share, for the first quarter to 27 March, compared to earnings of $134m, or 96 cents per share, for the same period of the previous year.
The decrease in earnings was attributed to the decline in operating results for the Weston Foods operating segment, including the negative impact of foreign currency translation due to the strengthened Canadian dollar relative to the US dollar.
Sales increased 2.9% to $6.6bn for the quarter, including the negative impact of approximately 2% due to foreign currency translation of the Weston Foods operating results. Sales were impacted positively by the 5.6% sales increase achieved by the food distribution dvision, operated by Loblaw. Operating income increased slightly to $344m for the first quarter of 2004, compared to $342m in 2003.
“Weston Foods continues to produce sales and operating income growth in Canada. The current consumer trend away from traditional white flour based bakery products, the difficult food retail environment in the United States, and the ongoing industry-wide cost pressures from higher commodity, energy and employee related costs are expected to continue to negatively impact sales and earnings growth for Weston Foods as the year progresses,” the company said.