Sara Lee Corporation today announced revised earnings per share (EPS) guidance for its first quarter and full year for fiscal 2002 due to the adoption of new accounting rules concerning the amortization of goodwill and intangibles. The adoption of the new rules will increase net income by approximately $109 million for the full year and increase EPS by approximately $.13, evenly split during the year.

Sara Lee’s acquisition of The Earthgrains Company in August 2001 is expected to result in $.03 of EPS dilution in fiscal 2002. This guidance has not changed and reflects management’s best assessment of the financial impact of the acquisition at this time.

Including the effects of the new accounting rules and dilution from the acquisition of Earthgrains, management currently expects that EPS for fiscal 2002 will be in the range of $1.35 to $1.45. For the first quarter, EPS are expected to be in the range of $.24 to $.27. Management’s revised guidance is a reflection of changes in accounting standards, not a change in operational outlook.

In August, Sara Lee management indicated that EPS for the full year would fall in the range of $1.25 to $1.35 and $.21 to $.24 for the first fiscal quarter, based on old accounting standards for amortizing goodwill and intangibles and before dilution from Earthgrains. At that time, the company estimated that the new accounting rules would result in an $.08 EPS gain for fiscal 2002.

As a point of comparison, Sara Lee estimates that fiscal 2001 EPS would have been $1.49 under the new rules relating to the amortization of goodwill and intangibles compared to $1.36 reported for 2001, and the first fiscal quarter would have been $.32 compared to $.29 reported for the first quarter 2001.

C. Steven McMillan, Sara Lee’s president and chief executive officer, will speak with investors about the outlook for the company today at 7:30 a.m. (CDT). His remarks will be broadcast live via the Internet and can be accessed at For people who are unable to listen to the live webcast, it will be archived in the Investor Relations 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 first quarter and fiscal year 2002 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) inherent risks in the marketplace associated with new product introductions, including uncertainties about trade and consumer acceptance; (iv) Sara Lee’s ability to successfully integrate acquisitions, particularly Earthgrains, into its existing operations; (v) the financial impact of Sara Lee’s decision to dispose of certain non-core business units; (vi) fluctuations in the costs and availability of various raw materials; (vii) the effect on future revenues and expenses in Sara Lee’s Packaged Meats business resulting from the foot-and-mouth viral disease in parts of Europe; and (viii) the corporation’s ability to realize forecasted savings, as well as improvements in productivity and efficiency, from its business reshaping programs. In addition, Sara Lee’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 that affect the corporation in markets where it competes.

Consequently, the corporation 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 2001, 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.

Sara Lee Corporation is a global branded consumer packaged goods company with approximately $20 billion in annual revenues. Its leading brands include Sara Lee, Douwe Egberts, Hillshire Farm, Kiwi, Hanes and Playtex.