1st Quarter Results

     
BW20021024000294  20021024T122655Z UTC


( BW)(SARA-LEE)(SRL) 1st Quarter Results

    Business Editors
    UK REGULATORY NEWS

    CHICAGO--(BUSINESS WIRE)--Oct. 24, 2002--

Sara Lee's Fiscal 2003 First Quarter Earnings Per Share Increase 42%

--  Company reports diluted earnings per share of $.37 for the first
    quarter of fiscal 2003, excluding unusual items, up 42% over year
    ago quarter

--  Operating income increases 25%

--  Earnings per share exceed August 2002 guidance by 28%

Sara Lee Corporation today reported diluted earnings per share (EPS),
excluding unusual items, of $.37, an increase of 42% compared to $.26
one year ago.

Sales were $4.5 billion compared to $4.2 billion a year ago, an
increase of 7%, driven largely by the acquisition of The Earthgrains
Company. Unit volumes, excluding acquisitions and divestitures, were
flat during the quarter, with gains in the company's Meats, Intimates
and Underwear, and Household and Body Care operations offset by
declines in the Beverage and Bakery businesses.

Operating income rose 25% due to benefits from the company's Reshaping
program, including increased sales of higher margin products and
reduced operating costs. The additional five weeks of Earthgrains'
earnings in fiscal 2003, lower commodity costs and favorable foreign
currency exchange rates also contributed to the increased results. The
company's strongest base business operating income gains occurred in
the Meats and Intimates and Underwear businesses.

Including unusual items related to the Reshaping program, the company
reported earnings of $.38 per diluted share for the first quarter of
fiscal 2003, ending September 28, 2002, compared to $.30 one year ago.

In its fiscal 2002 year-end news release issued in August 2002, Sara
Lee's outlook for the first quarter of fiscal 2003 was an EPS range of
$.27 to $.29 per diluted share, excluding unusual items. Today's EPS
of $.37 is 28% above the top end of that range reflecting the positive
operating performance discussed in this release, including benefits
from the company's Reshaping program, as well as favorable foreign
currency exchange rates, lower interest expense and fewer shares
outstanding.

"Our strategy is working. We are beginning to realize benefits from
the Reshaping program that Sara Lee began two years ago," said C.
Steven McMillan, chairman, president and chief executive officer of
Sara Lee Corporation. "I strongly believe that Sara Lee Corporation
today has the right mix of food, apparel and household products to
satisfy the growing appetite of consumers around the world for
high-quality, convenient products that meet their everyday needs.

"My current priority is to make certain that Sara Lee invests in new
product development, marketing support for our brands and enhanced
organizational structures to deliver sustainable top-line growth.
Innovation - in both our products and processes - is a key component
of these activities. During this past quarter, we began to see results
from several innovation initiatives such as our Senseo coffee system;
the Jimmy Dean Fresh Taste. Fast! line of pre-cooked sausages and
bacon; Playtex and Bali gel-strap bras; and the expanded distribution
of Sara Lee bagels.

"Further, we expect some of our most recent initiatives - including
the new Tagless T-shirt from Hanes and our just-introduced line of
Sara Lee premium breads - to contribute to increased sales growth in
future quarters."

Unusual Items

The company's results for the first quarters of fiscal 2003 and 2002
were affected by actions related to the Reshaping program initiated in
May 2000. Reshaping actions completed during the first quarter of
fiscal 2003 were executed for amounts that were more favorable than
previously estimated, resulting in an increase in pretax income, net
income and diluted EPS of $9 million, $7 million and $.01,
respectively. During the first quarter of fiscal 2002, the company's
management approved plans to close certain high cost manufacturing and
distribution activities and completed the disposition of certain
non-core businesses. Also, during the first quarter of 2002, the
company concluded that it could not complete a previously announced
business disposition in a timely manner, resulting in the reversal of
the charge previously recognized for this planned action. The net
impact of these fiscal 2002 activities was a $1 million reduction in
pretax income, a $29 million increase in net income and an increase in
diluted EPS of $.04 per share.

