Nobody At Sara Lee Doesn't Like Advertising, It Seems

A big boost in advertising in the final fiscal quarter pushed Sara Lee's fourth-quarter and annual earnings past Wall Street expectations.

The maker of Ball Park hot dogs and Jimmy Dean sausage increased ad spend by 24% in the last quarter, particularly for campaigns behind Hillshire Farm deli meats with its "Go Meat!" effort by TBWAChiatDay; new Senseo coffee flavors and Jimmy Dean sandwiches.

"If you look at our ... strategic brands, virtually all of them have new positionings and campaigns behind them," CEO Brenda Barnes told analysts during a call on Wednesday. "They are integrated really well to online, in store and promotional activities. Every dollar that we're spending is working harder to deliver the same messages."

For the year, Sara Lee increased ad spend by 7.9%, the company reported. Net sales were up 7.1% to $12.3 billion. Net income jumped 14-fold to $117 million--or 16 cents a share from $8 million, or 1 cent, a year earlier. Revenue rose 7.7%, to $3.2 billion in the quarter through June 30.

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Analysts had estimated profit of 13 cents.

The Jimmy Dean brand had another year of double-digit sales growth, which the company credited to successful new product launches. The Hillshire Farm and Ball Park brands each reported high single-digit sales growth in fiscal 2007, also building upon growth in the prior year. During fiscal 2007, the meats business increased or maintained market share in five of its eight packaged meats categories, Sara Lee said, citing IRI share data.

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