Sara Lee said it will make “significant” marketing investments in the fourth quarter as it looks to create its own “tailwinds” to boost sales.
Speaking on the firm’s third-quarter earnings conference call yesterday (6 May), chairman and CEO Brenda Barnes said the investment will be made to support “major new product launches”.
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“These efforts will help set up fiscal ’11 for another year of growth of adjusted operating segment income from continuing operations,” Barnes told analysts. “As we look to the future, we remain well-positioned for success. I’ve never been more confident in our ability to deliver sustained, high-quality growth and increased shareholder value.”
The firm yesterday reported a loss for its fiscal third quarter but lifted its forecast for underlying earnings for the full year.
The company posted a net loss of US$336m for the three months to 27 March thanks to one-off items, including a tax charge. Last year, Sara Lee reported third-quarter net income of $165m.
However, Sara Lee said “improved operational performance” meant it could lift its guidance for full-year adjusted earnings per share to $1.06-1.10 a share. In March, the company forecast adjusted earnings per share of $1.03-1.06.
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By GlobalDataBarnes added that this year, Sara Lee has had “some headwinds and tailwinds” but the outlook for the next fiscal year appeared rosier.
“Looking forward to fiscal ’11, we see more of the same. There will be headwinds, commodities, currencies and lapping a 53-week year to name a few. At the same time, we’re creating our own tailwinds. Project Accelerate is delivering meaningful savings, our innovation is outstanding and our investments are paying off. Simply put, we feel great about where we are today and our future,” Barnes said.
“We continue to gain real traction in the marketplace, where ongoing focus on innovation is backed by solid execution. We’re building world-class brands and gaining share in large important categories,” she added.
Barnes said that, as Sara Lee continues to focus on driving both top-line growth and “substantial” cost savings around the world, the company will become more competitive over the next few years.
“We’re confident that our accelerating momentum will translate into compelling value creation for our shareholders,” Barnes said. “We feel great about our quarter. We feel absolutely great. And we feel great position for continued growth because we have a pipeline full of new products. We have a model that now gives the money to spend behind them, which we’re doing.”
