Sara Lee Corp. reported earnings for the third quarter of fiscal 2011 and announced portfolio changes.
The company signed agreement to acquire Aidells Sausage Co., a premium meats business in North America, for a purchase price of $87 million.
The company is also evaluating strategic options for international bakery and North American refrigerated dough businesses.
In the third quarter, the company reported a 6 percent increase in adjusted net sales from continuing operations to $2.2 billion.
The company reported net sales increased 7 percent.
It reported an 11 percent decline in adjusted operating income from continuing operations.
It reported operating income from continuing operations declined 6 percent.
The company reported a 4 percent increase in adjusted net sales from continuing operations and a 2 percent increase in reported net sales.
The company reported an 11 percent decline in adjusted operating income from continuing operations and 27 percent decline in reported operating income from continuing operations.
"We are making great progress toward the creation of two solid, stand-alone companies," said Sara Lee Executive Chairman Jan Bennink in a prepared statement. "We are focused on preparing both the Coffee company and the Meat company for strong and vibrant futures.
"Looking ahead, in North America we are pleased to announce that we signed an agreement to acquire Aidells Sausage Co. Aidells premium, high-potential products will enhance our North American meat portfolio. Also within North America, we will be evaluating our strategic options regarding the North American refrigerated dough business. Within the Coffee business, we are working on the strategic role and options relating to our International Bakery segment. These initial steps are part of the preparatory phase which will give each company the best platform for a strong and independent future."
In reviewing third quarter results, Chief Executive Officer Marcel Smits commented, "On the operational side, our strategy is to cover commodity inflation through price increases and cost savings, and meanwhile continue to build our brands with superior marketing and innovation. We remain committed to this approach despite some short-term volume risk. Mainly due to this volume risk in our core businesses, as well as intense competition in our International Bakery segment, we are reducing our guidance by six cents. That said, we are optimistic about the long term prospects of our businesses. In North America, for the first time in four quarters, we were able to offset commodity cost increases through pricing actions and productivity gains. In International Beverage, we are still lagging the rapid increases in commodity cost, but we saw price increases accelerate as the third quarter progressed. In total, on a year-to-date basis, MAP spending is significantly higher, SG&A costs are significantly lower and we are confident in our ability to manage commodity cost inflation over time. In addition, as work on our spin-off progresses, we expect to gain further visibility on additional cost reduction opportunities."
