Sara Lee Corporation Acquires $562 Million of Stock in Share Repurchase Program; Company continues to negotiate with potential buyers regarding the sale of its European apparel business

Business Wire, Sept 8, 2005

CHICAGO -- At the Prudential "Back-to-School" Consumer Conference today, L.M. (Theo) de Kool, executive vice president and chief financial and administrative officer of Sara Lee Corporation, announced that the company has repurchased 29 million shares of its outstanding common stock since July 3, 2005, the beginning of the company's fiscal year.

The company's repurchases were made through a combination of open market purchases and an accelerated share repurchase program facilitated by Citigroup for a total cost of $562 million. The accelerated share repurchase program is expected to be completed within three to six months. The repurchases are part of the company's previously announced $2 billion, multi-year share repurchase program.

"In August, we underscored our commitment to deliver value to Sara Lee's shareholders as we execute the company's transformation by outlining a $2 billion, multi-year share repurchase program and our plans for the 2006 dividend," said de Kool. "We also stated that the company would make $1 billion of the share repurchases during our current fiscal year, and we have taken a major step toward achieving that milestone."

On Aug. 1, 2005, Sara Lee's board of directors increased the number of shares authorized for repurchase under the corporation's continuing stock repurchase program by 100 million shares, or approximately $2 billion in share buy-backs based on the current stock price. After today's announcement, Sara Lee has approximately 87 million shares remaining under the share repurchase authorization.

During his remarks, de Kool also provided an update on the company's planned divestitures.

"We continue to work aggressively on our planned divestitures and are pleased that we were able to announce the sale of our direct selling business ahead of schedule," said de Kool. "In addition, we currently are negotiating with several interested parties regarding the sale of our European apparel business. However, we are unlikely to announce that transaction by our original target of the end of September."

Forward-looking Statements

This news release contains forward-looking statements regarding Sara Lee's capital structure initiatives, including its stock repurchase program, and planned business divestitures In addition, from time to time, in oral statements and written reports, the corporation discusses its expectations regarding the corporation's future performance by making forward-looking statements preceded by terms such as "expects," "likely" or "believes." 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. Consequently, the corporation wishes to caution readers not to place undue reliance on any forward-looking statements.

Among the factors that could cause Sara Lee's actual results to differ from such forward-looking statements are factors relating to:

--Sara Lee's relationship with its customers, such as (i) a significant change in Sara Lee's business with any of its major customers, such as Wal-Mart, the corporation's largest customer, including changes in the level of inventory these customers maintain; and (ii) credit and other business risks associated with customers operating in a highly competitive retail environment;

--The consumer marketplace, such as (iii) significant competition, including advertising, promotional and price competition, and changes in consumer demand for Sara Lee's products; (iv) fluctuations in the availability and cost of raw materials, Sara Lee's ability to increase product prices in response and the impact on Sara Lee's profitability; (v) the impact of various food safety issues on sales and profitability of Sara Lee products; and (vi) inherent risks in the marketplace associated with new product introductions, including uncertainties about trade and consumer acceptance;

--Sara Lee's transformation plan, such as (vii) Sara Lee's ability to complete planned business dispositions, and the timing and terms of such transactions; (viii) Sara Lee's ability to obtain a favorable tax ruling, and any other required regulatory approvals, on the proposed spin-off of its Branded Apparel Americas/Asia business; (ix) Sara Lee's ability to effectively integrate its remaining businesses into the contemplated new business structure, including Sara Lee's ability to transition customers to different Bakery brands, transition to common information systems and processes and manage plant capacity and workforce reductions; (x) Sara Lee's ability to generate the anticipated efficiencies and savings from the transformation plan; and (xi) the impact of the transformation plan on Sara Lee's relationships with its employees, its major customers and vendors and Sara Lee's cost of funds;

--Sara Lee's international operations, such as (xii) 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; and (xiii) Sara Lee's ability to continue to source production and conduct manufacturing and selling operations in various countries due to changing business conditions, political environments, import quotas and the financial condition of suppliers; and