Performance Review

A performance review for each line of business follows. Unit volumes
exclude acquisitions and divestitures unless otherwise noted. All
results exclude unusual items unless otherwise noted. All dollar
amounts are in millions.

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SARA LEE MEATS
                                   First Quarter             Change
                           ----------------------------   ------------

                               2003            2002
                               ----            ----

Sales                          $923            $938             (2)%
Operating Income                 89              74             21%
*T

Sara Lee Meats is among the world's leading manufacturers of branded
packaged meat products with leading positions in the United States,
Europe and Mexico.

While sales for the quarter fell 2%, operating income increased 21%
reflecting better margins driven by favorable raw material prices and
benefits from the company's Reshaping program. The company also
enjoyed an improved product mix including increased sales of Jimmy
Dean Fresh Taste. Fast! breakfast sausage, Sara Lee deli meats,
Hillshire Farm smoked sausage and Ball Park hot dogs.

The softness in sales revenue is principally a result of lower pricing
and increased promotions driven by lower raw material costs. Global
unit volumes grew 1%, led by a 3% gain in U.S. retail volumes and a
strong 9% increase in U.S. deli volumes reflecting consumer response
to Sara Lee's "Red Wave" marketing program, which created a unique
in-store presence for Sara Lee branded meats and cheeses. Foodservice
volumes in the United States declined 7% primarily due to lower
national account sales. Unit volumes increased 1% in Europe and 2% in
Mexico.

Marketing spending increased 7% over last year's first quarter. Media
advertising support grew 17%, with strong double-digit gains behind
several key brands, including Hillshire Farm, Sara Lee and Ball Park.

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SARA LEE BAKERY
                                   First Quarter             Change
                           ----------------------------   ------------

                               2003            2002
                               ----            ----

Sales                          $822            $545             51%
Operating Income                 44              35             25%
*T

Sara Lee Bakery is a leader in the U.S. fresh bread market, with
important positions in the U.S. and European refrigerated dough and
European fresh bread markets. The Bakery operations also enjoy leading
positions in frozen baked goods in both the United States and
Australia.

The significant growth in sales and operating income reflects an
additional five weeks of Earthgrains' results based on the
acquisition's completion in August 2001. This acquisition more than
tripled the size of Sara Lee Bakery's operations and substantially
increased its profitability. Sara Lee Bakery's first quarter sales
grew to $822 million compared to $545 million for the same period last
year. Operating income grew to $44 million, up 25% from $35 million a
year ago. Excluding the impact of the Earthgrains acquisition and
foreign exchange, sales were down 3% and operating income was down 26%
due to volume declines in the U.S. fresh bread category and increased
employee costs.

By category, U.S. fresh bakery unit volumes fell 2% as strength in the
high-margin premium and superpremium Sara Lee, IronKids and Earth
Grains brands was offset by declines in the private label segment.
Unit volumes for the U.S. frozen operations declined 5% as increased
foodservice sales were offset by lower retail sales, including the
impact of discontinued low-margin products. European fresh bakery unit
sales increased 3% during the quarter, while refrigerated dough unit
sales fell 1% in the United States but increased 14% in Europe.

Sara Lee Bakery is focusing on driving revenue growth through new
product introductions and extending the Sara Lee brand into new
product areas by leveraging its extensive direct-store-delivery (DSD)
system. In addition, IronKids crustless bread, which was first
launched in the United States at the end of the prior fiscal year, has
achieved full distribution into all of Bakery's DSD markets. Sales of
crustless bread for the European fresh bakery operations continued to
exceed expectations, driven by the introduction of this innovative
product into Portugal.

Media advertising and promotion spending increased 34% over last
year's first quarter, primarily due to the additional five weeks of
Earthgrains' results in fiscal 2003. Excluding the impact of
acquisitions, media advertising and promotion spending decreased 11%
but is expected to increase more than 10% in the second quarter to
support the launch of several new products, including Sara Lee bread.

