: Downers Grove, Ill.-based Sara Lee is a global manufacturer and marketer of high-quality, brand-name products for consumers throughout the world focused primarily on the meats, bakery, beverage and household products categories.
Higher food costs led
Sara Lee to miss fiscal-second quarter earnings expectations
. It said commodity costs increased by $127 million last quarter, and by $219 in the first half of its fiscal year, partially offset by $123 million in higher prices during the first two quarters, resulting in a net unfavorable commodity cost impact of $96 million.
The food processor said that higher food costs cut into its results last quarter even as the maker of Jimmy Dean sausages and Ball Park hotdogs raised prices to offset some of that
Higher commodity costs more than halved Sara Lee's net cash from operating activities last quarter. Sara Lee said input costs continue to rise in its North American bakery business, and it was preparing for "further price increases in the back half of the year to offset additional cost increases." In its international beverage operations, Sara Lee said it continues to pass higher commodity costs onto consumers.
"While pricing lagged significant commodity cost increases in the first half, the second half will benefit from the pricing actions taken in the first half, along with additional actions planned for the third quarter," Sara Lee said.