Sara Lee affirms 2011 outlook

By Reuters
Posted Sep. 14, 2010 at 11:10 a.m.

Sara Lee Corp. on Tuesday reaffirmed its 2011 financial outlook and said it is weighing external and internal candidates for its top job.

Interim Chief Executive Marcel Smits said the maker of Jimmy Dean sausages still expects 2011 operating earnings in the range of 88 cents to 95 cents a share and sales from continuing operations of $10.7 billion to $10.9 billion.

Analysts polled by Thomson Reuters I/B/E/S were expecting 2011 operating earnings of 94 cents per share and sales of $10.96 billion.

Speaking at a meeting with analysts in New York, Spits added that the company, which also makes Hillshire Farm lunch meat and Sara Lee baked goods, is going through a selection process of internal and external candidates for the CEO job.

Its former CEO Brenda Barnes quit last month to recover from a stroke she suffered in May.

Smits also said Sara Lee expects share buybacks, declining amortization and the elimination of stranded overhead to boost earnings per share in fiscal 2012 by 15 cents to 20 cents per share, though he declined to give a specific forecast.

Last month, Sara Lee reported lower-than-expected quarterly sales and forecast an earnings range for 2011 that was largely below analysts’ estimates as the company invests more to market its brands in what remains a tough environment for food makers.

Like most packaged food makers, Sara Lee has been grappling with weak consumer spending and heavy promotions at grocery stores. Its bread business has been hit hard by lower-cost rivals, including store brands.

The company was quietly seeking buyers for its bread unit, but had not launched a formal auction, sources familiar with the matter told Reuters in July.

The company has said it expects to raise prices this year across most of its portfolio to make up for an expected 15 percent increase in the cost of ingredients.

Sara Lee shares were down 20 cents, or 1.4 percent, at $13.90 on the New York Stock Exchange.

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