Sara Lee Corp.'s (SLE) fiscal third-quarter earnings fell 22% on
a prior-year gain as the consumer packaged-goods company saw
results hold up despite the economic climate, with earnings topping
expectations.
The industry initially saw some benefit as consumers cut back on
eating at restaurants and spent more on groceries. But people and
stores have been paring their inventories while consumers are also
increasingly buying cheaper store-brand items or trade down to
less-known labels.
For the period ended March 28, Sara Lee reported a profit of
$165 million, or 24 cents a share, down from $211 million, or 30
cents, a share, a year earlier. Excluding items, earnings rose to
25 cents from 22 cents.
Net sales declined 6.6% to $3.03 billion as strength in North
American retail and bakery operations were more than offset by
weakness in the food service and international operations.
Analysts polled by Thomson Reuters expected per-share earnings
of 18 cents on revenue of $3.05 billion.
Excluding currency changes, divestitures and acquisitions, sales
would have risen 2.1%.
Sara Lee - which is the maker of its namesake cheesecake, Jimmy
Dean sausages and Hillshire Farm's meats - said gross margin fell
to 37.8% from 38.8% as volume fell 6.1% in the North American
retail business.
Last month, Sara Lee said it was exploring options for its
international household and body care business, including a
possible sale, after receiving interest in the division. The
company has been in restructuring mode since 2005, spinning off or
selling slower-growth businesses in the process.
Shares closed Wednesday at $8.96 and were inactive
premarket.
-By John Kell and Kevin Kingsbury, Dow Jones Newswires;
201-938-5285; john.kell@dowjones.com