Canadian food company George Weston has reported lower quarterly earnings, which the company attributed to a decline in the operating performance of its US bakery unit, Weston Foods.
The company posted net earnings of C$140m (US$105.5m), or $1.04 per share, for the second quarter to 19 June, compared to $193m, or $1.42 per share, in the year-ago period.
Sales increased 2.9% to $7.0bn for the quarter including a negative impact of approximately 1.3% due to foreign currency translation of the Weston Foods operating results. The company’s Loblaw food distribution unit achieved a 4.7% rise in quarterly sales. Weston Foods’ sales declined 5.3%.
George Weston said the outlook for the remainder of the year for food distribution is for continued good net earnings growth and strengthening growth in sales.
“The current consumer trend away from traditional white flour based products and the ongoing cost pressures from higher ingredient, energy and employee related costs are expected to continue to negatively impact Weston Foods earnings as the year progresses,” the company said, adding that price increases in key product categories are expected to have a more significant impact in the final two quarters of 2004.