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Sara Lee Says Woes in Hosiery, Knit Units Will Hurt Results

CHICAGO -- Sara Lee Corp. reported companywide earnings for the second quarter ended Jan. 1 rose 7 percent, but said softness in knit and hosiery products should cut third-quarter results below analysts' current estimates.<BR><BR>In the second...

CHICAGO — Sara Lee Corp. reported companywide earnings for the second quarter ended Jan. 1 rose 7 percent, but said softness in knit and hosiery products should cut third-quarter results below analysts’ current estimates.

In the second quarter, operating profits for the firm’s personal products segment, which includes hosiery and knit goods, slipped 8.4 percent.

Nevertheless, based on the strength of its other businesses, Sara Lee said, it expects full year operating results for the total corporation to exceed last year’s earnings per share of $1.40.

In the second quarter, operating profits in personal products fell to $179 million from $196 million a year ago. Sales in the segment dipped 1.2 percent, to $1.7 billion from $1.73 billion. The firm said lower sales and margins in European hosiery and knit products reflected a stronger dollar and higher costs from redirecting that business. The worldwide intimate apparel and accessories businesses continued to report strong sales and earnings.

A spokeswoman said analysts had been predicting third-quarter earnings per share would rise 9 or 10 percent, but Sara Lee is expecting flat results. In the 1993 quarter, Sara Lee earned $152 million, or 30 cents a share.

Overall earnings in the second quarter were $236 million, or 48 cents, against $220 million, or 44 cents. Sales rose 4 percent to $4 billion. In the six months, operating income in personal products declined 3.9 percent, to $319 million from $332 million. Sales slipped 1.6 percent, to $3.3 billion from $3.2 billion.