SARA LEE APPAREL EARNINGS AHEAD 18% IN PERIOD
NEW YORK — In spite of a less than 1 percent increase in sales of Sara Lee Corp.’s branded apparel, the apparel unit’s net earnings advanced 18 percent in the third quarter, to $131 million from $111 million a year ago.
Sara Lee, with apparel brands that include Hanes, Playtex and Coach, said strong unit volumes and improved margins, particularly in the knit products and accessories businesses, led to the rise.
Corporate earnings for the quarter ended April 1 advanced 6.9 percent to $262 million, or 29 cents per diluted share, while net sales moved ahead 4.6 percent to $4.9 billion. In the nine months, earnings totaled $900 million, or 95 cents per diluted share, a 0.5 percent increase, as sales advanced 2.4 percent to $9.3 billion.
During the quarter, knit products and underwear unit sales grew 4 percent and 5 percent, respectively, with gains in North America and in Europe. Sara Lee said it had maintained its number-one U.S. market share in men’s and boys’ underwear, now 37.3 percent, over the last 12 months.
Other gains came from Sara Lee’s intimate apparel unit, where volume jumped 8 percent in the quarter and 6 percent for the nine months. Activewear, including Champion, and the company’s screenprint operations both recorded double-digit gains.
Sara Lee had losses in its legwear unit, where volume fell 2 percent during the quarter and 1 percent for the first nine months.
John H. Bryan, chairman and chief executive officer, said base business unit volume gains were particularly strong in the company’s branded apparel and body care operations, “as our brand and products continued to enjoy strong consumer acceptance.”
The results were in line with Wall Street expectations. Sara Lee shares fell 7/8, or 5.3 percent, to 15 9/16 on the New York Stock Exchange Wednesday.
For the nine months, branded apparel sales increased 2 percent and income grew by 14 percent.
The company said it had repurchased 20 million shares of its common stock during the third quarter at an aggregate cost of $345 million. In the first nine months of the year, Sara Lee purchased more than 20 million shares for $584 million.