SARA LEE APPAREL SALES DROP 16%
Byline: Vicki M. Young
NEW YORK — Third-quarter operating income at Sara Lee Corp.’s intimates and underwear unit was down 4 percent as sales fell 16 percent.
Sales were $1.5 billion and operating income $162 million. Excluding discontinued or exited businesses in the unit, sales slipped 5 percent but operating income rose 8 percent during the quarter ended March 30. The unit includes businesses in intimate apparel, knit products and legwear operations.
Within the apparel group, higher unit volumes and the benefits of cost savings connected with the consumer goods firm’s restructuring activities led to increased margins in the quarter. Media advertising increased 10 percent over last year’s third quarter, led by double-digit expenditure increases for North American underwear, Bali intimate apparel products and the Dim brand in Europe.
Sales in its global underwear unit rose 5 percent, with gains in both the U.S. and in Europe. In legwear, the company posted a 19 percent increase in global sock sales for the third quarter.
Overall, Sara Lee’s third-quarter income rose 6.6 percent to $257 million, or 31 cents a diluted share, from $241 million, or 28 cents, in the year-ago quarter. Sales were up 3.9 percent to $4.2 billion from $4.04 billion.
The company projected that fourth-quarter operating income for the intimates and underwear businesses will rise at a mid-single-digit rate as profitability trends continue to strengthen, even though it expects to report lower operating income in the division for the year.
For the nine months, Sara Lee’s income was $659 million, or 80 cents a share, against a $1.29 billion loss, or $1.48. Sales were up 3.4 percent to $13.13 billion from $12.71 billion.