Chicago - Sara Lee Corp. says it has posted a loss of almost $1.3 billion in its latest quarter as it took a $1.6 billion charge for restructuring amid stagnant sales.
Sara Lee, which makes packaged consumer goods ranging from hot dogs to underwear, said Thursday it lost $1.28 billion, or $2.71 a diluted share, in the three months ended Dec. 27. That compared with net income of $317 million, or 62 cents a diluted share, a year ago.
The company, whose brands include Sara Lee, Hillshire Farm, Hanes, Coach and Playtex, said its earnings were reduced by $1.6 billion, or $3.44 a share, in after-tax charges for worldwide restructuring.
Excluding the charges, Sara Lee said, earnings per share were 69 cents, which matched Wall Street expectations, according to First Call, which tracks analysts' estimates.
Sara Lee said its sales in the quarter grew by only two-tenths of a percent to $5.279 billion from $5.269 billion, with personal products sales declining 6 percent to $1.95 billion from $2.07 billion.
The company said, however, that it expected its restructuring, including some asset sales, would boost earnings this year.
"We increased our earnings per share target from 8 percent real to 13 to 15 percent on a nominal basis," spokeswoman Janet Bergman said in a conference call with analysts and reporters.
"These higher targets, particularly as they relate to earnings and returns, are directly related to benefits that we expect to accrue from our plans to reduce our asset base and repurchase stock."
The company said it had repurchased 11.1 million shares of its stock in the past six months at an average price of $51 a share.
"We are targeting to complete one-third of our $3 billion share repurchase program this fiscal year," Bergman said. Bergman also said Sara Lee had sold National Textiles as part of the restructuring announced in September and expected to raise $600 million over the next three years from the transaction.
Sara Lee said then that it hoped to raise $3 billion by selling its U.S. yarn and textile operations and other plants, reducing costs and divesting some businesses.
Bergman did not specify which units may be sold next, but said parts of the meat business were likely targets.
Meat Industry Insights News Service
P.O. Box 553
Northport, NY 11768
Phone: 631-757-4010
Fax: 631-757-4060
E-mail: sflanagan@sprintmail.com
Web Site: http://www.spcnetwork.com/mii