Sara Lee Corp. reported earnings for the fourth quarter and full year fiscal 2011 and provided an update on the progress of the spin off transaction. The company has shown significant divestment and restructuring progress toward the creation of two pure-play companies by the first half of calendar 2012, it reported.

The company said it intends to divest Spanish bakery and French refrigerated dough businesses and has already signed an agreement to sell North American refrigerated dough business to Ralcorp for $545 million.

In the fourth quarter, Sara Lee saw an 8% increase in adjusted net sales from continuing operations to $2.3 billion and a 9% reported net sales increase. There was a 40% increase in adjusted operating income to $189 million and a reported operating income increase of 19%.

"During the last six months, we have made significant strides toward creating two pure-play companies which are poised for success,” said Sara Lee Executive Chairman, Jan Bennink. “Our objective of building two simpler, faster and more entrepreneurial businesses is being realized. We have defined the organizational framework for our new companies and are continuing to build and restructure our teams for the future. Through our strategic divestments, we are achieving our objective of streamlining the portfolios to provide the best foundation for strong and focused businesses moving forward. We are heartened by the fact that we have been able to deliver solid results for fiscal 2011 while managing difficult commodity conditions and the internal challenges of the spin off. The inherent strength of these two businesses, combined with a new focus and orientation, give me confidence that the two companies will be highly successful when they separate in the first half of calendar 2012," concluded Bennink.

CEO Marcel Smits added, “Throughout fiscal 2011, our businesses have remained focused on operational performance. We delivered our updated guidance for adjusted EPS, adjusted operating income and net sales. We’ve also maintained a focus on cost reduction activities, lowering our corporate expenses by nearly $100 million over our prior fiscal year. We have introduced new products like Jimmy Dean Jimmy D’s and expanded successful brands like L’OR EspressO and Senseo into new geographies. I’m excited about the progress that we have made this year and continue to have great confidence in the long-term prospects of our businesses.”

Sara Lee’s North American Retail segment reported a 4% increase in adjusted net sales to $715 million, primarily driven by pricing actions. The segment reported strong new product performance with growth from Jimmy Dean Jimmy D's and Hearty Crumbles, and Hillshire Farm Low Sodium and Family Size. BallPark maintained its share leadership behind the successful introduction of New York Deli Style Beef Franks. These launches were more than offset by the negative volume impact from early pricing actions taken to offset commodity cost increases and the rationalization of lower margin promotional programs. Mix was marginally positive. On a reported basis, net sales declined 2% largely due to last year’s 53rd week.

Source: Sara Lee Corp.