Sara Lee (SLE) swung to a second-quarter loss as weakness on the international front and writedowns tied to its foodservice beverage business helped take a $17 million bite out of its bottom line.
The Downers Grove, Ill.-based company also lowered its full-year outlook for a second time, now expecting earnings in a range of 72 cents to 79 cents a share. In November, the company was anticipating fiscal 2009 earnings of 99 cents to $1.06 a share.
For the quarter ended Dec. 27, Sara Lee posted a loss of $17 million, or $2 cents a share, compared to a profit of $182 million, or 25 cents a share, a year ago. Excluding a 23-cent per share goodwill impairment writedown in its North American food-service beverage unit, the company earned 21 cents a share -- meeting the estimates put forth by Thomson Reuters analysts.
Revenue for the period fell slightly to $3.34 billion from $3.41 billion a year ago as the stronger dollar resulted in weaker sales in the company’s operations abroad. The company also attributed the decline to lower unit volumes in markets suffering the effects of the global economic downturn -- particularly Spain, France and the United Kingdom.
Still, the company famous for its line of bakery goods and meat brands said its solid foundation and pursuit of cost-reduction opportunities will help bolster the European markets.
“I have no doubt that we will weather these difficult times abroad and continue to deliver
strong growth over time in these high-margin businesses,” said Brenda C. Barnes, the company’s chairman and CEO.
In December, Sara Lee announced a plan to slash 700 jobs as part of a cost-cutting initiative intended to save the company as much as $250 million over the next three years.
The company’s North American businesses saw growth during the second quarter on higher prices and a favorable sales mix, with its fresh bakery unit growing nearly 11% to $539 million. The region’s retail sales increased to $746 million -- a jump of 8.4%.
On the international front, unfavorable exchange rates and lower unit volumes brought bakery revenue down more than 16% to $196 million, beverage sales down 7% to $765 million and household and body-care sales down almost 16% to $490 million.
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