US food, apparel and household products giant Sara Lee has reported a 4.4% increase in earnings for the second quarter.
The company said net income was US$326m, or 41 cents per share, for the second quarter to 1 January, compared to $312m, or 39 cents per share, for the year-ago period.
Net sales for the second quarter were $5.2bn, up 4% compared to $5.0bn in the prior year’s quarter. The company said that during the second quarter, sales benefited from higher net selling prices in its meats and beverage businesses, higher unit volumes in its branded apparel unit and favourable foreign currency exchange rates.
“Despite retail pricing pressure in Europe and challenging commodity costs, Sara Lee delivered earnings per share in line with our expectations for the quarter. Operating segment income rose in our bakery and branded apparel businesses, but was offset by softness in the other lines of business,” said C. Steven McMillan, chairman and chief executive officer, adding that the meats business continued to face high commodity prices, particularly in the US.
Looking ahead, Sara Lee expects earnings per share for the third quarter of fiscal 2005 to fall within a range of 29 to 34 cents.
“Management expects the challenging market conditions that affected operations in the second quarter of fiscal 2005, most notably higher raw material costs in meats and branded apparel and a difficult European retail environment, to continue into the third quarter of this year,” the company said.