posted a third-quarter profit increase but results still fell a penny short of analyst expectations. The company cited a weaker environment for food-service products during the quarter and weakness among some retail customers.
The company also provided fourth-quarter and full-year 2003 EPS forecasts below analyst guidance and said it plans to eliminate 45 bread brands in the fourth quarter.
Chicago-based Sara Lee earned $269 million, or 33 cents a share, during the quarter ended March 29, compared with $257 million, or 31 cents a share, in the year-ago quarter. Analysts expected 34 cents a share.
Sales increased 4% to $4.4 billion. Favorable foreign currency rates increased sales by six percentage points for the quarter, the company said. Sales in its meat business were relatively flat at $871 million but bakery sales decreased 1% to $774 million. Revenue in its household products business, however, grew 10%.
"Sara Lee's businesses continue to benefit from incremental cost savings and increased productivity related to previous restructuring activities," the company said. "In addition, our heightened investment in new product initiatives and our strategy to increase marketing support for our largest, most important brands are together driving higher growth rates for our key brands."
Looking ahead, Sara Lee expects fourth-quarter earnings within a range of 36 cents to 38 cents a share, compared with 43 cents in the year-ago period. Analysts expect 46 cents a share.
Sara Lee Bakery said it intends to eliminate about 60 small regional fresh bread brands; about 45 will be discontinued during the fourth quarter. The eliminations are part of the company's efforts to improve margins and profit growth. Sara Lee Bakery also intends to close 3 U.S. fresh bakery manufacturing facilities during the quarter.
Full-year fiscal 2003 EPS are expected to be in a range $1.49 to $1.51, compared with $1.23 in fiscal 2002; analysts expect $1.59 a share.
Shares of the company closed at $19.74 Wednesday on the
New York Stock Exchange