Sara Lee Reports Earnings for Second Quarter of Fiscal 2006.

CHICAGO Chicago, city, United States
Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. -- Sara Lee

For the musician, see Sara Lee (musician). For the band, see SaraLee (band).

Sara Lee Corporation (NYSE: SLE) is a global consumer-goods company based in Downers Grove, Illinois, USA. Corporation (NYSE NYSE

See: New York Stock Exchange :SLE SLE systemic lupus erythematosus.

SLE
abbr.
systemic lupus erythematosus

Systemic lupus erythematosus (SLE) ):

--Diluted earnings per share for the second quarter were $.57, helped by a gain on the disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of of the direct selling Direct selling is the marketing of products or services to consumers through sales tactics including presentations, demonstrations, and phone calls. It is sometimes also considered to be a sale that does not utilize a "middle man" such as a retail outlets, distributors or brokers. business

--Corporate unit volumes increased 1% in the second quarter, primarily driven by volume growth in the North American North American

named after North America.

North American blastomycosis
see North American blastomycosis.

North American cattle tick
see boophilusannulatus. retail meat and foodservice The foodservice (or food service) industry (US English; catering industry in British English) encompasses those places, institutions, and companies responsible for any meal eaten away from home. business segments

--Significant progress made on all three pillars of the transformation: organizing For other uses, see Organising model and Union organizer.

Organizing is the act of rearranging following one or more s. It can also be seen as the opposite of messing up.

One organized opposite could be disordered, since ordered is almost synonymous. the business around consumers and customers, achieving operational efficiency and focusing the portfolio

Sara Lee Corporation (NYSE:SLE) today announced that net sales Net Sales

The amount a seller receives from the buyer after costs associated with the sale are deducted.

Notes:
This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the second quarter of fiscal 2006, ending Dec. 31, 2005, were $4.45 billion compared to $4.51 billion in the prior year's second quarter, a decrease of 1%. During the second quarter, sales and unit volumes grew in four out of the eight business segments, specifically North American retail meats, North American retail bakery, Sara Lee Foodservice and international beverage.

Diluted earnings per share diluted earnings per share

An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) were $.57 for the second quarter of fiscal 2006, compared to $.41 for the year-ago period. A gain on the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of the direct selling business and a related tax benefit increased fiscal 2006 second quarter diluted di·lute
tr.v. di·lut·ed, di·lut·ing, di·lutes
1. To make thinner or less concentrated by adding a liquid such as water.

2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS by $.28 and $.07 per share, respectively. However, charges related to the implementation of the company's transformation plan and business exit activities reduced second quarter diluted EPS by $.08 per share. Operating results also were negatively impacted by various other factors including unfavorable foreign currency exchange rates, higher commodity, packaging and energy costs, and lower unit volumes at several businesses. Despite these factors, the North American retail meats, international bakery and branded apparel business segments reported higher operating segment income in the second quarter.

Impact of Significant Items on
Diluted Earnings per Share                Second Quarter   Six Months
                                          ----------------------------
                                            2006   2005   2006   2005
                                          ----------------------------
Diluted earnings per share, as reported     $.57   $.41   $.65   $.85
                                          ============================
Increase / (decrease) in EPS from:
   Impairment charges                          -      -   (.22)     -
   Transformation costs                     (.04)     -   (.06)     -
   Exit activities                          (.04)     -   (.06)     -
   Accelerated depreciation                 (.01)  (.01)  (.02)  (.02)
   Gain / (loss) on business dispositions   (.01)   .01    .01    .01
   Change in vacation policy                 .01      -    .01      -
   Sale of businesses                        .28      -    .28      -
   Tax benefit from direct selling
    transaction                              .07      -    .07      -
   Dutch tax rate change                       -    .03      -    .03
   Curtailment gain                            -    .01      -    .02
                                          ----------------------------
   Total impact of significant items(a)     $.26   $.04     $-   $.04
                                          ============================

(a) Amounts are rounded and may not add to the total.

"In the second quarter, we delivered results that were consistent with our forecasts. Earnings per share were influenced by several significant items, but our underlying results actually exceeded our guidance for the period," said Brenda C. Barnes Brenda C. Barnes is the president, chairman and chief executive of Sara Lee, and previously was the first female CEO of Sara Lee. She has been listed in Forbes power rankings of The World's 100 Most Powerful Women since 2004. , chairman and chief executive officer of Sara Lee Corporation.

"We believe our transformation initiatives are beginning to have an impact, particularly for the Sara Lee Food & Beverage and Sara Lee Foodservice businesses, which delivered substantially better results in the second quarter than in the first. I am encouraged that these businesses are showing an upward trend. We have been especially pleased with the success of the Sara Lee fresh bread brand, which became the U.S. market leader in the fresh bakery category during the quarter," added Barnes Barnes, former municipal borough, SE England. See Richmond upon Thames. . "At Sara Lee International, household and body care is facing some challenges and we are taking appropriate actions to improve performance. Our international beverage business continued to see commodity cost pressure that hampered results. European European

emanating from or pertaining to Europe.

European bat lyssavirus
see lyssavirus.

European beech tree
fagussylvaticus.

European blastomycosis
see cryptococcosis. meats results were lower due to the impact of currency and higher spending on media advertising and promotions, while international bakery delivered a much improved quarter, returning to more typical bottom line growth.

"Overall, the transformation is proceeding as we anticipated and we are now beginning to see the benefits of the multitude MULTITUDE. The meaning of this word is not very certain. By some it is said that to make a multitude there must be ten persons at least, while others contend that the law has not fixed any number. Co. Litt. 257. of changes that we have made over the past year," concluded Barnes.

Total media advertising and promotion (MAP) spending for continuing operations continuing operations

Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the decreased 3% in the second quarter, primarily because of lower spending behind retail meat and branded apparel brands in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , the weaker euro compared to the year-ago period and a shift to driving the business through strategic pricing actions and other marketing activities such as coupons COUPONS. Those parts of a commercial instrument which are. to be cut, and which are evidence of something connected with the contract mentioned in the instrument. They are generally attached to certificates of loan, where the interest is payable at particular periods, and, when the that are not captured in MAP spending.

The consolidated con·sol·i·date
v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates

v.tr.
1. To unite into one system or whole; combine: unit volumes for the corporation increased 1% during the second quarter of fiscal 2006, driven by unit volume growth in four out of eight business segments, specifically North American retail meats, North American retail bakery, Sara Lee Foodservice and international beverage.

Transformation Plan Update - Second Quarter Fiscal 2006

In February February: see month. 2005, Sara Lee embarked on a bold, multi-year, strategic plan to transform the company and tighten its focus on the food, beverage, and household and body care categories. The transformation plan is designed to dramatically improve Sara Lee's performance and better position the company for long-term Long-term

Three or more years. In the context of accounting, more than 1 year.

long-term

1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth. The plan is built upon three pillars and a second quarter update for each pillar pillar, freestanding columnar supporting member. It is a general term, little used as an exact architectural definition except as applied to an upright support in the medieval styles, consisting of an assemblage of juxtaposed shafts and moldings; unlike the column, follows.

Pillar 1: Organize organize /or·ga·nize/ (or´gan-iz)
1. to provide with an organic structure.

2. to form into organs.

or·gan·ize
v.
1. the business around consumers, customers and geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map.

geographic

pertaining to geography. markets

The new organization design for the two continuing North American businesses - Sara Lee Food & Beverage and Sara Lee Foodservice - was completed, while the redesign re·de·sign
tr.v. re·de·signed, re·de·sign·ing, re·de·signs
To make a revision in the appearance or function of.

re of the corporate functions Procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. , Information Systems and Process Improvement to Excellence (PIE pie, meat, fish, fowl, fruit, or vegetables baked with a crust of pastry, or pastry shells filled with custard or pudding. The pies of the Romans, especially at banquets in the days of the empire, were often elaborate concoctions, such as the showpieces in which were ) is well underway. Since the beginning of fiscal 2006, Sara Lee has hired more than 500 new employees in the United States. The plan for relocating the management of the new North American organization to a single headquarters in Downers Grove Downers Grove, village (1990 pop. 46,858), Du Page co., NE Ill.; settled 1832, inc. 1873. Downers Grove has undergone population growth and commercial development that include the construction of new office complexes. , Ill., is on track for completion in the fall of 2006. Sara Lee International continues to move forward with the consolidation of its local offices into one centralized cen·tral·ize
v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es

v.tr.
1. To draw into or toward a center; consolidate.

2. location per country or region, supported by a shared services shared services,
n.pl the administrative, clinical, or other service functions that are common to two or more hospitals or their health care facilities and used jointly or cooperatively by them. organization for back-office functions. The international business also made progress with its planned workforce reduction.