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*T
BEVERAGE
                                   First Quarter             Change
                           ----------------------------   ------------

                               2003            2002
                               ----            ----

Sales                          $619            $614              1%
Operating Income                 86              94             (9)%
*T

Sara Lee Beverage is one of the largest producers of roast and ground
coffee in the world and is number one in the global out-of-home coffee
market. Its primary markets are Europe, the United States and Brazil.

Competitive retail pricing, driven by lower commodity costs, combined
with higher marketing expenditures and lower unit volumes,
particularly in the United States, resulted in a 9% decline in
operating income despite a 1% increase in sales. Excluding the impact
of currency and acquisitions, Beverage sales declined 5% and operating
income declined 18% in the first quarter.

Business trends were mixed in the quarter, with sales and profit
increases in Europe offset by weakness in the United States. In
Europe, sales and profits increased for both the retail and
out-of-home channels driven in large part by a strengthening of the
euro and an improved product mix. Market shares increased in several
key countries, including Belgium, Denmark and the United Kingdom. U.S.
sales and profits fell by more than 10%, reflecting less promotional
activity in our retail business and a continued soft demand for
foodservice products.

Global unit sales of roasted coffee and coffee concentrate products
fell 4% during the quarter including a 5% decline in retail volumes
and a 1% decline in out-of-home unit sales. On a geographic basis,
unit volumes fell 2% in Europe, declined 9% in the United States and
fell 1% in Brazil.

Media advertising and promotion spending was up 14% with considerable
funds devoted to supporting the rollout of the Senseo retail coffee
product. The Senseo coffee system continues to increase market share
in the Netherlands, Belgium and France, and at the end of September,
this innovative product was introduced in Germany.

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*T
HOUSEHOLD PRODUCTS
                                   First Quarter             Change
                           ----------------------------   ------------

                               2003            2002
                               ----            ----

Sales                          $478            $464              3%
Operating Income                 72              68              5%
*T

Household Products is Sara Lee's most global business, with leading
positions in four core product categories: body care, air care, shoe
care and insecticides, plus a direct selling business in developing
markets. It markets products in nearly 200 countries.

For the first quarter of fiscal 2003, sales grew 3% and operating
income rose 5%. Increased sales and profits for the company's
traditional household and body care businesses were partially offset
by the negative impact of sales declines in Mexico, start-up costs in
Brazil and economic issues in Argentina for the Direct Selling
operations. The strength of the euro helped reported results;
excluding the impact of currency movements, Household Products sales
rose 1% and operating income fell 1% compared to the year ago period.

Unit volumes for this segment's four core categories grew 1%, against
an unusually strong 11% increase in last year's first quarter. This
year's gain was led by increased sales in the air care and body care
segments. Sanex deodorants were launched in the United Kingdom during
the quarter, expanding the market reach of this well-known
pan-European brand, and in September Ambi Pur Instant Perfume, a room
spray, was launched in the Netherlands, Spain and France.

Media advertising and promotion spending for this line of business
increased 4% over last year's first quarter, and spending is expected
to grow at higher rates beginning in the second quarter to support
continued new product activity.

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*T
INTIMATES AND UNDERWEAR
                                   First Quarter             Change
                           ----------------------------   ------------

                               2003            2002
                               ----            ----

Sales                        $1,693          $1,689              0%
Operating Income                206             127             62%
*T

Sara Lee's Intimates and Underwear business includes intimate apparel,
knit products and legwear marketed under many of the most powerful
brand names in the apparel industry. Sara Lee holds leading share
positions in intimate apparel, underwear and legwear in both North
America and Europe.

Operating income for Intimates and Underwear increased 62% over the
previous year's first quarter. Profits for this business benefited
from lower cotton raw material costs and significant cost savings and
production efficiencies derived from Reshaping activities over the
past two years. Operating income increased for all three global
businesses while sales rose for knit products and intimate apparel.
Total unit volumes rose 1%.

