DOWNERS GROVE, ILL. — Operating income within the North American Fresh Bakery unit of Sara Lee fell 15% to $14 million in the first quarter of fiscal 2010 ended Sept. 26, led lower by a $7 million charge for a partial withdrawal liability relating to a multi-employer pension plan. Adjusted operating income, meanwhile, was $22 million, up 31% from $17 million in the first quarter of fiscal 2009.

Net sales in the segment fell 5% to $541 million from $571 million, primarily due to lower unit volumes, unfavorable sales mix and price declines following lower input costs and competitive pressures.

"During the first quarter, fresh bakery launched its marketing campaign for Sara Lee Soft & Smooth breads built around Disney Channel’s popular ‘Wizards of Waverly Place’ TV series," Sara Lee said. "New products launched in the first quarter included Sara Lee Soft & Smooth Mini Bagels, Sara Lee Delightful wheat buns and EarthGrains 100% Natural Thin Buns."

In its International Bakery business, Sara Lee posted operating income of $6 million, down 64% from $15 million in the same period a year ago. The most recent quarter included $7 million in Project Accelerate charges. Adjusted operating income for the year was $13 million, down 12% from $14 million.

Sales for the quarter fell 12% to $204 million from $231 million.

"In International Bakery, the year-ago quarter included a substantial amount of branded business that has since shifted to private label as a result of the very weak Spanish economy," Sara Lee said. "While the first half of the year will likely be down compared to the year-ago period due to this shift to private label, the benefits of productivity improvements, new product roll-outs and cost reductions are expected to contribute to an improved second half of fiscal 2010."

During the first quarter, Sara Lee said it successfully launched Ortiz branded bread in Spain, various new Sara Lee branded ice creams in Australia and several private label refrigerated dough products in France.

Overall, Sara Lee’s North American business units, primarily its processed meats and food service operations, boosted earnings for the company during the first quarter of fiscal 2010. Net income for the quarter was $284 million, equal to 41c per share of common stock, an increase compared to the previous year when the company’s net income was $230 million, or 33c per share, during the same period.

Sales for the quarter were $2,588 million, down from $2,794 million.

"I’m very pleased with our first-quarter performance, which demonstrates substantial bottom-line improvement," said Brenda C. Barnes, chairman and chief executive officer. "A number of factors contributed to our results, including lower input costs, Project Accelerate cost savings and pricing discipline. At the same time, we’re increasing or maintaining our market share positions in many of our key categories behind important new products such as Hillshire Farm Family Size lunchmeat tubs, Jimmy Dean D-Lights breakfast sandwiches and various new Senseo coffee pods in our international markets."

As a result of the company’s first-quarter performance, Ms. Barnes said Sara Lee was increasing its earnings per share guidance for the full year to a range of $1.12 to $1.18 per share, up from $1.03 to $1.09 per share.