Pillar 2: Achieve operational efficiency to fund growth

During the second quarter, the company made significant progress with the implementation of operational efficiency initiatives such as centralized procurement, common information technology (IT) systems and the PIE program. The new global procurement organization is developing cost reduction initiatives focused on - among other activities - commodities, packaging and indirect spending. The global information systems group reached an important milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band).

A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. with the on-time and on-budget upgrade of the bakery SAP sap, fluid in plants consisting of water and dissolved substances. Cell sap refers to this fluid present in the large vacuole, or cell cavity, that occupies most of the central portion of mature plant cells. system to the most current SAP release without any business interruptions. This IT platform will ultimately support all of North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . And, the PIE team advanced its four process improvement projects - innovation, pricing/trade spending, sales and operations planning, and business planning - by mapping and designing process flows.

Pillar 3: Focus the portfolio

To date, Sara Lee has made significant progress toward its portfolio transformation. In the second quarter, the company completed the sale of its direct selling business and its U.S. retail coffee business, excluding Senseo Senseo is a registered trademark for a coffee brewing system from Dutch companies Philips and Douwe Egberts, a subsidiary of Sara Lee Corporation. The two main characteristics of the system are its coffee pods (called pads in some countries) and its design. . In November November: see month. , the company announced that it had reached an agreement to sell its European nuts and snacks business to PepsiCo PepsiCo, Incorporated (NYSE: PEP) is a global American beverage and snack company. The company manufactures, markets and sells a variety of carbonated and non-carbonated beverages, as well as salty, sweet and grain-based snacks, and other foods. for EUR EUR

In currencies, this is the abbreviation for the Euro.

Notes:
The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 130 million; the transaction is expected to close in the fourth quarter of fiscal 2006. Preparations for the spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. to shareholders of the Branded Apparel, Americas/Asia business, under the name Hanesbrands Inc., are on track for completion in the June June: see month. - September September: see month. , 2006 timeframe. In January January: see month. 2006, after the close of the second quarter, Sara Lee announced that it had signed an agreement to acquire Butter-Krust Baking baking: see cooking.

baking

Process of cooking by dry heat, especially in an oven. Baked products include bread, cookies, pies, and pastries. , a Sunbury Sunbury, city (1990 pop. 11,591), seat of Northumberland co., E central Pa., on the Susquehanna River at the confluence of its north and west branches; laid out 1772, inc. 1921. It is in an agricultural area with grain, apples, livestock, and dairying. , Pa.-based, privately held, fresh bakery business, for approximately ap·prox·i·mate
adj.
1. Almost exact or correct: the approximate time of the accident.

2. $72 million. This acquisition will enable Sara Lee to expand its mid-Atlantic Adj. 1. mid-Atlantic - of a region of the United States generally including Delaware; Maryland; Virginia; and usually New York; Pennsylvania; New Jersey; "mid-Atlantic states"
middle Atlantic distribution coverage to better serve its customers and to reach more than 20 million additional consumers, increasing its U.S. market coverage from just over 70% to nearly 80% of the country. The transaction is subject to regulatory reg·u·late
tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates
1. To control or direct according to rule, principle, or law.

2. approvals and other customary closing conditions. Finally, the sale of the branded apparel business in Europe Europe (y

r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). to an affiliate Affiliate

Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. of Sun Capital Partners, Inc., is expected to close in the near future. Sara Lee's branded apparel U.K. operation, Sara Lee Courtaulds Courtaulds was an English based manufacturer of fabric, clothing, artificial fibres, and chemicals. Foundation
George Courtauld returned to England in 1794, and founded a silk, crepe and textile business in north Essex at Pebmarsh – George Courtauld & Co – , which manufactures private-label clothing for retailers, is not part of this transaction.

Separately, the company currently is evaluating options to maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. shareholder value relative to its European meats business, and no longer expects to complete a sale in the third quarter of fiscal 2006, as previously announced. Regardless of decisions about the business, the company remains dedicated to its capital structure commitments, including buying back $2 billion of stock over the next several years, reducing debt by at least $1.5 billion and paying a dividend of $.79 per share for fiscal 2006. The company also continues to expect total after-tax af·ter-tax also af·ter·tax
adj.
Relating to or being that which remains after payment, especially of income taxes: after-tax profits.  proceeds from all dispositions to exceed $3 billion with more than half coming from the dividend from the spin-off of Branded Apparel, Americas/Asia.

Year-to-Date Year-to-date (YTD)

The period beginning at the start of the calendar year up to the current date. Financial Highlights

For the first six months of fiscal 2006, ending Dec. 31, 2005, Sara Lee reported net sales of $8.64 billion, down 1% over the same period a year ago. Diluted EPS for the first half of fiscal 2006 were $.65, compared to $.85 for the year-ago period. Net cash flow from operating activities was approximately $850 million for the first six months of fiscal 2006, compared to approximately $800 million in the comparable period last year. Total MAP spending decreased 2% compared to the first half of fiscal 2005 and corporate unit volumes decreased 1% in the six month period year over year.

Business Performance Review

In the second quarter of fiscal 2006, the U.K. branded apparel private-label division has been reported as a discontinued operation discontinued operation

A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. . Prior year amounts have been restated to conform with the current year's earnings presentation.

Sara Lee Food & Beverage

The Sara Lee Food & Beverage business is the company's North American retail food group, comprising the retail meats and retail bakery segments, the latter including the Senseo single-serve coffee innovation.

North American Retail Meats

Net sales in the North American retail meats segment were up 4% to $672 million on the strength of an 8% increase in unit volumes, driven by new product success and strategic pricing actions. Sales increased despite the negative sales impact of the disposition of two brands in the prior year.

Reported operating segment income for the second quarter was $50 million, an increase of $1 million or 1%, which included a $20 million net decrease related to transformation charges, exit activities and other significant items as described in the attached Operating Results by Business Segment schedule. The remaining operating segment income increase of $21 million, or 46%, was primarily due to higher unit volumes, favorable fa·vor·a·ble
adj.
1. Advantageous; helpful: favorable winds.

2. Encouraging; propitious: a favorable diagnosis.

3. sales mix sales mix

See product mix. and lower commodity costs, partially offset by significantly higher energy costs and the impact of strategic pricing actions. During the quarter, dollar-share gains were recorded in six of the eight retail packaged meat categories in which Sara Lee competes, primarily resulting from improved marketing execution and the success of strategic pricing actions. Sales of Jimmy Dean Skillets, Breakfast Sandwiches A breakfast sandwich is a sandwich served at breakfast. Breakfast sandwiches typically are made using breakfast meats, breads, eggs and cheese. These sandwiches were typically regional specialties until fast food restaurants began serving breakfast. and Breakfast Sausage A breakfast sausage (or country sausage) is a type of fresh pork sausage usually served at breakfast. It is not cured or smoked. It is essentially highly seasoned ground meat, so it does not keep and should be stored and handled appropriately. drove double-digit dou·ble-dig·it
adj.
Being between 10 and 99 percent: double-digit inflation.  sales growth for the brand, while sales of the Hillshire Farm Hillshire Farm is a brand of meat products marketed by Sara Lee. External link

Official website

brand grew on the strength of Smoked Sausage sausage, food consisting of finely chopped meat mixed with seasonings and, often, other ingredients, all encased in a thin membrane. Although sausages were made by the ancient Greeks and Romans, they were usually plain and unspiced; in the Middle Ages people began to and Deli Select Ultra Thin lunchmeats performance.

For the six months ending Dec. 31, 2005, North American retail meats reported net sales of $1.29 billion, up 3% from $1.25 billion in the year-ago period. Operating segment income for the first six months of fiscal 2006 was $67 million, compared to $73 million in the corresponding period of fiscal 2005, with the decline resulting from restructuring charges restructuring charge

The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , transformation costs and non-recurring gains on business dispositions reported in the first half of fiscal 2005.

North American Retail Bakery (including Senseo coffee)

North American retail bakery posted a 3% increase in net sales to $463 million driven by overall unit volume growth and favorable sales mix in the U.S. fresh bakery business. Volume growth was driven by Sara Lee fresh bread sales, partially offset by the exit of certain regional bread business in fiscal 2005. Operating segment income decreased by $6 million from a loss of $11 million to a loss of $17 million. $10 million of the decrease related to transformation charges, exit activities and other significant items described in the attached Operating Results by Business Segment schedule. The remaining operating segment income increase of $4 million, or 31%, was primarily due to increased unit volumes, improved productivity and certain price increases, which were partially offset by higher energy and labor costs and increased MAP spending on Senseo.

