Sara Lee sustains $102 million loss in year

by FoodBusinessNews.net Staff
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DOWNERS GROVE, ILL. — Significant impairment charges coupled with rising wheat costs bogged down fiscal 2008 earnings at Sara Lee Corp., as the company suffered a loss of $102 million in the year ended June 28. The loss compared with net income of $504 million during the previous year. Net sales for the year were $13,212 million, up 10% from $11,983 million during the previous year.

Sara Lee also reported an adjusted operating income, which excludes significant items, acquisitions, divestitures and presents fiscal 2007 results at fiscal 2008 foreign currency exchange rates, of $1,072 million, up 14% from $940 million during the previous year.

"Sara Lee had a very good year," said Brenda C. Barnes, chairman and chief executive officer. "As anticipated, we had a strong fourth quarter with virtually every business segment delivering improved underlying business results. I am pleased to report that we met the high-end of our full-year adjusted earnings per share outlook and exceeded our adjusted operating margin guidance. We also are very encouraged that the strength of our brands allowed us to offset the unprecedented levels of commodity and other input costs through pricing and helped deliver market share gains and increased operating margins."

For the North American Retail Meats segment, the company posted operating income of $175 million, up 87% from $94 million during the previous year. Net sales for the segment were $2,424 million, up 3% from $2,355 million during the previous year.

The North American Retail Bakery segment had operating income of $55 million, which compared with a loss of $2 million during the previous year. Net sales for the segment were $2,183 million, up 9% from $1,998 million during the previous year.

The Foodservice segment sustained a loss of $318 million compared with operating income of $139 million during the previous year. Sales for the segment were $2,221 million, up 24% from $2,197 million during the previous year.

In its International Bakery business, Sara Lee sustained a loss of $346 million in fiscal 2008. This compared with operating income of $38 million in fiscal 2007. Sales for the year rose 16% to $929 million. The full year operating results were adversely affected by $400 million in impairment charges related to the company’s Spanish bakery business.

The International Beverage business had operating income of $547 million, up 73% from $317 million in fiscal 2007. Sales improved 23% to $3,215 million.

For the fourth quarter ended June 28, Sara Lee suffered a loss of $695 million, which compared with income of $117 million during the same quarter of the previous year. Sales for the quarter were $3,507 million, up 12% from $3,126 million during the same quarter of the previous year.

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