Sara Lee profit rises, Australian frozen food sector performs well

Posted by Daniel Palmer on 6th November 2009

Sara Lee has reported stronger than forecast first quarter profit growth, leading them to revise up their full-year guidance.

Profit growth of over ten per cent was reaped in spite of a 7.4% sales decline that resulted from currency headwinds, volume declines and divestitures.

Their international beverage division reported profit down 13%, while their international bakery division partially overcame lower volumes and currency headwinds with “strength in the refrigerated dough business in France and the frozen bakery business in Australia”.

“Successful new products launched in the first quarter included Ortiz branded bread in Spain, various new Sara Lee branded ice creams in Australia and several private label refrigerated dough products in France,” the company advised.

“I’m very pleased with our first quarter performance, which demonstrates substantial bottom-line improvement,” Sara Lee Corp. Chair and CEO, Brenda Barnes, said. “A number of factors contributed to our results, including lower input costs, Project Accelerate cost savings and pricing discipline.”

“The combination of these factors allows us to both raise our EPS guidance for fiscal 2010 and to increase our investment in a full pipeline of growth opportunities. We continue to spend more toward our consumers and expect MAP spending to be up for the year.”

Sara Lee is still in the process of offloading their International Household and Body Care division, with part of the business already offloaded to Unilever.

“During the quarter, we announced that we received a binding offer of €1.275 billion from Unilever for our global body care and European detergents businesses,” Barnes advised. “This enables us to focus on our core food and beverage businesses. We are confident that we will soon divest the remainder of the segment.”