DOWNERS GROVE, Ill. — Costs associated with the upcoming split of the company weighed on third-quarter earnings at Sara Lee Corp. For the quarter ended March 31, the company had a loss of $2 million, which compared with income of $153 million, equal to 25c per share on the common stock, during the same quarter of the previous year. Net sales were $1,899 million, up 2 percent from $1,860 million during the same quarter of the previous year.
“I am pleased to announce we are on track to spin-off the Coffee & Tea business by June 30,” said Jan Bennink, executive chairman. “Significant progress has been made in the last quarter with the IRS private letter ruling, an F-1 prospectus filing for Coffee, the successful bond redemption and tender offers and the investor day for Coffee Co. (D.E. Master Blenders 1753). Both companies are in full preparation to become highly successful pure-play companies. Sean Connolly, the new chief executive officer for Meats, is finalizing his strategy and his new management structure, which will be presented to investors shortly. Michiel Herkemij, appointed as CEO for Master Blenders in December, has presented his strategy to investors and has added a supply chain executive and a regional head for Western Europe to his executive team. The boards for the new companies will be announced in May.”
For the nine months ended March 31 the company had income of $249 million, down 79 percent from $1,176 million during the same period of the previous year. Sales for the nine months were $5,923 million, up 7 percent from $5,545 million.
“I am pleased to report that Meat Co. showed continued improvement in volume trends, achieved SG&A reductions and launched new innovation in the third quarter,” said Marcel Smits, chief executive officer. “The Coffee & Tea business performed well in its main markets with underlying margin improvement, and is gearing up for significant innovation. Activity levels in both companies increased during this period as the corporate headquarters operation continued to be scaled down. In addition, both businesses worked through manufacturing inefficiencies that impacted results. Positively, after two years of steep commodity cost increases, we finally see a stabilization and, in the case of coffee, a reversal of raw material trends. For the first time in two years, both businesses recovered their commodity cost increases and will see further benefits in Q4, particularly in coffee. We are confident that we will achieve our guidance, at the low end of the range for sales and operating income, as we continue to build two stand-alone businesses.”