Sara Lee Corp.'s (SLE) fiscal fourth-quarter earnings slid 41%,
though core earnings came in line with analyst expectations, as the
packaged foods company saw continued cost pressure on its bottom
line.
Looking ahead, Sara Lee forecast fiscal 2012 net sales from
continuing operations of $8.5 billion to $8.75 billion--or $8
billion excluding its international bakery operations--coming in
short of the $9.37 billion currently expected by analysts polled by
Thomson Reuters.
Shares tumbled 5.6% to $16.35 in premarket trade following
results. The stock is down 1.1% since the start of the year.
Once a hodgepodge of household products and food brands, Sara
Lee has worked to sell off businesses and narrow its focus. The
company is currently in the process of splitting apart, separating
into an international coffee and tea business and a North American
business that includes the Jimmy Dean and Hillshire Farms
brands.
"We are heartened by the fact that we have been able to deliver
solid results for fiscal 2011 while managing difficult commodity
conditions and the internal challenges of the spin off," Executive
Chairman Jan Bennink said Thursday.
Earlier this week, Sara Lee agreed to sell its North American
private-brand refrigerated dough business to fellow food maker
Ralcorp Holdings Inc. (RAH) for about $545 million, a sale that was
long-expected from the company.
For the quarter ended July 2, Sara Lee reported a profit of $111
million, or 19 cents a share, down from a year-earlier profit of
$187 million, or 28 cents a share. Adjusted earnings from
continuing operations rose to 20 cents from 7 cents a year
earlier.
Net sales from continuing operations improved 8.7% to $2.3
billion. Analysts polled by Thomson Reuters expected a per-share
profit from continuing operations of 20 cents on revenue of $2.22
billion.
Gross margin fell to 30.2% from 33.6%. Like many other food
makers, Sara Lee has lately faced a slew of economic headwinds,
including shaky consumer mood and rising commodity costs. Sara Lee
raised prices an average of about 3% in its first fiscal half and
had anticipated further increases in the remainder of the year.
In the company's North American retail business, net sales
slipped 2.2%, while international-beverage-segment net sales popped
24%.
-By Mia Lamar, Dow Jones Newswires; 212-416-3207;
mia.lamar@dowjones.com