Yesterday investors heard from bigwigs at baked goods, apparel, and household products conglomerate Sara Lee
Now is a good time to be talking about Sara Lee because of what's going on in the bakery business, which accounted for $3.42 billion of the company's sales and $156 million of its operating income -- its year-over-year operating income growth rate was the company's largest by a substantial margin -- in the year ended July 3. (Total sales and operating income were $5.12 billion and $425 million, respectively.)
On Sara Lee's side, things are looking pretty good. Last year the operation finished well on the strength of its national branded products even as commodity prices and an anti-carbohydrate revolution stood in opposition. Business is still solid this year -- especially overseas, but in the U.S. too, its healthier bread offerings are selling well.
But now Sara Lee investors and executives must be wondering whether there's an opportunity to round out the not-so-healthy part of the company's bill of fare. With Hostess owner Interstate Bakeries (OTC BB: IBCIQ.PK) in bankruptcy, it may be that some very well-known bakery brands are on the market as the company looks to shore up its balance sheet.
Will Sara Lee make a move? After a year of big-time cash flow generation, it's certainly possible. Interstate's shares got a pop yesterday as this week's Barron's discussed the possibility of asset sales. Whatever the case, you can bet Sara Lee -- not to mention such competitors as Tasty Baking
Dividend-loving Mathew Emmert recommended Sara Lee for his Motley Fool Income Investor subscribers. You can take a free, no-obligation trial today to discover loads of companies that will pay you to own them.
Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story.