USA &#8211, Sara Lee Foods announced a 2% decline in sales and a 17% decline in operating profits for the three months to 31 December 2000.

While net sales for the company as a whole increased 3% to $4.8 billion (5.2bn euro) and unit volumes grew 8%, operating income fell 1% to 660 million euro.

Commenting on the loss Steven McMillan, president and chief executive officer of Sara Lee, said: “Sara Lee reported solid sales gain and met earnings expectations in our second quarter, despite a weak euro and a challenging retail environment. The soft retail environment has continued into January, and we expect this weakness to lead to lower profits causing us to lower our earnings expectations for the third quarter.”

The sale of the company’s foodservice distribution business, PYA/Monarch, to Royal Ahold for 1.69 billion euro in December 2000 resulted in a net tax gain of 692 million euro.