Intimates worldwide unit volumes increased 8%, benefiting from product
innovation and increased marketing spending for key brands. Unit sales
rose at a double-digit rate in the United States, reflecting strong
marketing activity behind new products. In the United States, the
company's bra dollar market share increased more than 4 points to
31.4%. European intimate apparel unit sales increased 3%.

Global knit volumes were flat against a 13% increase in last year's
first quarter. In the United States, volumes increased at a mid-single
digit rate for men's and boys' underwear and grew 25% for Champion
brand products; these gains were offset by slightly lower unit sales
for women's and girls' underwear and other active wear products. The
company maintained its number-one unit share in the men's and boys'
underwear market and the fleece market, and it increased its leading
unit share of the women's and girls' underwear market by nearly two
points to 35.2%.

In legwear, sock volumes increased 19%, benefiting from new products
and media advertising supporting the Hanes brand. The company
increased its number-one unit share of the U.S. sock category by 3
points to 19.6%, widening its lead over the number-two competitor to
more than 8 market share points. While unit volumes for sheer hosiery
fell 11%, margins rose due to cost efficiencies and an improved
product mix. The company increased its dollar share of the U.S. sheer
hosiery market by nearly 6 points to more than 55%.

Media advertising and promotion spending for Intimates and Underwear
was 13% lower than last year's first quarter spending. Starting with
the second quarter, increased marketing for our key brands, including
the launch of new campaigns for both Hanes and Playtex, is expected to
drive greater advertising and promotional spending in support of this
business. For the full year, marketing spending is expected to show a
double-digit increase over last year.

Corporate Interest Expense, Tax Rate, and Share Repurchase

Net interest expense was $48 million for the quarter, compared with
$51 million in the first quarter of last year. Interest expense
decreased as the company benefited from lower interest rates and
strong cash flow from operations.

The tax rate for the quarter was 18% compared to 19% in the year ago
quarter, excluding unusual items.

During the first quarter of fiscal 2003, Sara Lee Corporation
repurchased 6.7 million shares of its common stock at an average price
of $18.38 per share.

Outlook

Sara Lee's management currently expects diluted EPS, excluding unusual
items, for the second quarter of fiscal 2003 to fall within a range of
$.40 to $.42 compared to $.37 in the year-ago period. Full-year fiscal
2003 diluted EPS, also excluding unusual items, are expected to fall
in a range of $1.54 to $1.60, compared to $1.36 in fiscal 2002, a gain
of 13% to 18%.

By line of business, in the second quarter, management expects
modestly higher unit volumes and a strong double-digit increase in
operating income for Sara Lee Meats, driven by increased retail and
deli product sales, lower commodity costs and savings from the
company's Reshaping program. Sara Lee Bakery results in the second
quarter should show flat sales and profits as the company continues to
invest heavily in new product development and marketing initiatives to
offset weakness in the U.S. fresh bread category. Given their
significant exposure to foreign currency, reported results for Sara
Lee's Beverage and Household Products lines of business, the company's
two most global operations, will depend on changes in year-over-year
foreign currency values. In the second quarter, the Beverage group is
expected to report a modest increase in unit volumes and a slight
decline in profits, as strong results in Europe continue to be offset
by weakness in U.S. markets. Household Products unit sales are
expected to rise at a mid-single digit rate, while operating income
should grow more than 10% driven by increased sales of higher margin
products. Within the company's Intimates and Underwear line of
business, unit sales should increase for several core categories,
including socks, underwear and intimate apparel, and operating income
is expected to grow at a double-digit rate.

For the full year, the company is targeting sales growth of 2% to 4%,
excluding acquisitions, with a double-digit operating income increase
as all five lines of business are expected to contribute to higher
profits.

