ID NEWS: Sara Lee denies speculations about USF impact

Sara Lee Corp., Chicago, faces "critically important changes" after reporting worse-than-expected results and slashing its earnings forecast for the current quarter, according to the Chicago-Sun Times.

Among problematic issues is the suspension of three Sara Lee sales reps-one in meat, one in coffee and one in bakery-for "helping inflate" revenue of U.S. Foodservice (USF), Columbia, MD. (ID Web news 4/7/03) The reps had confirmed amounts of rebates and balances due from Sara Lee without authorization. The amounts were higher than what was owed.

Analysts theorize that the alleged scheme to inflate vendor rebates might "hurt Sara Lee more than it's willing to admit," says this newspaper. USF could be "trying to cut its buying" from Sara Lee, Romitha Malley, analyst with Goldman Sachs, speculates in the article. However, a Sara Lee spokesperson denies any such discussions with USF.

The major branded manufacturer says it is cooperating with the Securities and Exchange (SEC) investigation into the USF accounting scandal and that the issue will have no effect on its financial results.


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