Sara Lee Corp. (SLE) announced the opening of its modern sliced meats manufacturing facility in Kansas City, Kansas. The company will manufacture sliced deli meats under the Hillshire Farm and Sara Lee Deli brands at the new facility.
Sara Lee has invested more than $140 million in the new facility, indicating its commitment to the core protein category. This new facility at Kansas uses robotic systems and follows the ‘no touch’ process, meaning that the entire processing of the raw meat through the finished product will be full automated, which will also reduce process time by almost 50%.
Earlier in January 2011, Sara Lee had stated that it intends to split the company in to two, such that one company would focus primarily on North American Meats and the other on the international beverage and bakery business. The split is expected to be complete in fiscal 2012.
In furtherance of this goal, Sara Lee made a couple of acquisitions. The company added a small Brazilian coffee company under the international beverage and bakery business and the Aidells sausages business under the North American meats business.
In the recently concluded quarter, Sara Lee Corp. reported strong operating income growth, driven by significant improvement in operating income across the company, particularly in the North American Retail and International Beverage business segments.
Further, the company generates solid cash flow ($2.3 billion in the last quarter, reflecting a 142% growth year over year). The robust increase in cash flow is primarily because of the sell-offs that the company had done in order to become a leaner and more focused company.
For the upcoming quarter, Sara Lee expects 900 basis points of commodity cost increases in coffee and tea and some 700 basis points of higher expenses in North American Retail and Foodservice. The company expects to deal with this through pricing and productivity plans like its peers.
Based in Downers Grove, IL, Sara Lee is a global manufacturer and marketer of high-quality, brand-name products focused primarily on the meats, bakery and beverage categories, worldwide.
Sara Lee currently holds a Zacks #3 Rank, which implies a short term Hold rating.
SARA LEE (SLE): Free Stock Analysis Report
Zacks Investment Research