Webcast

Janet Bergman, senior vice president, Corporate Relations, will
discuss the first quarter results live via the Internet today at 9:00
a.m. (CDT). The live webcast can be accessed at www.saralee.com, and
will last approximately one hour. For people who are unable to listen
to the webcast live, it will be archived two hours following the
completion of the webcast under the "What's New" section of the Sara
Lee corporate Web site for 10 business days.

Forward-looking statements

This news release contains certain forward-looking statements
concerning Sara Lee's expected fiscal year 2003 financial results.
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 in the
forward-looking statements.

Factors that could cause Sara Lee's actual results to differ
materially from such forward-looking statements include the following:
(i) 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; (ii) significant
competitive activity, including advertising, promotional and price
competition, and changes in consumer demand for Sara Lee's products;
(iii) adverse economic trends, including reduced consumer spending,
relating in part to substantial declines in the U.S. equities markets;
(iv) Sara Lee's ability to continue to source production and conduct
manufacturing and selling operations in various countries in the world
due to the changing business conditions, the financial condition of
suppliers and political environments; (v) Sara Lee's ability to
achieve planned cash flows from capital expenditures and acquisitions,
particularly Earthgrains, and the availability of new acquisitions,
joint ventures and alliance opportunities that build stockholder
value; (vi) Sara Lee's ability to realize the estimated savings and
productivity improvements associated with the business Reshaping
initiative; (vii) fluctuations in the cost and availability of various
raw materials; (viii) the impact of various food safety issues in
parts of Europe on the consumption of meat products in general and the
cost of raw materials used in the production of finished goods; (ix)
credit and other business risks associated with customers operating in
a highly competitive retail environment; and (x) inherent risks in the
marketplace associated with new product introductions, including
uncertainties about trade and consumer acceptance. In addition, the
company's results may also 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.

Consequently, the company wishes to caution readers not to place undue
reliance on any forward-looking statements. We have provided
additional information in our Form 10-K for fiscal year 2002 and in
our quarterly reports on Form 10-Q, 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 one of the world's leading
branded consumer packaged goods companies, selling its products in
nearly 200 countries. The company has three global businesses - Food
and Beverage, Intimates and Underwear, and Household Products -
through which it manufactures and markets products of exceptional
quality and value under leading, well-known brand names such as Sara
Lee, Earth Grains, Jimmy Dean, Douwe Egberts, Chock full o'Nuts,
Hanes, Playtex, Bali, Dim, Kiwi, Ambi-Pur and Sanex.

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*T
                         Sara Lee Corporation
                   Executive Summary of Performance


First quarter fiscal 2003
(All results exclude unusual items)      Percentage change
----------------------------------------------------------------------


                                                 Sara Lee
                                      Sara Lee     Bakery
                                       Meats(1)  Group(2)  Beverage(3)
                                      --------   -------- ------------
Reported sales                          (2)%       51%          1%
----------------------------------------------------------------------
Base sales(a)                           (5)%       (3)%        (5)%
----------------------------------------------------------------------

Reported operating Income               21%        25%         (9)%
----------------------------------------------------------------------
Base operating income(a)                17%       (26)%       (18)%
----------------------------------------------------------------------

----------------------------------------------------------------------
Base unit volumes(b)                     1%        (2)%        (4)%
----------------------------------------------------------------------

Diluted earnings per share               -          -           -

Total advertising and
 promotional expense                     7%        34%         14%

----------------------------------------------------------------------
Media advertising expense               17%        15%        (18)%
----------------------------------------------------------------------
Promotional expense                     (7)%       69%         40%


                         Sara Lee Corporation
                   Executive Summary of Performance


First quarter fiscal 2003
(All results exclude unusual items)      Percentage change
----------------------------------------------------------------------

                                                 Intimates
                                    Household       and        Total
                                    Products(4)  Underwear(5)   SLE
                                    -----------  ------------  -----
Reported sales                           3%         0%          7%
----------------------------------------------------------------------
Base sales(a)                            1%        (1)%        (2)%
----------------------------------------------------------------------