The Sara Lee fresh bakery brand, which was primarily a small West Coast bagel business four years ago, has rapidly surpassed competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. in the U.S. fresh bakery category. During the second quarter, Sara Lee became the leading fresh bakery brand in America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. with a 5.7% share of the market in the combined packaged bread, buns, rolls, bagels and English 1. English - (Obsolete) The source code for a program, which may be in any language, as opposed to the linkable or executable binary produced from it by a compiler. The idea behind the term is that to a real hacker, a program written in his favourite programming language is muffins category according to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3. Information Resources (1) The data and information assets of an organization, department or unit. See data administration.

(2) Another name for the Information Systems (IS) or Information Technology (IT) department. See IT. , Inc. share data. Sara Lee Soft & Smooth whole-grain white bread, which was launched only six months ago, has been the best-selling best·sell·er also best seller
n.
A product, such as a book, that is among those sold in the largest numbers.

best fresh bread stock keeping unit (SKU (StockKeeping Unit) The number of one specific product available for sale. If a hardware device or software package comes in different versions, there is an SKU for each one.

SKU - stock-keeping unit ) in the United States since its launch, and the product was selected as one of BusinessWeek's best new products of 2005. At the end of the quarter, the Sara Lee brand launched its first products in the sweet breakfast breads and English muffins segments, expanding its portfolio of products that use a blend “Blending” redirects here. For alpha blending, see Alpha compositing.
In linguistics, a blend is a word formed from parts of two other words. These parts are sometimes, but not always, morphemes. of whole-grain and refined-grain flour flour, finely ground, usually sifted, meal of grain, such as wheat, rye, corn, rice, or buckwheat. Flour is also made from potatoes, peas, beans, peanuts, etc. Usually it refers to the finely ground and bolted (i.e. to preserve great taste and offer nutritional nutritional

pertaining to or emanating from nutrition.

nutritional anemia
see nutritional anemia.

nutritional assessment benefits.

Unit volumes and sales for Senseo single-serve coffee pods Coffee pods are pre-packaged coffee beans in their own filter. Senseo is a patented coffee maker which uses these. A court ruled that their patent does not cover the pods, and that other companies may manufacture and sell pods that are compatible with the Senseo system. increased significantly compared to last year's second quarter. During the 2005 holiday season, Sara Lee's business partner Philips (company) Philips - A Dutch multinational electronics company. It produces washing machines, consumer electronics, integrated circuits and light bulbs. Together with Sony they set the Compact Disc standard, especially Green Book CD-ROM. Electronics sold 229,000 Senseo coffee machines in the United States, bringing the total number of machines in U.S. homes to more than 630,000.

For the six months ending Dec. 31, 2005, North American retail bakery reported net sales of $923 million, up from $920 million in the year-ago period. An operating segment loss of $21 million was reported for the first six months of fiscal 2006, compared to a loss of $2 million in the corresponding period of fiscal 2005, with the decline resulting primarily from restructuring charges, transformation costs and a non-recurring curtailment Curtailment

The act of contracting or reducing operations of a company in the hope of bringing it financial or operational stability. This management technique is often used when a company has grown too fast and is unable to effectively manage its operations. gain in the first half of fiscal 2005.

For the second quarter, net sales for the Sara Lee Food & Beverage business, on an aggregate basis, increased 3% to $1.14 billion. Quarterly profits were $33 million, down 11% from the prior year. For the first half of fiscal 2006, Sara Lee Food & Beverage reported a net sales increase of 2% to $2.21 billion and profits of $46 million compared to $71 million in the year-ago period.

Sara Lee Foodservice

The Sara Lee Foodservice business is a leading supplier of coffee, meats and bakery solutions to a broad base of foodservice operators across North America.

Sara Lee Foodservice unit volumes increased 5% during the second quarter, primarily due to strong volumes for refrigerated re·frig·er·ate
tr.v. re·frig·er·at·ed, re·frig·er·at·ing, re·frig·er·ates
1. To cool or chill (a substance).

2. To preserve (food) by chilling. dough, hot dogs, corn dogs corn dog
n.
A frankfurter that is encased in corn bread batter before being baked or fried, usually served on a stick. , cooked breakfast sausages and lunchmeats. Liquid coffee concentrate unit volumes increased by double-digits in the second quarter, but this was more than offset by volume declines in the traditional roast and ground coffee business.

For the second quarter of fiscal 2006, Sara Lee Foodservice reported net sales of $609 million, an increase of 5% from $580 million in the second quarter of fiscal 2005. Sales grew as a result of increased overall unit volumes and higher coffee prices, partially offset by an unfavorable sales mix. Operating segment income for the second quarter of fiscal 2006 was $56 million, compared to $62 million for the corresponding period a year ago. Operating segment income in the quarter was negatively impacted by transformation costs, a non-recurring curtailment gain in the prior year's period and increased energy costs.

During the quarter, Sara Lee Foodservice made progress on the opportunity to cross-sell its meats, bakery and coffee products to existing customers that previously only had bought products from one or two of the three categories. Strong volumes for BK Joe, Burger King's new coffee concept based on Sara Lee's proprietary liquid coffee concentrate, was another success of the segment's customer focus initiatives.

For the six months ending Dec. 31, 2005, Sara Lee Foodservice reported net sales of $1.15 billion, up 2% from $1.12 billion in the prior year's first half. Operating segment income for the first six months of fiscal 2006 was $72 million, a decrease of 32% compared to $105 million for the same period in fiscal 2005, primarily because of lower profits in the roast and ground coffee business, higher selling, general and administrative (SG&A) expenses, transformation costs and a comparison to a non-recurring curtailment gain in first half of fiscal 2005.

Sara Lee International

The Sara Lee International business comprises international beverage, European meats, international bakery and the global household and body care segment. Results for the European meats business, which were formerly included in international beverage, are now included in Sara Lee International as a separate business segment.

International Beverage

International beverage unit volumes were up 1% in the second quarter of fiscal 2006, particularly driven by volume growth in Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. , the Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. and Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). . Net sales in the international beverage segment increased 1% to $598 million in the second quarter. Reported operating segment income decreased $47 million or 42%, of which $42 million of the decrease related to transformation charges, exit activities and other significant items as described in the attached Operating Results by Business Segment schedule. The remaining operating segment income decrease of $5 million, or 5%, was primarily due to higher commodity costs and a challenging retail environment in Europe.

For the first half of fiscal 2006, international beverage sales were $1.12 billion, up 2% from $1.10 billion in the year-ago period. Operating segment income for the first six months of fiscal 2006 was $126 million, compared to $210 million in the corresponding period of fiscal 2005, or a decrease of 40%, resulting primarily from lower margins, lower first quarter unit volumes, transformation costs and unfavorable foreign currency exchange rates.

European Meats

Unit volumes in the European meats segment were down 1% in the second quarter, primarily due to weakness in France. Net sales for the European meats segment decreased 8% to $285 million in the second quarter due to unfavorable foreign currency exchange rates and slightly lower unit volumes. Operating segment income was $21 million in the second quarter of fiscal 2006, compared to $31 million in the year-ago period, the decline was primarily due to unfavorable foreign currency effects Foreign Currency Effects

The extent to which the changes in a foreign currency affects the return on a foreign investment.

Notes:
Foreign investments are complicated by the currency fluctuation and conversion between countries. , restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs and higher MAP spending, the latter particularly in France behind the Aoste brand.

For the six months ending Dec. 31, 2005, European meats reported net sales of $569 million, down 3% from $588 million in the year-ago period. Operating segment income for the first six months of fiscal 2006 was $51 million, compared to $64 million in the first half of fiscal 2005, with the 20% decline resulting primarily from restructuring charges, higher MAP spending and unfavorable foreign currency exchange rates.

International Bakery

Unit volumes in the international bakery segment were flat in the second quarter as unit volume growth in the European refrigerated dough business was offset by lower unit volumes for the fresh bakery business in Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. and frozen bakery in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. . Net sales for the international bakery segment decreased 5% to $190 million in the second quarter due primarily to unfavorable foreign currency exchange rates. Operating segment income was $21 million in the second quarter of fiscal 2006, compared to $20 million in the year-ago period. The increase of 3% was mainly due to procurement savings and higher margins that more than offset unfavorable foreign currency effects.

For the six months ending Dec. 31, 2005, international bakery reported net sales of $382 million, down 1% from $387 million in the year-ago period. Operating segment income for the first six months of fiscal 2006 was $33 million, compared to $41 million in the first half of fiscal 2005, with the 20% decline resulting primarily from restructuring charges, higher MAP spending and unfavorable foreign currency exchange rates.

Household and Body Care

Unit volumes in the household and body care segment's four core categories declined 2% in the second quarter, as higher unit volumes for body care, shoe care and insecticides insecticides, chemical, biological, or other agents used to destroy insect pests; the term commonly refers to chemical agents only. Chemical Insecticides
were more than offset by lower unit volumes for air care, the latter particularly in Europe. In the body care category, the Sanex brand continued to perform well, driven by new products such as Sanex Excel A full-featured spreadsheet for Windows and the Macintosh from Microsoft. It can link many spreadsheets for consolidation and provides a wide variety of business graphics and charts for creating presentation materials. , a concentrated deodorant deodorant /de·odor·ant/ (de-o´der-int)
1. masking offensive odors.

