- Associated Press Newswire -
Sara Lee Corp.\'s upbeat report about operational improvement generated little enthusiasm recently on Wall Street, where analysts are waiting for more definitive evidence of a turnaround at the food and household goods maker after years of lackluster results. Brenda Barnes, chairman and chief executive, said a more disciplined approach to innovation is responsible for a number of successful new products at the Downers Grove, Ill.-based company.
CHICAGO (AP) - Sara Lee Corp.'s upbeat report about operational improvement generated little enthusiasm Thursday on Wall Street, where analysts are waiting for more definitive evidence of a turnaround at the food and household goods maker after years of lackluster results.
Brenda Barnes, chairman and chief executive, said a more disciplined approach to innovation is responsible for a number of successful new products at the Downers Grove, Ill.-based company, whose brands include Jimmy Dean sausages, Sara Lee breads and desserts and air freshener Ambi Pur.
"We have made significant progress in transforming Sara Lee," she said Wednesday night in a presentation to an annual food industry conference in Scottsdale, Ariz.
Barnes acknowledged that the long-term transformation has not yet achieved its goals, which include 12 percent operating margins, despite continuing margin improvement this year.
Sara Lee shares fell 4 cents to $17.21 on light volume in afternoon trading on the New York Stock Exchange.
"The discussion focused on improvement/progress, but with an underlying sense that there is still a long road ahead of the company," Deutsche Bank analyst Eric Katzman wrote in a note to investors from the Consumer Analyst Group of New York conference.
Analysts said the company's progress from cost-cutting and other moves already is built into the stock, which bottomed out at a six-year low of $13.53 last June.
"Basic 'blocking and tackling' efforts are beginning to stabilize Sara Lee and even make it grow against some not-so-easy comparisons," John McMillin of Prudential Equity Group said in a research report. He said the small growth in its bakery and meats businesses aren't great, but trends are better in the company's high-margin household and body care unit.
Despite speculation lingering from last fall about a possible buyout by a private equity firm, McMillin said management appears to have little interest in going private after consolidating operations.
Barnes, who has focused on the company's reorganization since arriving in February 2005, cited numerous new products that are helping overall results, including Ambi Pur 3volution air freshener, Douwe Egberts Cafe Switch, Hillshire Farm Entree Salads, Jimmy Dean Skillets and Breakfast Bowls and Sara Lee Soft & Smooth bakery products.