Sara Lee Q4 sales rise 9.4% - Brief Article

US food and consumer products group Sara Lee has reported a 9% increase in its Q4 results following strong performances from its coffee, tea and its underwear businesses. The group, whose portfolio ranges from Sara Lee baked goods to shoe polish, announced a net income of US$313m (344m [European Dollar]) rising from US$286m the previous year, with sales rising to US$5.25bn from US$5.2bn. The Chicago-based company pointed out that unfavourable currency exchange rates slowed down both profit and growth rates, and that at constant rates sales could have risen by around 13%. However, Sara Lee's food business reported a 3% decrease in sales and operating profit fell 23% to US73m, while coffee and tea sales rose 8% leading to a 15% rise in operating income. Meanwhile, household products sales fell 4% despite an increase in sales of 4% and underwear sales rose 2%. The group's European bakery business continues to suffer from `difficult conditions' in the market.

STREAMLINED PORTFOLIO?

In May of this year, Sara Lee unveiled a restructuring plan aimed at streamlining the company portfolio through divesting some of its assets, as the company shifts its focus to three core businesses: food, underwear and household products. Part of this plan includes selling off its Coach leather brand, Champion athletics business as well as various other spin-offs. Sara Lee intends to use the proceeds from any sales to acquire other interests within the streamlined portfolio and is said to be interested in US biscuit maker Keebler, along with other food giants such as PepsiCo, Danone, Campbell Soup and Kellogg. Sara Lee chief executive Steven McMillan said: "we believe these transactions will provide Sara Lee with a significant amount of after tax proceeds that would be available to [...] make strategic acquisitions that will provide opportunities for growth in our remaining core operations."

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