DOWNERS GROVE (dpa-AFX) - Sara Lee Corp. (SLE) announced its strategy for its North American foods business, Hillshire Brands Company. The company expects its strategy to deliver annual revenue growth of 4-5 percent and an operating margin of 10 percent by fiscal year 2015 and have a near-term dividend payout ratio of 30-35 percent.
The company outlined Hillshire Brands' four drivers of profitability. They are higher revenues through innovation and increased brand support; Improved gross margins through new, higher-margin products, brand strength differentiation, and productivity; Increase marketing, advertising, and promotion (MAP) to five percent of revenue by fiscal year 2015 and make it more-effective; Further cost and productivity programs including a three-year plan to save $100 million and investment in insights and innovation to manage selling, general and administrative expenses.
Earlier today, Sara Lee said its meat business being spun-off on June 28 this year will be known as Hillshire Brands Co. Sara Lee last year revealed plans to separate into two publicly traded companies. One entity is Hillshire Brands Co. that will encompass the North American meat business and will trade on the New York Stock Exchange under the symbol 'HSH'. The other entity will be its international coffee and tea business named D.E Master Blenders 1753.
Sara Lee, which acquired the Hillshire Farm brand in 1971, had said that after the spin-off, Hillshire Brands' Foodservice division will still be known as Sara Lee Foodservice. Sean Connolly, chief executive officer of Sara Lee North American Retail and Foodservice, will become CEO of Hillshire Brands.
Copyright RTT News/dpa-AFX
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