Sara Lee Reports Operating Net Off 18.3% in Personal Products Segment
CHICAGO -- Citing continued weakness in its European hosiery and knit products businesses, which were pressured by a weak economy, Sara Lee Corp. reported pretax operating earnings in its personal products segment fell 18.3 percent, to $103 million in...
CHICAGO -- Citing continued weakness in its European hosiery and knit products businesses, which were pressured by a weak economy, Sara Lee Corp. reported pretax operating earnings in its personal products segment fell 18.3 percent, to $103 million in the third quarter ended April 2.
Sales in the segment, however, rose 13.7 percent, to $1.5 billion. John H. Bryan, Sara Lee's chairman and chief executive officer, noted that other categories within personal products -- including the U.S. knit products and worldwide foundations -- experienced strong growth. Sara Lee's personal products group includes such brands as Hanes hosiery, Playtex and Bali foundations, Hanes Her Way and Hanes underwear, Coach Leatherware, Aris Isotoner accessories and Champion apparel.
In the quarter, Sara Lee, whose other businesses include foods and household products, earned $146 million, or 30 cents a share, the same as a year ago. Sales rose 10.8 percent, to $3.7 billion, from $3.3 billion a year earlier.
In the U.S., Hanes and Hanes Her Way underwear and activewear posted double-digit sales gains, while European knit products units were lower at the Sans and Dim divisions. Worldwide knit products unit volume grew 17 percent, but worldwide unit volume in sheer hosiery, hit by declines in Europe, fell 6 percent. Worldwide foundations unit volume jumped 19 percent, with increases in North America and Europe.
In the nine months, operating profits in personal products dropped 7.9 percent, to $423 million, reflecting the same factors that hurt the quarter. Sales advanced 5 percent, to $4.9 billion.
Unit volume of worldwide knit products in the nine months was up 6 percent. Sheer hosiery unit volume fell 5 percent, and foundations unit sales grew 12 percent.
For Sara Lee in total, nine-month net earnings after a $35 million accounting charge declined 1 percent to $490 million, or $1.02, from $495 million, or $1.02. Sales rose 6.9 percent, to $11.5 billion from $10.7 billion. The spokeswoman said Sara Lee is comfortable with analysts' expectations for full-year per-share earnings in the range of $1.45 to $1.47, against year-ago results of $1.40.
In a separate development, the company said it will combine Champion U.S. and Champion International into a worldwide business and has appointed Joseph Fortino Jr. executive vice president and chief operating officer for Champion Worldwide.Fortino will assume operating responsibility for Champion U.S., headquartered in Winston-Salem, N.C., and will report to Lew Frankfort, senior vice president of Sara Lee and chief executive officer of Sara Lee Intimates and Accessories. Fortino was executive vice president of operations at Fisher-Price.
Reporting directly to Fortino will be Steve Lineberger, president of Champion U.S., and Hinda Miller, chief executive officer of Champion/Jogbra.
Champion produces its own brand of sports apparel, a line of licensed apparel.
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