TORONTO — Third-quarter performance at Weston Foods was in line with company expectations. Positives during the quarter included greater operational efficiencies, strong customer engagement and benefits from a transformation program.

“Weston Foods demonstrated momentum as the business continued to stabilize,” Galen G. Weston, chairman and chief executive officer of George Weston Ltd., said during a Nov. 19 conference call with analysts. “The improving trend is encouraging and gives us further confidence in our transformation toward becoming North America’s premier bakery.”

Operating income in the Weston Foods segment of George Weston Ltd. totaled C$23 million ($17.3 million) in the third quarter of fiscal 2019 ended Oct. 5, down 26% from C$31 million in the same period a year ago. Adjusted EBITDA, meanwhile, fell 12% to C$72 million ($54.2 million) from C$82 million. Sales increased 1.3% to C$638 million ($480.3 million) from C$630 million.

Luc Mongeau, president of Weston Foods (Canada) Inc., said the impact of price was “very limited” in the third quarter.

“We had a very solid summer in our summer buns business, and we continue to grow our donuts business,” he said. “The reality is that inflation is really becoming a theme in the food industry in North America. And for us, we’re focusing on driving efficiency and productivity gain to mitigate the impact of inflations.”

Mr. Mongeau said Weston launched premium donuts, including cookie-topped donuts, in the third quarter. The company also plans to add two production lines to accommodate its growing donut business in the fourth quarter. The new lines will help fill demand for a food service contract that Weston won in the United States, he said.

Mr. Mongeau said capital expenditure investments are split between its U.S. and Canadian operations. He said the company is investing in its bagel business in Canada and its donuts business in the United States. Additionally, the company added an artisan line in Gaffney, S.C.

“The growth of our business is split between retail and food service, with a slight bias in the U.S.,” he said.

Operating income at Weston Foods in the nine months ended Oct. 5 totaled C$45 million, down 27% from C$62 million in the same period a year ago. Net sales, meanwhile, increased 1.1% to C$1,633 million from C$1,615 million.

Overall, George Weston posted net earnings of C$83 million in the third quarter, equal to C$0.44 per share on the common stock, up 28% from C$65 million, or C$0.40 per share, in the same period a year ago. Sales increased to C$15,226 million from C$14,862 million.

In the nine months ended Oct. 5, George Weston sustained a loss of C$201 million, which compared with income of C$293 million in the same period a year ago. Net sales were C$38,002 million, up 3.1% from C$36,851 million.