Sara Lee today (8 February) posted a slump in underlying quarterly profits as rising commodity costs hit earnings.
The US food group, which plans to split in two next year, booked net income from continuing operations of US$107m for its fiscal second quarter, which ended on 1 January. In the previous year’s second quarter, the figure stood at $298m.
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On a reported basis, Sara Lee’s net income was $882m, up from $376m a year ago. However, this year’s figure included a gain on the sale of the company’s North American fresh bakery business, which it offloaded in November.
Sara Lee’s second-quarter operating income stood at $206m, down from $269m a year earlier. The company pointed to higher commodity costs but also to the fact that its results compared to a “very strong” second quarter last year, when lower commodity costs “provided a benefit to the company”.
The company’s reported net sales dipped 0.4% to $2.3bn as lower unit volumes and unfavourable foreign exchange rates weighed on the business’s top line.
Shares in Sara Lee were down 0.1% at $16.91 at 10:02 ET.
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By GlobalDataClick here for the complete statement from Sara Lee and click here for the company’s comments on its planned split.
