Weston Foods sales rise 3.2% after price increases

by Jeff Gelski
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TORONTO – Weston Foods reported sales of C$1,061 million ($960 million) for the first quarter ended March 24, a 3.2% increase from C$1,028 million ($930 million) in the previous first quarter. Price increases across key product categories combined with changes in sales mix affected sales positively by 3.4% while overall volume decreased 1.1%.

An exit from the U.S. frozen food service bagel business in the third quarter of 2006 and discontinuing contract manufacturing of business for certain customers in 2006 combined to impact sales negatively by 1.1%

Operating income for Weston Foods, a subsidiary of George Weston, Ltd., increased more than 20% in the first quarter to C$77 million from C$64 million. Lower restructuring and other charges and higher net stock-based compensation costs impacted profit.

Fresh bakery sales rose about 4% in the first quarter. Branded volume increases included growth in the Thomas’ and Arnold brands in the United States and D’Italiano in Canada. Whole grain products continued to grow in sales. The introduction of new and expanded products, such as Thomas’ 100 Calorie English Muffins and Thomas’ mini square bagels, contributed positively in sales growth.

Fresh baked sweet goods, primarily sold under the Entenmann’s brand, saw sales growth of 0.7% in the first quarter. Frozen bakery sales increased more than 6% despite the exit from the U.S. frozen food service bagel business. Biscuit category sales declined 7.4%. Discontinuing contract manufacturing of business for certain customers led to lower volume.

Company wide, Toronto-based George Weston Ltd. posted first-quarter sales of C$7.221 million, a 3.2% increase from C$6,997 million in the previous year’s first quarter. First-quarter net earnings dropped nearly 19% to C$104 million from C$128 million.

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