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SARA LEE CORPORATION REPORTS RECORD FIRST QUARTER SALES; NET INCOME UP 9.2 PERCENT BEFORE ACCOUNTING CHANGE

    CHICAGO, Oct. 27 /PRNewswire/ -- Sara Lee Corporation (NYSE: SLE) today announced results for the first quarter ended Oct. 2.
    Net sales for the quarter were $3.8 billion, up 5.9 percent from last year.  Net income before an accounting change rose 9.2 percent to $155 million from $142 million reported in the same period last year. Primary earnings per share, also before the accounting change, rose 10.7 percent to $.31 per share.  These results exclude the impact of adopting Statement of Financial Accounting Standards No. 109-Accounting for Income Taxes (SFAS 109).  The adoption of SFAS 109 in the quarter ended Oct. 2, 1993 resulted in a one-time, after-tax charge of $35 million, or $.07 per share.
    "Each of Sara Lee's lines of business enjoyed profit gains in the first quarter, and unit volume increased for all of our core product categories," said John H. Bryan, chairman and chief executive officer. "Results were particularly strong in our Packaged Meats and Bakery and Household and Personal Care operations, reflecting good base business results combined with contributions from acquisitions completed within the last 12 months."
    A performance review for each business segment follows (dollars in millions):
    SARA LEE PACKAGED FOODS
                                    First Quarter             Change
                                   1994       1993
    Sales
     Packaged Meats and Bakery    $1,340    $1,191         12.5 percent
     Coffee and Grocery              490       516         (5.1) percent
     Total                         1,830     1,707          7.2 percent
    Operating income
     Packaged Meats and Bakery        62        51         20.9 percent
     Coffee and Grocery               75        73          2.8 percent
     Total                           137       124         10.3 percent
    Packaged Meats and Bakery sales and operating profits rose during the quarter, up 13 percent and 21 percent, respectively.  The strong results are due to solid base business unit volume gains and contributions from Bessin, Sara Lee Processed Meats-Europe and International Baking Company, all businesses acquired during the past fiscal year.  Unit volume for Packaged Meats rose 3 percent in the quarter, excluding acquisitions, with particularly strong growth In breakfast and smoked sausage.  Sara Lee Bakery reported a 5 percent increase in worldwide unit volume, excluding acquisitions, led by a double-digit increase in U.S. retail bakery products.
    Sara Lee Coffee and Grocery reported a 3 percent increase in operating profit and a 5 percent decline in sales.  The lower sales primarily reflect the effects of a stronger dollar.  Margins expanded due to strong unit volume and improved operating efficiencies.  Unit volume for Sara Lee's retail and out-of-home coffee operations rose 11 percent during the quarter.  The above-average unit volume gain reflects consumer hoarding In anticipation of higher retail prices brought on by increased green coffee costs.
    SARA LEE PACKAGED CONSUMER PRODUCTS
                                     First Quarter           Change
                                   1994        1993
    Sales
     Personal Products            $1,615      $1,541        4.8 percent
     Household & Personal Care       352         336        4.8 percent
     Total                         1,967       1,877        4.8 percent
    Operating income
     Personal Products               140         137        2.4 percent
     Household & Personal Care        29          21       37.7 percent
     Total                           169         158        7.1 percent
    Personal Products sales rose 5 percent and operating income increased 2 percent in the first quarter.  The modest increases reflect continued weakness in European apparel markets, lower U.S. hosiery profits and negative currency translations.  Acquisitions added slightly to operating results in the quarter.  Unit volume for knit products rose 7 percent in the quarter, excluding acquisitions, with both the North American and International segments reporting gains.  Unit volumes were particularly strong in women's and girls' underwear in the United States and for Hanes products in international markets.
    Worldwide sheer hosiery unit volumes increased 2 percent, representing gains In European markets offset, in part, by a slight decline in unit sales in the United States.  Adams-Millis sock operations in the United States enjoyed a 13 percent Increase in unit volume.  Sock volumes rose in international markets, as well, and total worldwide hosiery unit volumes, including both sheer hosiery and socks, increased 4 percent.  Foundations unit sales increased 12 percent, representing gains in both U.S. and European markets.
    Sara Lee Household and Personal Care reported a 5 percent increase in sales and a 38 percent increase in operating income in the first quarter.  Results benefited from the recent acquisitions of SmithKline Beecham's personal care operations and the Endust and Behold brands purchased from SC Johnson Wax, as well as from stronger sales of higher margin core items in the base Household and Personal Care businesses.  A stronger dollar relative to foreign currencies had a negative effect on reported results for this line of business.