Reported operating Income                5%        62%         25%
----------------------------------------------------------------------
Base operating income(a)                (1)%       56%         15%
----------------------------------------------------------------------

----------------------------------------------------------------------
Base unit volumes(b)                     1%         1%          0%
----------------------------------------------------------------------

Diluted earnings per share               -          -          42%

Total advertising and
 promotional expense                     4%       (13)%         1%
----------------------------------------------------------------------
Media advertising expense                5%       (13)%         0%
----------------------------------------------------------------------
Promotional expense                      3%       (12)%         2%



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

(a) Base business results exclude acquisitions, divestitures and the
    effect of currency.

(b) Base unit volumes exclude acquisitions and divestitures.

(1) Trail's Best was acquired in October 2001. There were no other
    acquisitions and no divestitures in this segment in FY02 or 1Q03.

(2) The Earthgrains Company was acquired on August 7, 2001, and the
    results of operations have been included since August 8, 2001.
    There were no other acquisitions and no divestitures in this
    segment in FY02 or 1Q03.

(3) Cafe Prima was acquired in December 2001. There were no other
    acquisitions and no divestitures in this segment in FY02 or 1Q03.

(4) There were no acquisitions or divestitures in FY02 or 1Q03 in this
    segment.

(5) The following businesses were sold in 1Q02: International Fabrics
    operations in France, Italy, Spain, Portugal, and the U.K.; Liabel
    and Vocal. International Fabrics China was sold in 3Q02. There
    were no other divestitures and no acquisitions in this segment in
    FY02 or 1Q03.


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


(in millions except per share amounts)
----------------------------------------------------------------------
                                  First Quarter Ended
                          ------------------------------------
                          September 28, September 29,  Percent
                              2002          2001        Change
                          ------------- -------------  -------

Net sales                 $  4,534      $  4,248           6.7%
                          ------------- -------------

Cost of sales                2,752         2,716
Cost of sales -
 product line exit              --            (3)
Selling, general and
 administrative expenses     1,366         1,218
Interest expense                67            74
Interest income                (19)          (23)
(Income) charges for exit
 activities and business
 dispositions                   (9)            4
                          ------------- -------------
                             4,157         3,986
                          ------------- -------------

Income before income taxes     377           262          44.1
Income taxes                    69            20
                          ------------- -------------
Net income                $    308      $    242          27.7
                          ============= =============

Net income per
 common share
  Basic                   $   0.39      $   0.31          25.8
                          ============= =============
  Diluted                 $   0.38      $   0.30          26.7
                          ============= =============

Average shares outstanding
  Basic                        782           783
                          ============= =============
  Diluted                      814           816
                          ============= =============

See accompanying notes to financial statements for information
regarding the unusual items and the acquisition of Earthgrains.



                                           Sara Lee Corporation (NYSE)
                                           ---------------------------
Operating Results by Industry Segment
Unusual Items not Allocated to Industry Segments
(in millions)             First Quarter Ended
----------------------------------------------------------------------
                    Sales                   Operating Income
              ------------------           ------------------
              Sept. 28, Sept. 29, Percent  Sept. 28, Sept. 29, Percent
                2002      2001    Change     2002      2001    Change
              --------  -------- --------  --------  --------  -------
Sara Lee Meats $   923   $   938  (1.7)%    $    89   $    74   21.0%
Sara Lee Bakery    822       545  50.8           44        35   25.3
Beverage           619       614   0.9           86        94   (8.6)
Household
 Products          478       464   3.1           72        68    5.0
Intimates and
 Underwear       1,693     1,689   0.3          206       127   62.2
              --------  -------- --------  --------  --------  -------
  Total sales
   and operating
   companies
   income        4,535     4,250   6.7          497       398   24.8
Intersegment
 sales              (1)       (2) 43.6           --        --     --
Amortization of
 identifiable
 intangibles        --        --    --          (24)      (14) (72.6)
General
 corporate
 expenses           --        --    --          (57)      (70)  19.1
Exit activities
 and business
 dispositions       --        --    --            9        (1)    NM
              --------  -------- --------  --------  --------  -------
Total net sales
 and operating
 income          4,534     4,248   6.7          425       313   35.8
Net interest
 expense            --        --    --          (48)      (51)   6.2
              --------  -------- --------  --------  --------  -------