2. an agent that so acts.

de·o·dor·ant
n. spray (networking) spray - A Unix command that sends packets to a host and reports performance statistics. The number of packets, delay between packets and packet length can all be specified. , and Sanex Vitality vi·tal·i·ty
n.
1. The capacity to live, grow, or develop.

2. Physical or intellectual vigor; energy. , a body care line for women. However, growth for the Sanex brand could not fully offset sales softness in some of the other bath and shower brands, particularly Radox Radox is a brand of herbal bubble bath and shower gels available in the United Kingdom. It comes in both bath salt and liquid form. in the United Kingdom and Duschdas in Germany. After a challenging first quarter, sales rebounded for Kiwi kiwi (kē`wē) or apteryx (ăp`tərĭks), common name for the smallest member of an order of primitive flightless birds related to the ostrich, the emu, and the cassowary. shoe care products, particularly in the United States, driving sales growth in the shoe care category. Strong sales in India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. and Malaysia Malaysia (məlā`zhə), independent federation (2005 est. pop. 23,953,000), 128,430 sq mi (332,633 sq km), Southeast Asia. The official capital and by far the largest city is Kuala Lumpur; Putrajaya is the adminstrative capital. drove sales growth in the insecticides category. Air care unit volumes and sales continued to decline, particularly in Europe where the Ambi Pur Pur (pûr) [Heb.,=lot], in the Bible, lot cast by Haman to determine the time for the murder of the Jews. See Purim. brand is facing tough price competition. The company continues to focus on new product development and product re-launches to reverse the trend.

The lower overall unit volume, combined with lower selling prices and unfavorable foreign currency exchange rates, translated into lower net sales for household and body care in the second quarter, down 8% to $451 million. Reported operating segment income declined $46 million, or 57% in the second quarter of fiscal 2006, of which $28 million of the decrease related to transformation charges, exit activities and other significant items as described in the attached Operating Results by Business Segment schedule. The remaining operating segment income decrease of $18 million, or 29%, was primarily due to lower unit volumes and margins, especially in air care.

For the first six months of fiscal 2006, household and body care sales were $897 million, down 6% from $953 million in the year-ago period. Operating segment income for the first half of fiscal 2006 was $115 million, compared to $149 million in the corresponding period of fiscal 2005, or a decrease of 23%, resulting primarily from lower unit volumes and margins, transformation costs and unfavorable foreign currency exchange rates.

On a combined basis, net sales for the Sara Lee International business were down 4% to $1.52 billion in the second quarter of fiscal 2006, while profits were down 42% to $142 million. Year-to-date, Sara Lee International net sales were $2.97 billion, down 2%, and profits were down 30% to $325 million.

Branded Apparel

Branded Apparel markets a portfolio of apparel brands in the outerwear (e.g., T-shirts, casualwear ca·su·al·wear
n.
Attire for wear on casual occasions: wore casualwear to the outdoor reception.  and activewear), innerwear in·ner·wear
n.
Clothing, such as lingerie, designed to be worn next to the skin. (e.g., underwear, socks and intimate apparel) and hosiery hosiery

Knit or woven coverings for the feet and legs, worn inside shoes. In the 8th century BC, Hesiod referred to linings for shoes; the Romans wrapped their feet, ankles, and legs in long strips of leather or woven cloth. categories sold primarily in the Americas/Asia. The Branded Apparel business is currently preparing to be spun off from Sara Lee between June and September, 2006, under the new corporate name Hanesbrands Inc.

For the second quarter of fiscal 2006, Branded Apparel reported net sales of $1.18 billion, down 5% compared to the same period last year. This decrease was largely driven by overall volume declines of 3%, primarily due to planned exits of certain low-margin fleece fleece, mat of wool formed by shearing a sheep in one continuous operation. The average fleece weighs from 5 to 10 lb (2.3–4.5 kg); in highbred wool sheep such as the American Merinos a ram's fleece may reach 30 lb (13.6 kg). and sleepwear businesses and continued weakness in the hosiery category. Sales volumes were strong for Hanes HANES Health And Nutrition Examination Survey A series of dietary surveys first carried out in 1971 by the NIH–US; HANES I determined that Americans consumed suboptimal levels of iron, calcium and vitamins A and C; HANES III is under the auspices of the men's and boy's underwear and C9 by Champion athleticwear.

Operating segment income for the second quarter of fiscal 2006 was $169 million, compared to $154 million for the second quarter of fiscal 2005, up 10%. Improved inventory management, lower SG&A expenses and favorable cotton costs more than offset the effects of lower unit volumes and pricing pressure during the quarter.

Year-to-date, Branded Apparel reported net sales of $2.32 billion, down 6% from $2.46 billion in the prior year's first half. Operating segment income for the first six months of fiscal 2006 was $291 million, a decrease of 3% compared to $300 million for the same period in fiscal 2005.

Net Interest Expense, General Corporate Expenses, Tax Rate and Share Repurchase Share Repurchase

A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued.

Net interest expense was $57 million for the second quarter of fiscal 2006, an increase of $11 million compared to the year-ago period, resulting from higher net average interest rates. General corporate expenses were $80 million in the second quarter, compared to $74 million in the comparable period of the prior year. The effective tax rate for continuing operations was 19.2% for the second quarter of fiscal 2006, compared to 12.7% in last year's second quarter. During the second quarter of fiscal 2006, the company did not repurchase re·pur·chase
tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es
To buy (something) again.

n.
The act of buying something that one previously sold or owned.

Noun 1. any shares of its common stock. Approximately 87 million shares remain authorized au·thor·ize
tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es
1. To grant authority or power to.

2. To give permission for; sanction: by the board of directors for repurchase.

Outlook

Sara Lee's management currently expects diluted EPS for the third quarter of fiscal 2006 to fall within a range of $.21 to $.26, compared to $.24 in the year-ago period. The third quarter guidance does not include any results for discontinued operations Discontinued operations

Divisions of a business that have been sold or written off and that no longer are maintained by the business. , gains or losses on dispositions or any charges associated with the transformation that may be recognized during the quarter.

Full-year fiscal 2006 diluted EPS for the corporation are expected to be in a range of $1.17 to $1.27, compared to $.90 in fiscal 2005, which was negatively impacted by $.55 per share in net charges related to significant items. The current full-year guidance includes only those significant items reported in the first and second quarters of fiscal 2006 (including impairment Impairment

1. A reduction in a company's stated capital.

2. The total capital that is less than the par value of the company's capital stock.

Notes:
1. This is usually reduced because of poorly estimated losses or gains.

2. charges, exit activities, transformation costs and gains on business dispositions), and they had no net impact on EPS. It does not include any results for discontinued operations, transformation related charges, gains or losses from business dispositions, or further impairment charges that may occur in subsequent quarters.

The company expects to complete its $1 billion share repurchase plan share repurchase plan

A corporation's plan for buying back a predetermined number of its own shares in the open market. Institution of a share repurchase plan derives from management's view that the company has limited outside investment opportunities and either at the end of fiscal 2006 or early in fiscal 2007. The repurchase will likely occur after the spin-off of Branded Apparel, Americas/Asia and will provide better economic value for the company post-spin. There are no benefits from the additional share repurchase in the EPS guidance for fiscal 2006. The company expects to repurchase another $1 billion of stock in the early years of the transformation.

For the third quarter of fiscal 2006, operating segment income is expected to increase compared to last year's third quarter in five of the eight business segments: North American retail meats and retail bakery, foodservice, international bakery and Branded Apparel, Americas/Asia. The company currently expects base business profitability to improve over the course of the fiscal year for each of its business segments with the exception of European Meats and Household and Body Care.

Webcast

Sara Lee Corporation's review of second quarter results for fiscal 2006 will be broadcast live via the Internet Internet

Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the today at 9 a.m. CST CST
abbr.
1. Central Standard Time

2. convulsive shock treatment

CST Central Standard Time

Noun 1. . During the webcast, the company will discuss second quarter results and provide an outlook for the third quarter and full fiscal year. The live webcast can be accessed at www.saralee.com and is anticipated to conclude by 10 a.m. CST. For people who are unable to listen to the webcast live, the earnings review will be available two hours following the completion of the webcast in the Investors section of the Sara Lee corporate Web site until Wednesday Wednesday: see week. , Aug. 2, 2006.

Forward-looking Statements forward-looking statement

A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections.

