US food and clothing company Sara Lee has said first-quarter earnings per at the upper end of the company’s guidance, helped by sales growth in all five lines of business.

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The company reported net income of US$352m, or 44 cents per share, for the first quarter to 2 October, compared to $230m, or 29 cents per share, for the year-ago period.


Net sales rose to $4.86bn from $4.67bn. The company said it achieved higher sales in all of its five lines of business: meats, bakery, beverage, household products and branded apparel.


Sara Lee’s bakery business generated net sales of $843m in the first quarter, compared to $836m a year earlier. Operating segment income rose 59.0% to $64m. The company said net sales increased as a result of strong new product sales and favourable currency exchange rates. Operating segment income rose significantly as a result of higher sales, increased cost saving activities and lower benefit costs.


The company’s meats business achieved a 4.5% increase in net sales to $1.04bn, as a result of higher net selling prices, the strength of the euro and improvements in the product mix. However, higher costs for all significant raw materials, including pork, beef and poultry, continued to put pressure on operating segment income, which declined 38.9% to $62m.

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“Sara Lee delivered solid results this quarter, despite a very challenging commodity environment,” said C. Steven McMillan, chairman and chief executive.


The company said it currently expects earnings per share for the second quarter of fiscal 2005 to fall within a range of 35 and 40 cents, compared to 39 cents in the year-ago period. Full-year fiscal 2005 earnings per share are expected to be in a range of $1.61 to $1.71, compared to $1.59 in fiscal 2004.


Sara Lee expects the challenging market conditions that affected operations in the first quarter of fiscal 2005, most notably higher raw material and packaging costs, to continue into the second quarter of this year.