Net sales and
 income before
 income taxes  $ 4,534   $ 4,248   6.7%     $   377   $   262   44.1%
              ========  ======== ========  ========  ========  =======


See accompanying notes to financial statements for information
regarding the unusual items and the acquisition of Earthgrains.


                                           Sara Lee Corporation (NYSE)
                                           ---------------------------
Operating Results by Industry Segment
Unusual Items Allocated to Industry Segments
(in millions)            First Quarter Ended
----------------------------------------------------------------------
                    Sales                   Operating Income
              ------------------           ------------------
              Sept. 28, Sept. 29, Percent  Sept. 28, Sept. 29, Percent
                2002      2001    Change     2002      2001    Change
              --------  -------- --------  --------  --------  -------
Sara Lee Meats $   923   $   938  (1.7)%    $    90   $    68   30.4%
Sara Lee Bakery    822       545  50.8           45        33   37.6
Beverage           619       614   0.9           86        96  (10.1)
Household
 Products          478       464   3.1           72        68    5.9
Intimates and
 Underwear       1,693     1,689   0.3          213       132   61.5
              --------  -------- --------  --------  --------  -------
  Total sales
   and operating
   companies
   income        4,535     4,250   6.7          506       397   27.4
Intersegment
 sales              (1)       (2) 43.6           --        --     --
Amortization of
 identifiable
 intangibles        --        --    --          (24)      (14) (72.6)
General
 corporate
 expenses           --        --    --          (57)      (70)  19.1
              --------  -------- --------  --------  --------  -------
Total net sales
 and operating
 income          4,534     4,248   6.7          425       313   35.8
Net interest
 expense            --        --    --          (48)      (51)   6.2
              --------  -------- --------  --------  --------  -------

Net sales and
 income before
 income taxes  $ 4,534   $ 4,248   6.7%     $   377   $   262   44.1%
              ========  ======== ========  ========  ========  =======


See accompanying notes to financial statements for information
regarding the unusual items and the acquisition of Earthgrains.


Consolidated Balance Sheets                Sara Lee Corporation (NYSE)
                                           ---------------------------
(in millions)
----------------------------------------------------------------------
                                  September 28,           June 30,
                                      2002                  2002
                                  -------------          ------------
ASSETS
Cash and equivalents               $     210             $     298
Trade accounts receivable              1,911                 1,831
Inventories                            2,495                 2,509
Other current assets                     337                   341
Net assets held for sale                   6                     7
                                  -------------          ------------

  Total current assets                 4,959                 4,986

Other non-current assets                 247                   192
Property, net                          3,129                 3,155
Trademarks and other identifiable
 intangibles, net                      2,067                 2,106
Goodwill, net                          3,290                 3,314
                                  -------------          ------------

                                   $  13,692             $  13,753
                                  =============          ============

LIABILITIES AND EQUITY
Notes payable                      $     865             $     468
Accounts payable                       1,171                 1,321
Accrued liabilities                    2,859                 2,953
Current maturities of long-term debt   1,307                   721
                                  -------------          ------------

  Total current liabilities            6,202                 5,463

Long-term debt                         3,463                 4,326
Deferred income taxes                    562                   534
Other non-current liabilities          1,040                 1,038
Minority interest in subsidiaries        634                   632
Preferred stock                           13                    18
Common stockholders' equity            1,778                 1,742
                                  -------------          ------------
                                   $  13,692             $  13,753
                                  =============          ============