This news release contains forward-looking statements regarding Sara Lee's business prospects, costs and operating results, including statements contained under the heading "Outlook," and the timing and expected net proceeds Net Proceeds

The amount received after all costs are deducted from the sale of a piece of property or security.

Notes:
In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from planned business divestitures. In addition, from time to time, in oral statements and written reports, the corporation discusses its expectations regarding the corporation's future performance by making forward-looking statements preceded by terms such as "expects," "likely" or "believes." These forward-looking statements are based on currently available competitive, financial and economic data and management's views and assumptions regarding future events. Such forward-looking statements are inherently uncertain, and investors must recognize that actual results may differ from those expressed or implied Inferred from circumstances; known indirectly.

In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in the forward-looking statements. Consequently, the corporation wishes to caution readers not to place undue reliance on any forward-looking statements. Among the factors that could cause Sara Lee's actual results to differ from such forward-looking statements are factors relating to relating to relate prep → concernant

relating to relate prep → bezüglich +gen, mit Bezug auf +acc :

--Sara Lee's relationship with its customers, such as (i) a significant change in Sara Lee's business with any of its major customers, such as Wal-Mart

Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. , the corporation's largest customer, including changes in the level of inventory these customers maintain; and (ii) credit and other business risks associated with customers operating in a highly competitive retail environment;

--The consumer marketplace, such as (iii) significant competition, including advertising, promotional and price competition, and changes in consumer demand for Sara Lee's products; (iv) fluctuations in the availability and cost of raw materials, Sara Lee's ability to increase product prices in response and the impact on Sara Lee's profitability; (v) the impact of various food safety issues on sales and profitability of Sara Lee products; and (vi) inherent risks in the marketplace associated with new product introductions, including uncertainties about trade and consumer acceptance;

--Sara Lee's transformation plan, such as (vii) Sara Lee's ability to complete planned business dispositions, and the timing and terms of such transactions; (viii) Sara Lee's ability to obtain a favorable tax ruling, and any other required regulatory approvals, on the proposed spin-off of its Branded Apparel, Americas/Asia business; (ix) Sara Lee's ability to effectively integrate its remaining businesses into the contemplated new business structure, including Sara Lee's ability to transition customers to different Bakery brands, transition to common information systems and processes and manage plant capacity and workforce reductions; (x) Sara Lee's ability to generate the anticipated efficiencies and savings from the transformation plan; and (xi) the impact of the transformation plan on Sara Lee's relationships with its employees, its major customers and vendors and Sara Lee's cost of funds Cost of Funds

The interest rate paid on an outstanding loan.

Notes:
Money isn't free! Cost of funds is the cost of borrowing money.
See also: Interest Rate

Cost of funds

Interest rate associated with borrowing money. ;

--Sara Lee's international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. , such as (xii) impacts on reported earnings from fluctuations in foreign currency exchange rates, particularly the euro, given Sara Lee's significant concentration of business in Western Europe Western Europe

The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). ; and (xiii) Sara Lee's ability to continue to source production and conduct manufacturing and selling operations in various countries due to changing business conditions, political environments, import quotas Import quotas are a form of protectionism. An import quota fixes the quantity of a particular good that foreign producers may bring into a country over a specific period, usually a year. The U.S. government imposes quotas to protect domestic industries from foreign competition. and the financial condition of suppliers; and

--Previous business decisions, such as (xiv) Sara Lee's ability to achieve planned cash flows from capital expenditures and acquisitions, particularly Earthgrains, and the impact of changing interest rates and the cost of capital on the discounted value of those planned cash flows; (xv) credit ratings issued by the three major credit rating agencies Credit Rating Agencies

Firms that compile information on and issue public credit ratings for a large number of companies. and the impact these ratings have on Sara Lee's cost to borrow Borrow

To obtain or receive money on loan with the promise or understanding that it will be repaid. funds; (xvi) the settlement of a number of ongoing reviews of Sara Lee's income tax filing positions in various jurisdictions and inherent uncertainties related to the interpretation of tax regulations in the jurisdictions in which Sara Lee transacts business; and (xvii) the continued legality le·gal·i·ty
n. pl. le·gal·i·ties
1. The state or quality of being legal; lawfulness.

2. Adherence to or observance of the law.

3. A requirement enjoined by law. Often used in the plural. of tobacco products in the Netherlands, Germany and Belgium Belgium (bĕl`jəm), Du. België, Fr. La Belgique, officially Kingdom of Belgium, constitutional kingdom (2005 est. pop. 10,364,000), 11,781 sq mi (30,513 sq km), NW Europe. .

In addition, the corporation's results also may be affected by general factors, such as economic conditions, political developments, interest and inflation rates, accounting standards, taxes, and laws and regulations in markets where the corporation competes. We have provided additional information in our Form 10-K Form 10-K

A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information.

Form 10-K

See 10-K. for fiscal 2005, which readers are encouraged to review, concerning factors that could cause actual results to differ materially from those in the forward-looking statements. Sara Lee undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Company Description

Sara Lee Corporation (www.saralee.com) is a Chicago-based global manufacturer and marketer of high-quality, brand-name products for consumers throughout the world. In February 2005, the company began executing a bold and ambitious multi-year plan to transform Sara Lee into a company focused on its food, beverage, and household and body care businesses around the world. As part of its transformation plan, Sara Lee will drive growth in its key categories via such strong brands as Ball Park, Douwe Egberts Douwe Egberts (often abbreviated as DE) is a Dutch corporation that processes and trades coffee, tea, and other groceries. Its full name is Douwe Egberts Koninklijke Tabaksfabriek-Koffiebranderijen-Theehandel Naamloze Vennootschap , Hillshire Farm, Jimmy Dean, Kiwi, Sanex, Senseo and its namesake name·sake
n.
One that is named after another.

[From the phrase for the name's sake.]

namesake
Noun , Sara Lee.

Consolidated Statements of Income          Sara Lee Corporation (NYSE)
                                           ---------------------------

(In millions, except per share amounts)
----------------------------------------------------------------------

                                          Second Quarter Ended
                                    ----------------------------------
                                    December 31,  January 1,   Percent
                                       2005         2005        Change
                                    ------------ ------------ --------

Continuing operations
  Net sales                              $4,448       $4,512    (1.4)%
                                    ------------ ------------

  Cost of sales                           2,813        2,852
  Selling, general and
   administrative expenses                1,281        1,270
  Charges for (income from) exit
   activities and business
   dispositions                              58          (10)
  Contingent sale proceeds                    -            -
  Interest expense                           76           71
  Interest income                           (19)         (25)
                                    ------------ ------------
                                          4,209        4,158
                                    ------------ ------------

  Income from continuing operations
   before income taxes                      239          354    (32.8)
  Income taxes                               46           45
                                    ------------ ------------
Income from continuing operations           193          309    (37.8)
                                    ------------ ------------
Income (loss) from discontinued
 operations, net of tax                      30           17
Gain on sale of Discontinued
 Operations, net of tax                     215            -
                                    ------------ ------------

Net income                                 $438         $326     34.4
                                    ============ ============

Income from continuing operations
 per common share
  Basic                                   $0.25        $0.39    (35.9)
                                    ============ ============
  Diluted                                 $0.25        $0.39    (35.9)
                                    ============ ============

Net income per common share
  Basic                                   $0.58        $0.41     41.5
                                    ============ ============
  Diluted                                 $0.57        $0.41     39.0
                                    ============ ============

Average shares outstanding
  Basic                                     761          788
                                    ============ ============
  Diluted                                   765          795
                                    ============ ============


                                              Six Months Ended
                                    ----------------------------------
                                    December 31,  January 1,   Percent
                                       2005         2005        Change
                                    ------------ ------------ --------

Continuing operations
  Net sales                              $8,640       $8,763    (1.4)%
                                    ------------ ------------

  Cost of sales                           5,504        5,541
  Selling, general and
   administrative expenses                2,534        2,488
  Charges for (income from) exit
   activities and business
   dispositions                              57          (16)
  Contingent sale proceeds                 (114)        (117)
  Interest expense                          150          137
  Interest income                           (40)         (51)
                                    ------------ ------------
                                          8,091        7,982
                                    ------------ ------------

  Income from continuing operations
   before income taxes                      549          781    (29.8)
  Income taxes                              111          128
                                    ------------ ------------
Income from continuing operations           438          653    (32.9)
                                    ------------ ------------
Income (loss) from discontinued
 operations, net of tax                    (148)          25
Gain on sale of Discontinued
 Operations, net of tax                     215            -
                                    ------------ ------------

Net income                                 $505         $678    (25.6)
                                    ============ ============

Income from continuing operations
 per common share
  Basic                                   $0.57        $0.83    (31.3)
                                    ============ ============
  Diluted                                 $0.56        $0.82    (31.7)
                                    ============ ============

Net income per common share
  Basic                                   $0.65        $0.86    (24.4)
                                    ============ ============
  Diluted                                 $0.65        $0.85    (23.5)
                                    ============ ============

Average shares outstanding
  Basic                                     771          790
                                    ============ ============
  Diluted                                   775          796
                                    ============ ============

Please see the corporation's quarterly report on Form 10-Q which will
be filed with the Securities and Exchange Commission for further
information and details regarding the corporation's reported results.



