USA: Sara Lee Q1 Sales Hit $4.5bn On Strong Intimates
Playtex bra maker and apparel giant Sara Lee Corp on Thursday posted a 42 per cent year-on-year jump in first quarter earnings per share on the back of a strong performance from its intimates underwear business.
The Chicago-based consumer goods goliath said earnings per share soared to 37 cents from 26 cents in the quarter with sales up seven per cent to $4.5 billion from $4.2bn in the year-ago period, with operating income up 25 per cent.
Chairman, president and CEO, C Steven McMillan, said: "Our strategy is working. We are beginning to realise benefits from the reshaping program that Sara Lee began two years ago.
"I strongly believe that Sara Lee Corp today has the right mix of food, apparel and household products to satisfy the growing appetite of consumers around the world for high-quality, convenient products that meet their everyday needs.
"My current priority is to make certain that Sara Lee invests in new product development, marketing support for our brands and enhanced organisational structures to deliver sustainable top-line growth. Innovation - in both our products and processes - is a key component of these activities.
"Further, we expect some of our most recent initiatives - including the new Tagless T-shirt from Hanes and our just-introduced line of Sara Lee premium breads - to contribute to increased sales growth in future quarters."
Sara Lee said in a lengthy statement operating income for its intimates and underwear unit surged 62 per cent from the year-ago period thanks partly to lower cotton prices and reduced costs following its recent restructuring.
Total sales were flat at $1.69bn but rose for knit products and intimate apparel. Intimates worldwide unit volumes increased 8 per cent. Unit sales rose at a double-digit rate in the US, reflecting strong marketing activity behind new products.
In the US, the company's bra dollar market share increased more than four points to 31.4 per cent. European intimate apparel unit sales rose three per cent, with global knit volumes flat against a 13 per cent rise last year.
In the United States, volumes increased at a mid-single digit rate for men's and boys' underwear and grew 25 per cent for Champion brand products, although these gains were offset by slightly lower unit sales for women's and girls' underwear and other active wear products.
The company kept its number-one unit share in the men's and boys' underwear market and the fleece market, and increased its leading unit share of the women's and girls' underwear market by nearly two points to 35.2 per cent.
It added sock volumes jumped 19 per cent, with unit volumes for sheer hosiery down 11 per cent but margins rose due to cost efficiencies and an improved product mix.
Sara Lee added it increased its dollar share of the US sheer hosiery market by nearly six points to more than 55 per cent.
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