    Net interest expense rose in the quarter to $32 million from $22 million one year ago, reflecting financing costs for recent acquisitions.  The tax rate in the current quarter was 36 percent versus 35.3 percent for the first quarter of fiscal 1993, due to higher corporate tax rates in the United States.
    Sara Lee Corporation, a global food and consumer products company, markets a wide variety of products under leading brand names, including Hanes, Hanes Her Way, L'eggs, Dim, Bali, Playtex, Champion, Kiwi, Hillshire Farm, Ball Park, Jimmy Dean, Douwe Egberts and Sara Lee.
                          SARA LEE CORPORATION
                   Consolidated Statements of Income
                 (In millions except per share amounts)
                              First Quarter Ended
                           Oct. 2,          Sept. 26,
                            1993             1992      Percent Change
    Net Sales              $3,796             $3,583         5.9
    Cost of sales           2,384              2,228
    Selling, general
     and administrative
     expenses               1,138              1,114
    Interest expense           42                 43
    Interest income           (10)               (21)
    Total                   3,554              3,364
    Income before taxes       242                219          10.4
    Income taxes               87                 77
    Net income before
     accounting change        155                142           9.2
    Cumulative effect of
     accounting change (A)    (35)               --
    Net income                120                142         (15.5)
    Preferred dividends-
     net of tax                 6                  7
    Net available for common
     stockholders             114                135
    Net Income per common
     share-primary before
     cumulative effect of
     accounting change       0.31               0.28          10.7
    Cumulative effect of
     accounting change (A)  (0.07)                --
    Total                    0.24               0.28         (14.3)
    Average shares
     outstanding              481                483
    Net Income per common
     share-fully diluted
     before cumulative effect
     of accounting change   0.30                0.27        11.1
    Cumulative effect of
     accounting change (A) (0.07)                 --
    Total                   0.23                0.27       (14.8)
    Average shares
     outstanding             500                 502
    (A) The corporation adopted Statement of Financial Accounting Standards No. 109-Accounting for Income Taxes effective July 4, 1993.
                 Operating Results by Industry Segment
                             (In millions)
     First quarter       Sales       Percent   Operg. Income   Percent
      ended         10/2/93 9/26/92  Change   10/2/93 9/26/92  Change
    Packaged foods:
    Packaged meats
     and bakery     $ 1,340 $ 1,191   12.5    $   62  $   51    20.9
    Coffee and
     grocery            490     516   (5.1)       75      73     2.8
    Total packaged
     foods            1,830   1,707    7.2       137     124    10.3
    Packaged consumer
     products:
    Personal
     products         1,615   1,541    4.8       140     137     2.4
    Household and
     personal care      352     336    4.8        29      21    37.7
    Total packaged
     consumer
     products         1,967   1,877    4.8       169     158     7.1
    Total sales and
     operg. income    3,797   3,584    5.9       306     282     8.5
    Intersegment
     sales               (1)     (1)   ---       ---     ---     ---
    Interest, net       ---     ---    ---       (32)    (22)  (40.5)
    Unallocated
     corporate
     expense            ---     ---    ---       (32)    (41)   19.4
    Net sales and
     pretax income  $ 3,796  $ 3,583   5.9     $ 242   $ 219  $ 10.4
                      Consolidated Balance Sheets
                             (In millions)
                                  10/2/93       7/3/93       9/26/92
    Assets:
    Cash and equivalents         $    115     $    325     $    282
    Trade accounts receivable       1,465        1,171        1,359
    Inventories                     2,393        2,280        2,165
    Other current assets              204          200          153
     Total current assets           4,177        3,976        3,959
    Investments in associated
     companies                        211          205          167
    Trademarks and other assets       518          518          554
    Property, net                   2,988        2,878        2,579
    Intangible assets               3,605        3,285        2,956
    Total                        $ 11,499     $ 10,862     $ 10,215
    Liabilities and equity:
    Notes payable                $  1,583     $    843     $    416
    Accounts payable                  913        1,151          858
    Accrued liabilities             1,978        1,849        1,928
    Current maturities of
      long-term debt                  224          426          487
     Total current liabilities      4,698        4,269        3,689
    Long-term debt                  1,321        1,164        1,184
    Deferred income taxes             537          512          480
    Other liabilities                 700          705          761
    Minority interest in
     subsidiaries                     523          304          312
    Preferred stock                   324          357          349
    Common stockholders' equity     3,396        3,551        3,440
    Total                        $ 11,499     $ 10,862     $ 10,215
    -0-             10/27/93
    CONTACT:  Anne M. McCarthy, 312-558-8727 (media) or Janet E. Bergman, 312-558-8651 (investors), both of Sara Lee
    (SLE) CO:  SARA LEE CORPORATION IN:  FOD SU:  ERN ST:  IL


-- NY021 -- X422 10/27/93
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