Operating Results by Industry Segment      Sara Lee Corporation (NYSE)
                                           ---------------------------

(In millions)                               Second Quarter Ended
----------------------------------------------------------------------

                                              Sales
                                    -------------------------
                                    December 31,  January 1,   Percent
                                       2005         2005        Change
                                    ------------ ------------ --------
North American Retail Meats                $672         $650      3.5%
North American Retail Bakery                463          449      3.1
Foodservice                                 609          580      4.9
International Beverage                      598          592      0.8
European Meats                              285          311     (8.2)
International Bakery                        190          200     (4.8)
Household & Body Care                       451          491     (8.0)
Branded Apparel                           1,182        1,241     (4.8)
                                    ------------ ------------ --------
  Total sales and operating segment
   income                                 4,450        4,514     (1.4)
Intersegment sales                           (2)          (2)   (50.9)
Amortization of identifiable
 intangibles                                 --           --       --
General corporate expenses                   --           --       --

Contingent sale proceeds                     --           --       --
                                    ------------ ------------ --------
Total net sales and operating
 income                                   4,448        4,512     (1.4)
Net interest expense                         --           --       --
                                    ------------ ------------ --------
Net sales and income from
 continuing operations
 before income taxes                     $4,448       $4,512    (1.4)%
                                    ============ ============ ========


                                     Income from Continuing
                                       Operations Before
                                         Income Taxes
                                    -------------------------
                                    December 31,  January 1,   Percent
                                       2005         2005        Change
                                    ------------ ------------ --------
North American Retail Meats                 $50          $49      1.1%
North American Retail Bakery                (17)         (11)   (41.0)
Foodservice                                  56           62     (9.4)
International Beverage                       64          111    (42.4)
European Meats                               21           31    (32.2)
International Bakery                         21           20      3.4
Household & Body Care                        36           82    (57.5)
Branded Apparel                             169          154      9.7
                                    ------------ ------------ --------
  Total sales and operating segment
   income                                   400          498    (19.9)
Intersegment sales                           --           --       --
Amortization of identifiable
 intangibles                                (24)         (24)     1.7
General corporate expenses                  (80)         (74)    (8.6)
Contingent sale proceeds                     --           --       --
                                    ------------ ------------ --------
Total net sales and operating
 income                                     296          400    (26.3)
Net interest expense                        (57)         (46)   (24.5)
                                    ------------ ------------ --------
Net sales and income from
 continuing operations
 before income taxes                       $239         $354   (32.8)%
                                    ============ ============ ========


                                            Six Months Ended
----------------------------------------------------------------------

                                              Sales
                                    -------------------------
                                    December 31,  January 1,   Percent
                                        2005         2005       Change
                                    ------------ ------------ --------
North American Retail Meats              $1,287       $1,246      3.3%
North American Retail Bakery                923          920      0.3
Foodservice                               1,145        1,118      2.4
International Beverage                    1,123        1,096      2.4
European Meats                              569          588     (3.2)
International Bakery                        382          387     (1.3)
Household & Body Care                       897          953     (5.8)
Branded Apparel                           2,319        2,459     (5.7)
                                    ------------ ------------ --------
  Total sales and operating segment
   income                                 8,645        8,767     (1.4)
Intersegment sales                           (5)          (4)   (48.0)
Amortization of identifiable
 intangibles                                 --           --       --
General corporate expenses                   --           --       --
Contingent sale proceeds                     --           --       --
                                    ------------ ------------ --------
Total net sales and operating
 income                                   8,640        8,763     (1.4)
Net interest expense                         --           --       --
                                    ------------ ------------ --------
Net sales and income from
 continuing operations
 before income taxes                     $8,640       $8,763    (1.4)%
                                    ============ ============ ========


                                     Income from Continuing
                                       Operations Before
                                         Income Taxes
                                    -------------------------
                                    December 31,  January 1,   Percent
                                       2005         2005        Change
                                    ------------ ------------ --------
North American Retail Meats                 $67          $73    (8.5)%
North American Retail Bakery                (21)          (2)      NM
Foodservice                                  72          105    (31.9)
International Beverage                      126          210    (40.1)
European Meats                               51           64    (20.4)
International Bakery                         33           41    (19.8)
Household & Body Care                       115          149    (22.9)
Branded Apparel                             291          300     (3.0)
                                    ------------ ------------ --------
  Total sales and operating segment
   income                                   734          940    (22.0)
Intersegment sales                           --           --       --
Amortization of identifiable
 intangibles                                (48)         (54)    11.3
General corporate expenses                 (141)        (136)    (4.0)
Contingent sale proceeds                    114          117     (2.3)
                                    ------------ ------------ --------
Total net sales and operating
 income                                     659          867    (24.1)
Net interest expense                       (110)         (86)   (27.7)
                                    ------------ ------------ --------
Net sales and income from
 continuing operations
 before income taxes                       $549         $781   (29.8)%
                                    ============ ============ ========

Please see the corporation's quarterly report on Form 10-Q which will
be filed with the Securities and Exchange Commission for further
information and details regarding the corporation's reported results.



Consolidated Balance Sheets                Sara Lee Corporation (NYSE)
                                           ---------------------------

(In millions)
----------------------------------------------------------------------
                                             December 31,   July 2,
                                                2005         2005
                                             ------------ ------------
ASSETS
Cash and equivalents                              $1,955         $538
Trade accounts receivable                          1,746        1,798
Inventories                                        2,184        2,284
Other current assets                                 482          336
Assets of discontinued operations held for
 sale                                                580          860
                                             ------------ ------------

  Total current assets                             6,947        5,816

Other noncurrent assets                              129          117
Deferred tax asset                                   391          303
Property, net                                      2,992        3,030
Trademarks and other identifiable
 intangibles, net                                  1,490        1,574
Goodwill                                           3,142        3,154
Assets of discontinued operations held for
 sale                                                 52          429
                                             ------------ ------------

                                                 $15,143      $14,423
                                             ============ ============

LIABILITIES AND EQUITY
Notes payable                                     $1,378         $239
Accounts payable                                   1,244        1,255
Accrued liabilities                                2,817        2,507
Current maturities of long-term debt                 599          381
Liabilities of discontinued operations held
 for sale                                            386          591
                                             ------------ ------------

  Total current liabilities                        6,424        4,973

Long-term debt                                     3,736        4,114
Pension obligation                                   858          858
Other liabilities                                  1,373        1,354
Liabilities of discontinued operations held
 for sale                                            119          124
Minority interest in subsidiaries                     68           62
Common stockholders' equity                        2,565        2,938
                                             ------------ ------------

                                                 $15,143      $14,423
                                             ============ ============

Please see the corporation's quarterly report on Form 10-Q which will
be filed with the Securities and Exchange Commission for further
information and details regarding the corporation's reported results.




Sara Lee Corporation
Operating Results by Business Segment
(in millions)

                                                       Dollar  Percent
                                      Second Quarter   Change  Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
North American Retail Meats

Net Sales                               $672     $650     $22     3.5%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $(3)     $3
Dispositions                               -       22     (22)
                                    --------- -------- -------
Total                                     $-      $19    $(19)
                                    ========= ======== =======

Operating segment income                 $50      $49      $1     1.1%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Exit activities and business
 dispositions                            $(6)      $5    $(11)
Transformation charges                    (8)       -      (8)
Accelerated depreciation                  (1)       -      (1)
Change in vacation policy                  3        -       3
Dispositions                               -        3      (3)
                                    --------- -------- -------
Total                                   $(12)      $8    $(20)
                                    ========= ======== =======


                                                        Dollar Percent
                                    Second Quarter YTD  Change Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
North American Retail Meats

Net Sales                             $1,287   $1,246     $41     3.3%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $(7)     $7
Dispositions                               -       43     (43)
                                    --------- -------- -------
Total                                     $-      $36    $(36)
                                    ========= ======== =======

Operating segment income                 $67      $73     $(6)  (8.5)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Exit activities and business
 dispositions                           $(10)      $5    $(15)
Transformation charges                   (13)       -     (13)
Accelerated depreciation                  (2)       -      (2)
Change in vacation policy                  3        -       3
Dispositions                               -        5      (5)
                                    --------- -------- -------
Total                                   $(22)     $10    $(32)
                                    ========= ======== =======

----------------------------------------------------------------------


                                                       Dollar  Percent
                                      Second Quarter   Change  Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
North American Retail Bakery

