000147 Sara Lee Reports 2nd Quarter Sales of $5.3 Billion

Chicago - Sara Lee Corporation today announced increased sales and earnings for the second quarter of fiscal 2000 ended January 1.

Second quarter sales of $5.3 billion grew 1% over year-ago revenues. Unit volumes increased 7%, led by base business gains in the company's Household and Body Care, Branded Apparel, Coffee, and Foodservice businesses, and the positive impact of companies acquired over the last 12 months; excluding acquisitions, corporate unit volumes grew 1%. Net income for the quarter grew 5%, to $389 million, and diluted earnings per share of $.42 increased 8% over $.39 reported for the second quarter last year, excluding unusual items.

“We are pleased to report strong double-digit net income gains in four of Sara Lee's five lines of business during the second quarter, as well as increased volumes in many of our core categories,” said John H. Bryan, chairman and chief executive officer. “Results for our packaged meats and international bakery operations declined from a year ago, due in part to higher commodity costs.”

Comparisons for the quarter exclude a pre-tax charge of $76 million taken during the second quarter of fiscal 1999 for costs associated with the corporation's recall of certain packaged meats products. Including this charge, net income for the second quarter of fiscal 2000 grew 21% over the second quarter of fiscal 1999, and diluted earnings per share increased 24%.

For the first six months of fiscal 2000, reported sales of $10.3 billion increased 1% over the year-ago period. Unit volumes grew 6% including acquisitions, and rose 2% from base business results. Operating income increased 2%, excluding unusual items. Net income in the first half rose 6% to $647 million, and diluted earnings per share of $.70 grew 9% versus $.64 reported for the first half of fiscal 1999. Year-to-date results exclude the recall-related pre-tax charge of $76 million in the second quarter of fiscal 1999 and a $137 million pre-tax gain in the first quarter of fiscal 1999 related to the company's sale of its international tobacco operations. Including these unusual items, net income for the first half of fiscal 2000 declined by 2%; diluted earnings per share for the first half of fiscal 2000 rose 1%.

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