Sara Lee Reports Third Quarter Results

Sara Lee Corporation, which markets a broad array of household and personal care products marketed primarily outside the U.S., today announced results for the third quarter of fiscal 2001 ended March 31, 2001. All results reflect continuing operations and exclude unusual items unless otherwise noted. Net sales rose 3% to $4.3 billion, and increased 6% in constant currency terms. Unit volumes increased 6% including acquisitions completed over the last 12 months, and fell 1% from base business operations.

Reported operating income fell 4% to $445 million in the quarter; on a constant currency basis, excluding the impact of the stronger dollar, operating income was flat with last year. Diluted earnings per share were $.27, equal to $.27 in the third quarter last year.

For the first nine months of fiscal 2001, net sales were $13.5 billion, up 4% over the same period a year ago; sales increased 8% on a constant currency basis. Unit volumes increased 8% including acquisitions, and declined 1% from base business operations. Reported operating income declined 1% to $1.5 billion, but increased 4% excluding the impact of the stronger dollar. Diluted earnings per share rose 2% to $.96, compared with $.94 in the same period of fiscal 2000.

“We remain intensely focused in our efforts to reshape Sara Lee’s product portfolio and business organization to improve the efficiency and profitability of our operations,” said C. Steven McMillan, president and chief executive officer of Sara Lee. “The slowdown in the U.S. economy, and increased competitive issues in several key markets, clearly had a negative impact on our third quarter results, but we continued our emphasis on product development and brand building, including a 9% increase in total corporate marketing spending in the quarter.”

The corporation’s results for the quarter and nine months ended March 31, 2001 were affected by the following unusual items related to the ongoing reshaping program announced in May 2000. That plan includes the ivestiture of noncore operations that do not fit with the company’s strategy to establish leading branded positions in food and beverage, intimates and underwear and household products, and the restructuring of a number of defined business activities.