TORONTO — Operating income for the Weston Foods division of George Weston Ltd. totaled C$45 million ($44 million) in the first quarter ended March 27. This compared with a loss of C$27 million in the same period of fiscal 2009. Weston said its operating income was affected positively by the benefits realized from continuous improvement initiatives and lower input costs, which were largely offset by higher restructuring charges and increased promotional spending.

Net sales were C$385 million ($377 million), down 12% from C$437 million a year ago. The sales decline reflected foreign currency translation, lower pricing and lower sales volumes during the quarter.

George Weston said fresh bakery sales fell approximately 0.6% in the first quarter, mainly due to lower pricing resulting from increased promotional spending.

“Volume increased in the first quarter of 2010 due to the growth in the Gadoua, D’Italiano and Wonder brands, partially offset by the continued softness in the food service market and lower sales of private label products,” George Weston said. “The introduction of new products, such as Gadoua MultiGo, Country Harvest Vitality, and Wonder Invisibles, contributed positively to branded sales during the first quarter of 2010.”

Frozen bakery sales decreased approximately 2.8% in the first quarter, mainly due to lower pricing, including increased promotional spending.

Biscuit sales, principally wafers, ice-cream cones, cookies and crackers, decreased approximately 9.9% in the first quarter of 2010, due to lower sales volumes and lower pricing in certain product categories. George Weston attributed the volume decline to softness in wafers and Girl Scout cookie sales in the first quarter.

“Weston Foods expects satisfactory operating performance for the remainder of 2010,” said W. Galen Weston, chairman and president. “The company is continuing its efforts to reduce costs through improved efficiencies and productivity and is focused on growing sales by optimizing product mix and product innovation to meet changing consumer buying preferences.”

Overall, net income at George Weston totaled C$42 million ($41 million) in the first quarter, equal to C$0.25 per share on the common stock, down sharply from C$863 million, or C$6.61, in the same period a year ago. Last year’s first quarter results included a net gain of C$921 million related to the sale of the fresh bread and baked goods business in the United States. Sales were up narrowly to C$7,177 million ($7,032 million) from C$7,022 million.