US consumer goods giant Sara Lee has reported a sharp fall in first-quarter profit, impacted by impairment and transformation charges, exit costs and lower net sales.

The company posted net income of  $67 million for the first quarter to 1 October, compared to $352m for the year-ago period.

Net sales for the first quarter were $4.3 billion compared to $4.4bn in the prior year's first quarter, a decrease of 2 per cent, with reduced North America branded apparel sales for the quarter.

The Branded Apparel Americas/Asia business, which is to be spun off from Sara Lee between June and September 2006, reported quarterly sales of $1.25bn, down 8 per cent from last year. The company cited continued weakness in the hosiery category and planned exits of various low-margin product lines.

"During the quarter, our management team continued to take the necessary steps to transform Sara Lee and improve our performance," said Brenda Barnes, chairman and chief executive officer of Sara Lee.

"While we exceeded our forecasted earnings per share target, we still are not satisfied with our business performance. However, our ongoing transformation initiatives are building the momentum needed to drive improvement."