Net Sales                               $463     $449     $14     3.1%
---------                           ========= ======== ======= =======

Operating segment income                $(17)    $(11)    $(6) (41.0)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Exit activities and business
 dispositions                            $(1)      $1     $(2)
Transformation charges                    (6)       -      (6)
Accelerated depreciation                  (1)       -      (1)
Change in vacation policy                  3        -       3
Benefit plan curtailment gain              -        4      (4)
                                    --------- -------- -------
Total                                    $(5)      $5    $(10)
                                    ========= ======== =======


                                                        Dollar Percent
                                    Second Quarter YTD  Change Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
North American Retail Bakery

Net Sales                               $923     $920      $3     0.3%
---------                           ========= ======== ======= =======

Operating segment income                $(21)     $(2)   $(19)     NM
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Exit activities and business
 dispositions                            $(2)      $1     $(3)
Transformation charges                   (10)       -     (10)
Accelerated depreciation                  (5)      (4)     (1)
Change in vacation policy                  3        -       3
Benefit plan curtailment gain              -       12     (12)
                                    --------- -------- -------
Total                                   $(14)      $9    $(23)
                                    ========= ======== =======

----------------------------------------------------------------------


                                                       Dollar  Percent
                                      Second Quarter   Change  Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
Total Sara Lee Food & Beverage
 Business

Net Sales                             $1,135   $1,099     $36     3.3%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $(3)     $3
Dispositions                               -       22     (22)
                                    --------- -------- -------
Total                                     $-      $19    $(19)
                                    ========= ======== =======

Operating segment income                 $33      $38     $(5) (11.0)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Exit activities and business
 dispositions                            $(7)      $6    $(13)
Transformation charges                   (14)       -     (14)
Accelerated depreciation                  (2)       -      (2)
Change in vacation policy                  6        -       6
Dispositions                               -        3      (3)
Benefit plan curtailment gain              -        4      (4)
                                    --------- -------- -------
Total                                   $(17)     $13    $(30)
                                    ========= ======== =======


                                                        Dollar Percent
                                    Second Quarter YTD  Change Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
Total Sara Lee Food & Beverage
 Business

Net Sales                             $2,210   $2,166     $44     2.0%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $(7)     $7
Dispositions                               -       43     (43)
                                    --------- -------- -------
Total                                     $-      $36    $(36)
                                    ========= ======== =======

Operating segment income                 $46      $71    $(25) (34.6)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Exit activities and business
 dispositions                           $(12)      $6    $(18)
Transformation charges                   (23)       -     (23)
Accelerated depreciation                  (7)      (4)     (3)
Change in vacation policy                  6        -       6
Dispositions                               -        5      (5)
Benefit plan curtailment gain              -       12     (12)
                                    --------- -------- -------
Total                                   $(36)     $19    $(55)
                                    ========= ======== =======



Sara Lee Corporation
Operating Results by Business Segment
(in millions)

                                                        Dollar Percent
                                      Second Quarter    Change Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
Sara Lee Foodservice

Net Sales                               $609     $580     $29     4.9%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-       $-      $-
Dispositions                               -        1      (1)
                                    --------- -------- -------
Total                                     $-       $1     $(1)
                                    ========= ======== =======

Operating segment income                 $56      $62     $(6)  (9.4)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Changes in foreign currency
 exchange rates                           $-       $-      $-
Transformation charges                    (2)       -      (2)
Accelerated depreciation                  (1)      (3)      2
Benefit plan curtailment gain              -        5      (5)
Dispositions                               -        1      (1)
Change in vacation policy                  4        -       4
Hurricane losses                          (2)       -      (2)
                                    --------- -------- -------
Total                                    $(1)      $3     $(4)
                                    ========= ======== =======


                                                        Dollar Percent
                                    Second Quarter YTD  Change Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
Sara Lee Foodservice

Net Sales                             $1,145   $1,118     $27     2.4%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $(1)     $1
Dispositions                               -        2      (2)
                                    --------- -------- -------
Total                                     $-       $1     $(1)
                                    ========= ======== =======

Operating segment income                 $72     $105    $(33) (31.9)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Changes in foreign currency
 exchange rates                           $-       $-      $-
Transformation charges                    (4)       -      (4)
Accelerated depreciation                  (2)      (7)      5
Benefit plan curtailment gain              -       14     (14)
Dispositions                               -        1      (1)
Change in vacation policy                  4        -       4
Hurricane losses                          (5)       -      (5)
                                    --------- -------- -------
Total                                    $(7)      $8    $(15)
                                    ========= ======== =======



Sara Lee Corporation
Operating Results by Business Segment
(in millions)

                                                       Dollar  Percent
                                      Second Quarter   Change  Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
International Beverage

Net Sales                               $598     $592      $6     0.8%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $30    $(30)
                                    ========= ======== =======
Operating segment income                 $64     $111    $(47) (42.4)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Changes in foreign currency
 exchange rates                           $-       $8     $(8)
Exit activities and business
 dispositions                            (29)       -     (29)
Accelerated depreciation                  (3)       -      (3)
Transformation charges                    (2)       -      (2)
                                    --------- -------- -------
Total                                   $(34)      $8    $(42)
                                    ========= ======== =======


                                                       Dollar  Percent
                                    Second Quarter YTD Change  Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
International Beverage

Net Sales                             $1,123   $1,096     $27     2.4%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $15    $(15)
                                    ========= ======== =======
Operating segment income                $126     $210    $(84) (40.1)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Changes in foreign currency
 exchange rates                           $-       $7     $(7)
Exit activities and business
 dispositions                            (45)       -     (45)
Accelerated depreciation                  (3)       -      (3)
Transformation charges                    (4)       -      (4)
                                    --------- -------- -------
Total                                   $(52)      $7    $(59)
                                    ========= ======== =======

----------------------------------------------------------------------

                                                       Dollar  Percent
                                      Second Quarter   Change  Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
European Meats

Net Sales                               $285     $311    $(26)  (8.2)%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $25    $(25)
                                    ========= ======== =======

Operating segment income                 $21      $31    $(10) (32.2)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Changes in foreign currency
 exchange rates                           $-       $3     $(3)
Exit activities and business
 dispositions                             (3)       -      (3)
Transformation charges                     -        -       -
                                    --------- -------- -------
Total                                    $(3)      $3     $(6)
                                    ========= ======== =======


                                                       Dollar  Percent
                                    Second Quarter YTD Change  Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
European Meats

Net Sales                               $569     $588    $(19)  (3.2)%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $26    $(26)
                                    ========= ======== =======

Operating segment income                 $51      $64    $(13) (20.4)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Changes in foreign currency
 exchange rates                           $-       $3     $(3)
Exit activities and business
 dispositions                             (3)       -      (3)
Transformation charges                    (1)       -      (1)
                                    --------- -------- -------
Total                                    $(4)      $3     $(7)
                                    ========= ======== =======

----------------------------------------------------------------------

                                                       Dollar  Percent
                                      Second Quarter   Change  Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
International Bakery

Net Sales                               $190     $200    $(10)  (4.8)%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $14    $(14)
                                    ========= ======== =======

Operating segment income                 $21      $20      $1     3.4%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Changes in foreign currency
 exchange rates                           $-       $1     $(1)
Exit activities and business
 dispositions                              -        -       -
Transformation charges                    (1)       -      (1)
                                    --------- -------- -------
Total                                    $(1)      $1     $(2)
                                    ========= ======== =======


                                                       Dollar  Percent
                                    Second Quarter YTD Change  Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
International Bakery

Net Sales                               $382     $387     $(5)  (1.3)%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $13    $(13)
                                    ========= ======== =======

Operating segment income                 $33      $41     $(8) (19.8)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Changes in foreign currency
 exchange rates                           $-       $1     $(1)
Exit activities and business
 dispositions                             (5)       -      (5)
Transformation charges                    (1)       -      (1)
                                    --------- -------- -------
Total                                    $(6)      $1     $(7)
                                    ========= ======== =======

----------------------------------------------------------------------



Sara Lee Corporation
Operating Results by Business Segment
(in millions)

                                                       Dollar  Percent
                                      Second Quarter   Change  Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
Household & Body Care

Net Sales                               $451     $491    $(40)  (8.0)%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $28    $(28)
Dispositions                               -        3      (3)
                                    --------- -------- -------
Total                                     $-      $31    $(31)
                                    ========= ======== =======

Operating segment income                 $36      $82    $(46) (57.5)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Changes in foreign currency
 exchange rates                           $-       $4     $(4)
Exit activities and business
 dispositions                             (6)      14     (20)
Accelerated depreciation                  (5)      (3)     (2)
Transformation charges                    (2)       -      (2)
Dispositions                               -        -       -
                                    --------- -------- -------
Total                                   $(13)     $15    $(28)
                                    ========= ======== =======


