DOW JONES NEWSWIRES

Sara Lee Corp. (SLE) posted a narrower fiscal fourth-quarter loss on sharply lower write-downs while lower sales were offset by higher margins.

The company also gave a downbeat forecast for its new year, projecting earnings excluding divestiture gains of 84 cents to 90 cents a share on net sales of $12.9 billion to $13.2 billion. Analysts polled by Thomson Reuters were expecting 92 cents and $13.33 billion, respectively.

The income forecast is only slightly higher than the latest year's 82-cent profit, with projected declines at Sara Lee's North American foodservice unit nearly offsetting anticipated earnings growth at the rest of the company.

The packaged-food industry initially saw some benefit as consumers cut back on eating at restaurants and spent more on groceries. But then consumers turned to cheaper store-brand items or lesser-known labels.

Sara Lee's loss for the period ended June 27 narrowed to $14 million, or 2 cents a share, from $672 million, or 95 cents a share. The latest quarter included a $207 million write-down on its Spanish bakery business while the prior year had $850 million in write-downs. Excluding items such as the write-downs, earnings were flat at 29 cents.

Net sales fell 9.8% to $3.16 billion. The drop was 1.3%, excluding divestitures and foreign-exchange impacts.

Analysts polled by Thomson Reuters were expecting the maker of its namesake cheesecake, Jimmy Dean sausages and Hillshire Farm's meats to report earnings, excluding items, of 24 cents a share on revenue of $3.27 billion.

Gross margin rose to 62% from 61.5% as volume fell 1.9% in the North American retail business.

Sales in its North American fresh-bakery and retail segments rose 8.5% and 5.9%. Sales fell in all other segments.

In April, 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. Wednesday, it said it was continuing to consider "all alternatives" for the segment, including a divestiture. The company has been in restructuring mode since 2005, spinning off or selling slower-growth businesses in the process.

Shares recently rose 1.9% to $11 premarket.

-By Mike Barris, Dow Jones Newswires; 212-416-2330; mike.barris@dowjones.com;