NEW YORK — A lower contribution to earnings from its branded apparel business didn’t keep Sara Lee Corp. from booking a surge in third-quarter profits.
For the three months ended March 27, the Chicago-based consumables giant said net income leaped 39.8 percent to $376 million, or 47 cents a diluted share, which beat Wall Street’s estimate by 3 cents. That compared with last year’s earnings of $269 million, or 33 cents.
Consolidated net sales increased 9.1 percent to $4.75 billion from $4.35 billion a year ago, with a significant portion of that growth attributable to a stronger euro.
“We are encouraged by the recent improvement in apparel sales at our retail customers, which contributed to branded apparel’s top-line growth versus the same quarter last year,” said chief executive officer C. Steven McMillan in a statement.
However, although branded apparel sales advanced 4.5 percent to $1.56 billion from $1.50 billion a year ago, operating income fell 23.3 percent to $142 million from $185 million. Sara Lee said pricing pressures, an unfavorable product mix and higher pension and cotton costs were to blame for the decrease in segment earnings.
Overall, for the first nine months of the fiscal year, Sara Lee said net income dipped fractionally, or 0.8 percent, to $918 million, or $1.15 a share, from $925 million, or $1.13, a year ago. Net sales for the period gained 5.6 percent to $14.43 billion from $13.66 billion last year.
Meanwhile, the branded apparel segment’s income fell by 33.9 percent to $401 million from $607 million in last year’s nine-month period, while net sales slid 1.2 percent to $4.81 billion from $4.86 billion.
— Dan Burrows