                                                       Dollar  Percent
                                    Second Quarter YTD Change  Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
Household & Body Care

Net Sales                               $897     $953    $(56)  (5.8)%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $27    $(27)
Dispositions                               -        6      (6)
                                    --------- -------- -------
Total                                     $-      $33    $(33)
                                    ========= ======== =======

Operating segment income                $115     $149    $(34) (22.9)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Changes in foreign currency
 exchange rates                           $-       $4     $(4)
Exit activities and business
 dispositions                             20       14       6
Accelerated depreciation                  (9)      (6)     (3)
Transformation charges                    (4)       -      (4)
Dispositions                               -        2      (2)
                                    --------- -------- -------
Total                                     $7      $14     $(7)
                                    ========= ======== =======

----------------------------------------------------------------------

                                                       Dollar  Percent
                                      Second Quarter   Change  Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
Total Sara Lee International
 Business

Net Sales                             $1,524   $1,594    $(70)  (4.3)%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $97    $(97)
Dispositions                               -        3      (3)
                                    --------- -------- -------
Total                                     $-     $100   $(100)
                                    ========= ======== =======

Operating segment income                $142     $244   $(102) (42.5)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Changes in foreign currency
 exchange rates                           $-      $16    $(16)
Exit activities and business
 dispositions                            (38)      14     (52)
Accelerated depreciation                  (8)      (3)     (5)
Transformation charges                    (5)       -      (5)
Dispositions                               -        -       -
                                    --------- -------- -------
Total                                   $(51)     $27    $(78)
                                    ========= ======== =======

                                                       Dollar  Percent
                                    Second Quarter YTD Change  Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
Total Sara Lee International
 Business

Net Sales                             $2,971   $3,024    $(53)  (1.8)%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $81    $(81)
Dispositions                               -        6      (6)
                                    --------- -------- -------
Total                                     $-      $87    $(87)
                                    ========= ======== =======

Operating segment income                $325     $464   $(139) (30.1)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Changes in foreign currency
 exchange rates                           $-      $15    $(15)
Exit activities and business
 dispositions                            (33)      14     (47)
Accelerated depreciation                 (12)      (6)     (6)
Transformation charges                   (10)       -     (10)
Dispositions                               -        2      (2)
                                    --------- -------- -------
Total                                   $(55)     $25    $(80)
                                    ========= ======== =======

----------------------------------------------------------------------

                                                       Dollar  Percent
                                      Second Quarter   Change  Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
Branded Apparel

Net Sales                             $1,182   $1,241    $(59)  (4.8)%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $(1)     $1
Acquisitions                              14       24     (10)
                                    --------- -------- -------
Total                                    $14      $23     $(9)
                                    ========= ======== =======

Operating segment income                $169     $154     $15     9.7%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Changes in foreign currency
 exchange rates                           $-       $1     $(1)
Exit activities and business
 dispositions                              -        2      (2)
Restructuring charges                     (1)       -      (1)
Acquisitions                               1        -       1
                                    --------- -------- -------
Total                                     $-       $3     $(3)
                                    ========= ======== =======


                                                       Dollar  Percent
                                    Second Quarter YTD Change  Change
                                    ------------------ ---------------
                                        2006     2005
                                    --------- --------
Branded Apparel

Net Sales                             $2,319   $2,459   $(140)  (5.7)%
---------                           ========= ======== ======= =======
Increase/(decrease) in net sales
 from:
Changes in foreign currency
 exchange rates                           $-      $(6)     $6
Acquisitions                              20       24      (4)
                                    --------- -------- -------
Total                                    $20      $18      $2
                                    ========= ======== =======

Operating segment income                $291     $300     $(9)  (3.0)%
------------------------            ========= ======== ======= =======
Increase/(decrease) in operating
segment income from:
Changes in foreign currency
 exchange rates                           $-       $-      $-
Exit activities and business
 dispositions                              -        8      (8)
Restructuring charges                     (1)       -      (1)
Acquisitions                               1        -       1
                                    --------- -------- -------
Total                                     $-       $8     $(8)
                                    ========= ======== =======



            Second Quarter Fiscal 2006 Unit Volume Overview
            -----------------------------------------------


Unit volume changes versus Fiscal 2005

                                       Second Quarter    Six Months
                                         Fiscal 2006     Fiscal 2006
                                       --------------- ---------------


Sara Lee Corporation                         1%             (1)%


Sara Lee Food & Beverage                     4%              1%

         North American Retail Meats         8%              6%
         North American Retail
          Bakery (incl. Senseo)              1%             (2)%


Sara Lee Foodservice                         5%              3%


Sara Lee International                       0%             (4)%

         International Beverage
          (roast and ground coffee)          1%             (7)%
         European Meats                     (1)%             1%
         International Bakery                0%              0%
         Global Household & Body
          Care (four core
          categories)                       (2)%            (3)%


Branded Apparel(a)                          (3)%            (3)%



(a) Excludes unit volume impacts from the European branded apparel
    businesses, which have been reported as discontinued operations.



                  Brand Segmentation Strategy Update
                 Fiscal 2006 - Six Months Year-to-Date

Sales by Segment
($ in millions)

                                                   Positive/(Negative)
                                       % Change     Effect of Currency
                       Six Months         vs.        Rate Changes(a)
                         FY 2006      FY 2005(a)   (percentage points)
                     -------------------------------------------------

Strategic Investment      $1,814            9%           (1) pts.
Support and Grow           2,164           (5)            -
Sustain                    1,700           (3)           (2)
Manage for Cash            1,512           (8)           (1)
                     -------------------------------------------------
Total Retail               7,190           (2)           (1)
Foodservice/Other          1,450            2            (1)
                     -------------------------------------------------
Total                     $8,640           (1)%           - pts.
                     =================================================


Strategic Investment Brand Sales
($ in millions)
                                                   Positive/(Negative)
                                       % Change    Effect of Currency
                       Six Months         vs.        Rate Changes(a)
                         FY 2006      FY 2005(a)   (percentage points)
                     -------------------------------------------------
Sara Lee                    $452           19%            - pt.
Ball Park                    119            4             -
Hillshire Farm               342           13             -
Jimmy Dean                   232           15             -
Senseo                       163            7            (5)
Ambi Pur                     170          (16)           (2)
Champion                     258            9            (1)
Just My Size                  78            1             -
                     -------------------------------------------------
Total                     $1,814            9%           (1) pts.
                     =================================================


Retail Sales and MAP Spending - Percent to Total Retail

                                Six Months Sales     Six Months MAP
                               FY 2006   FY 2005   FY 2006   FY 2005
                              ----------------------------------------
Strategic Investment              25%       23%       37%       38%
Support and Grow                  30        31        37        36
Sustain                           24        24        17        18
Manage for Cash                   21        22         9         8
                              ----------------------------------------
Total Retail                     100%      100%      100%      100%
                              ========================================


(a) In order to calculate the % change in sales on a constant currency
    basis, the reported % change vs. Fiscal Year 2005 should be
    increased by the negative currency rate changes and decreased by
    the positive currency rate changes.

COPYRIGHT 2006 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.

Reader Opinion

Article Details
Printer friendly Cite/link Email Feedback
Publication:	Business Wire
Geographic Code:	1USA
Date:	Feb 2, 2006
Words:	8405
Previous Article:	Southwestern Resources Corp.: 36 Metres of 9.7 Grams Per Tonne Gold Intersected in Hole B05-148, Boka Gold Project, Yunnan Province, China.
Next Article:	Coffee Pacifica Provides Revenue Guidance for the First Quarter 2006.
Topics:	Direct marketing Food services Meat industry

Related Articles
WELLPOINT PROFITS UP 21 PERCENT HMO THRIVES VIA EXPANSION.(Business)(Statistical Data Included)
BUSINESS NOTES AIRLINE UNION CALLS FOR VOTE TO STRIKE.(Business)
SARA LEE TO SHED APPAREL INTERESTS.(BUSINESS)
Sara Lee Corporation Provides Update on Sale of Its European Meats Business; Negotiating Sale of European Meats Business with Smithfield Foods, Inc.;...
Schaeffer's Daily Market Blog Features Toll Brothers, the Dow Jones Industrial Average, Berkshire Hathaway, Sara Lee, and Smithfield Foods.
Sara Lee Reports Earnings for Third Quarter of Fiscal 2006.
Sara Lee Corporation Agrees to Sell Its European Meats Business to Smithfield Foods, Inc.; Sara Lee continues to sharpen focus on growing large,...
Sara Lee Announces Fiscal 2006 Results and New Quarterly Dividend.
Sara Lee Achieves Broad Based Growth in First Quarter of Fiscal 2007.
Sara Lee Corporation Reports Higher Net Sales and Unit Volumes in Second Quarter of Fiscal 2007.