NEW YORK (Reuters) - Sara Lee Corp reported
a quarterly profit Thursday, helped by strong sales of Jimmy
Dean breakfast sandwiches and sausages, and forecast fiscal
2011 earnings that could top analysts' expectations.
The company, which also makes Sara Lee baked goods and
Hillshire Farm lunch meat, said net income was $187 million, or
28 cents per share, in the fourth quarter ended on July 3,
compared with a year-earlier loss of $14 million, or 2 cents
Excluding items, profit fell to 19 cents per share from 26
cents, hurt by investments in new product launches and a drop
in the market value of some commodities positions.
Net sales rose 4.2 percent to $2.77 billion. The results
benefited from the addition of an extra week in the fiscal
calendar and a higher proportion of pricier products.
Analysts on average forecast sales of $2.86 billion,
according to Thomson Reuters I/B/E/S.
Sara Lee shares were down 1.7 percent at $14.23 in trading
before the market opened.
Adjusted sales, which exclude the impacts of the extra
week, foreign exchange rates and acquisitions, fell 2.8
percent, due in part to lower volumes and lower prices.
Volume in Sara Lee's North American retail segment fell 7.9
percent due to a significant drop for commodity meats, a
business the company is exiting. Excluding that business,
volume rose 1.8 percent, driven by growth of Jimmy Dean
breakfast sandwiches and sausages and Hillshire Farm lunch
meats and smoked sausage. Both volume figures exclude the extra
In the bakery business, volume fell 3.1 percent, excluding
the extra week, as slightly higher shipments of branded breads
failed to offset weakness in private-label products as a result
of intense pricing competition.
Sara Lee said it was confident it can cope with rapidly
rising wheat costs in 2011, through a combination of commodity
hedging and price increases.
The company forecast fiscal 2011 earnings of 93 cents to
$1.02 per share, excluding items, on sales of $11.2 billion to
Analysts on average were expecting 2011 earnings of 94
cents per share on revenue of $11.0 billion.
Earlier this week, Sara Lee said Brenda Barnes would step
down permanently as chairman and chief executive officer after
suffering a stroke in May, and that it had begun a search for
During her tenure, Barnes oversaw a major overhaul of Sara
Lee, looking to streamline the company's portfolio to the areas
of food and coffee. In so doing, Sara Lee has sold or spun off
units that sell products from clothing to air fresheners. By
the end of this year it expects to close on the sales of its
body care and European detergent business to Unilever
and its insecticides business to SC Johnson.
The company is also quietly seeking buyers for its bread
business, but has not launched a formal auction, sources said
Sara Lee shares closed on Wednesday at $14.47 on the New
York Stock Exchange, down 1.6 percent since May 14, when the
company announced Barnes' medical leave of absence.
(Reporting by Martinne Geller; Editing by Lisa Von Ahn)