Canadian food manufacturer and retailer George Weston has said it expects sales from its Weston Foods business to fall in 2012 after sales slid in the third quarter.
George Weston, which supplies branded and own-label bread and biscuits to the Canadian and US markets, forecast annual sales from Weston Foods to be "slightly lower" this year.
In August, the company, which also owns Canadian retail giant Loblaw, forecast annual sales from Weston Foods to be on flat.
Underlying third-quarter sales from Weston Foods fell 1.1% due to lower volumes.
Nevertheless, third-quarter adjusted operating income from Weston Foods increased from $87m to $94m thanks to lower commodity costs and improved productivity.
George Weston said it expects adjusted full-year operating margin from Weston Foods to be "consistent" with the 16% margin it has achieved in the first nine months of 2012.
For the group as a whole, net income fell 39.4% in the third quarter thanks to lower profits from Loblaw, which ran up higher labour costs and invested in its IT network and supply chain. Operating income was down 14.7%. Sales were up 1% thanks to higher sales from its Loblaw stores, although the retailer's same-store sales fell.
George Weston said it expects its full-year adjusted basic net earnings per common share to be down year-over-year, as Loblaw expects its profits to be down.
