Sara Lee income up sharply in year

by Staff
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DOWNERS GROVE, ILL. — Divestments and restructuring as well as lower corporate expenses led to a spike in income during the year at Sara Lee Corp.

For the full-year ended July 2, the company had income of $1,287 million, equal to $2.07 per share on the common stock, up 154% from $506 million, or 74c per share, during fiscal 2010. Sales for the year were $8,681 million, up 4% from $8,339 million during the previous year.

“During the last six months, we have made significant strides toward creating two pure-play companies that are poised for success,” said Jan Bennink, executive chairman. “Our objective of building two simpler, faster and more entrepreneurial businesses is being realized. We have defined the organizational framework for our new companies and are continuing to build and restructure our teams for the future. Through our strategic divestments, we are achieving our objective of streamlining the portfolios to provide the best foundation for strong and focused businesses moving forward. We are heartened by the fact we have been able to deliver solid results for fiscal 2011 while managing difficult commodity conditions and the internal challenges of the spin off. The inherent strength of these two businesses, combined with a new focus and orientation, give me confidence that the two companies will be highly successful when they separate in the first half of calendar 2012.”

During the year the North American Retail segment had operating income of $307 million, down 11% from $343 million during the previous year. The segment had sales of $2,868 million, up 2% from $2,818 million during the previous year.

Sara Lee said the segment benefited in the fourth quarter from strong new product performance with growth from Jimmy Dean Jimmy D’s and Hearty Crumbles, and Hillshire Farm Low Sodium and Family Size.

The North American Foodservice segment had operating income of $79 million, up 33% from $60 million during fiscal 2010. The segment had sales of $1,566 million, up 1% from $1,547 million.

During the fourth quarter the segment posted particularly strong results for Jimmy Dean breakfast sausages, pre-sliced pies and cakes and branded meats distributed through convenience stores, the company said.

For the fourth quarter ended July 2, the company as a whole had income of $111 million, or 19c per share, down 41% from $187 million, or 28c per share, during the same quarter of the previous year. Sales for the quarter were $2,297 million, up 9% from $2,113 million.

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