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GERBER LOWERS EARNINGS EXPECTATION

 GERBER LOWERS EARNINGS EXPECTATION
 FREMONT, Mich., Oct. 14 /PRNewswire/ -- Gerber Products' (NYSE: GEB)


Chairman Al Piergallini said today that the company's earnings for the second quarter ended Sept. 30 and for this fiscal year will be lower than current estimates by securities analysts.
 Earnings per share estimates by analysts for the second quarter are generally in the $0.49 to $0.51 range, and for the fiscal year in the $2.12 to $2.15 range.
 According to Piergallini, three factors are contributing to the reduced earnings -- lower than expected baby food business income, less than anticipated income from the Buster Brown apparel business and reduced license income from Bristol Myers for Gerber branded baby formula.
 "Earnings expectations, therefore, need to be lowered. For the second quarter, which we expect to report on Oct. 23, earnings per share will be slightly below the $0.48 reported in last year's second quarter. For the full year, we expect earnings per share to be in the $2.05 to $2.10 range," Piergallini said.
 "We had a shortfall in baby food shipments in September. There were sufficient customer orders to meet the expected rate of shipments, but logistic problems prevented shipment by month end. This coupled with higher marketing spending to meet increased competitive activity in the baby food category reduced the income from this business," Piergallini said. "We will make up some of this reduction in volume over the remainder of the fiscal year. However, because of the continued competitive activity and a 1.7 percent year-to-year decline in U.S. births, we are lowering our volume expectations for our fiscal year to a 1-3 percent increase compared to our previous estimate of a 2-4 percent increase."
 "The lower than expected earnings level from our Buster Brown apparel business will be a continuing issue in this fiscal year. Unit volume for Buster Brown is up versus last year. However, customers in the children's fashion market are looking for the more value-priced segments of Buster Brown's line because of the recessionary retail environment. As a result, Buster Brown's margins in the second quarter and for the remainder of the year were, and will be, lower than a year ago," Piergallini said.
 The company announced earlier this year that the Buster Brown subsidiary was going to be sold.
 "Finally, we now believe that license income from Bristol Myers for baby formula will be approximately $3 million below that received last year," Piergallini said.
 "Despite the downward revision in food volume estimates, the North American baby food and care business is making progress -- U.S. retail market shares for baby food and care are ahead of last year. It remains a very solid business with excellent gross margins. Its expected rate of earnings growth in this fiscal year is equal to last year's excluding the formula business. The Gerber Childrenswear business is improving in line with our expectations. The international business, especially the Latin American market, is strongly ahead of last year and offers significant growth opportunities. And, Gerber Life Insurance is again registering an excellent year. This gives me confidence that Gerber will continue its growth in the future," Piergallini added.
 -0- 10/14/92
 /CONTACT: Tim Croasdaile, vice president - Investor Relations & Corp. Affairs, of Gerber Products Company, 616-928-2718/
 (GEB) CO: Gerber Products Company ST: Michigan IN: FOD SU: ERP


JG -- DE012 -- 9789 10/14/92 11:01 EDT
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Date:Oct 14, 1992
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