Notes to the Financial Statements

1.) The Company's results for the first quarter of fiscal 2003 and
    2002 were affected by actions related to the Reshaping program
    initiated in May 2000. Reshaping actions completed during the
    first quarter of fiscal 2003 were executed for amounts that were
    more favorable than previously estimated and this resulted in an
    increase in pretax income, net income and diluted earnings per
    share of $9 million, $7 million and $.01, respectively. During the
    first quarter of fiscal 2002, the Company's management approved
    plans to close certain high cost manufacturing and distribution
    activities, and completed the disposition of certain non-core
    businesses. Also during the first quarter of 2002, the Company
    concluded that it could not complete a previously announced
    business disposition in a timely manner and this resulted in the
    reversal of the charge previously recognized for this planned
    action. The net impact of these fiscal 2002 activities was a $1
    million reduction in pretax income, a $29 million increase in net
    income and an increase in diluted EPS of $.04 per share.

                                           Sara Lee Corporation (NYSE)
                                           ---------------------------
Impact of Exit Activities and Business Dispositions on
Net Income and Diluted Earnings Per Share
-----------------------------------------
                                       First Quarter Ended
                                      ----------------------
                                      Sept. 28,    Sept. 29,   Percent
(In Millions, Except Per Share Data)    2002         2001      Change
------------------------------------  ---------    ---------   -------
Net income in accordance
 with U.S. GAAP                       $    308     $    242      27.7%

Exclude income from exit activities
 and business dispositions,
 net of tax                                 (7)         (29)    (76.7)
                                     ---------     ---------   -------

Net income excluding exit activities
 and business dispositions,
 net of tax                           $    301     $    213      41.9%
                                     =========     =========   =======

Diluted EPS in accordance with
 U.S. GAAP(1)                         $   0.38     $   0.30      26.7%

Exclude income from exit activities
 and business dispositions               (0.01)       (0.04)    (75.0)
                                     ---------     ---------   -------

Diluted EPS - excluding exit
 activities and business
 dispositions                         $   0.37     $   0.26      42.3%
                                     =========     =========   =======

    (1) EPS amounts are rounded to nearest cent, and individual
        amounts will not necessarily sum.


2.) In the first quarter of fiscal 2002, the Corporation acquired the
    outstanding common shares of The Earthgrains Company
    (Earthgrains). Under the terms of the purchase agreement, the
    Corporation acquired Earthgrains' common stock for $40.25 per
    share, or approximately $1.9 billion. Cash on the Earthgrains'
    balance sheet on the acquisition date reduced the purchase price
    to a net amount of approximately $1.8 billion. In addition, the
    Corporation assumed $1.0 billion of Earthgrains' long-term debt
    and notes payable. The results of operations of Earthgrains have
    been included in the consolidated financial results of the
    Corporation since August 8, 2001. As a result, the Corporation has
    included the consolidated financial results of operations from
    Earthgrains for the full first quarter of 2003, which is 38 days
    greater than included in the first quarter of fiscal 2002. The
    sales and operating profits generated by the Earthgrains business
    for the first 38 days of the first quarter of fiscal 2003 were
    $282 million and $17 million, respectively.

3.) Certain prior year amounts have been reclassified to conform to
    current year presentation.
*T

   Short Name: Sara Lee Corporation
   Category Code: QRF
   Sequence Number: 00001046
   Time of Receipt (offset from UTC): 20021024T004606+0100

    --30--db/in*

    CONTACT: Sara Lee Corporation
             Media:
             Julie Ketay, 312/558-8727
             or
             Analysts:
             Aaron Hoffman, 312/558-8739

    KEYWORD: ILLINOIS UNITED KINGDOM INTERNATIONAL EUROPE
    INDUSTRY KEYWORD: APPAREL/TEXTILES CONSUMER/HOUSEHOLD
FOODS/BEVERAGES RETAIL SUPERMARKETS EARNINGS
    SOURCE: Sara Lee Corporation

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