US food and consumer goods giant Sara Lee has reported a fall in income for the year ended 2 July 2005, blaming higher costs, a tough European retail environment and the costs of restructuring.

In the fourth quarter the company made a loss of $148m, compared with a $354m profit the year before. Sales in the quarter fell to $4.754bn from $5.020bn.

Net income for the year was $719m, compared with $1.272bn in the previous year. Net sales were $19.254bn, compared with $19.119m.

However the main loss in the fourth quarter was in the company's branded apparel business, which lost $265m, compared with a profit of $148m last year. The company's meat business made a $72m profit in the fourth quarter, against a $102m profit last year and its baker made $53m, compared with $35m last year. 

"Although our business results are in line with what we anticipated, they are not where we want them to be, underscoring the need for the Transformation plan we announced in February," said Brenda C. Barnes, president and chief executive officer of Sara Lee Corporation.

"In less than six months, we've completed an incredible amount of Transformation work," she added. "Our new organization design is completed and implemented. We have a new headquarters facility just outside of Chicago in Downers Grove and the first people have already moved in. We have hired chief information and chief procurement officers and are well along in staffing those organizations. We have developed plans for fiscal 2006 that include initiatives to improve our operational efficiencies. We also continue to move forward with our announced divestitures and the spin-off of Branded Apparel Americas/Asia. At the same time, we have developed and announced plans to return value to shareholders.

"We continue to focus on improving our operating results and believe they will get progressively better over the course of fiscal 2006. We are taking the right steps to make Sara Lee a substantially better company as quickly as possible, and we are making great progress," concluded Barnes.