SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                  FORM 10-Q

                    Quarterly Report Under Section 13 or 15(d)
                      of the Securities Exchange Act of 1934

                     For the Quarter Ended September 10, 1996

                           Commission file number 1-7554

                               THE EARTHGRAINS COMPANY
                (Exact name of registrant as specified in its charter)


          DELAWARE                                     36-3201045
(State or other jurisdiction of                     I.R.S. Employer
incorporation or organization)                     Identification No.)


                                  314-259-7000
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
                              Yes [X ]  No [ ]


Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

    $.01 Par Value Common Stock - 10,123,368 shares as of October 8, 1996


<PAGE>
<PAGE>
                         THE EARTHGRAINS COMPANY

                                  Index


                                                                  Page No.

Part I.  FINANCIAL INFORMATION

Condensed Consolidated Balance Sheet                                  2 

Condensed Consolidated Statements of Earnings                         3

Condensed Consolidated Statements of Cash Flows                       4

Notes to Condensed Consolidated Financial Statements                  5

     Management's Discussion and Analysis of Financial Condition 
     and Results of Operations                                        7

     Unaudited Pro Forma Financial Information                        9

Part II. OTHER INFORMATION

     Other Information                                               11
     Exhibits and Reports on Form 8-K                                11



<PAGE>
<PAGE>
                          THE EARTHGRAINS COMPANY
                  Condensed Consolidated Balance Sheet
                             (In millions)
                              (Unaudited)

                                              September 10,    March 26,
                                                 1996            1996
                                              -------------    ---------
Assets
Current assets:
     Cash and cash equivalents                 $   41.9      $   38.9
     Accounts receivable, net of allowance for
      doubtful accounts of $6.9 and $6.7,
      respectively                                148.4         138.9
      Inventories                                  71.0          68.0
      Deferred income taxes and other              28.7          24.0
                                               ---------     ---------
           Total current assets                   290.0         269.8
Other assets                                       29.7          38.6
Goodwill, net                                     128.1         130.3
Plant and equipment, net                          715.9         727.0
                                               ---------     ---------
           Total assets                        $1,163.7      $1,165.7
                                               =========     =========
Liabilities and Shareholders' Equity
Current liabilities:
     Accounts payable                         $   117.7    $     98.1
     Accrued salaries, wages and benefits          48.5          48.6
     Accrued taxes, other than income taxes        13.9          11.4
     Accrual for restructuring and consolidation    8.1          15.4
     Other current liabilities                     26.4          36.3
                                               ---------     ---------
          Total current liabilities               214.6         209.8

Postretirement benefits                           122.5         123.1
Long-term debt                                     96.1          92.6
Deferred income taxes                              87.7          87.2
Other noncurrent liabilities                       60.2          72.2
Commitments and contingencies                        --            --
Shareholders' equity                              582.6         580.8
                                               ---------     ---------
          Total liabilities and equity         $1,163.7      $1,165.7
                                               =========     =========



   See accompanying Notes to Condensed Consolidated Financial Statements.

                                 -2-

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                          THE EARTHGRAINS COMPANY
               Condensed Consolidated Statements of Earnings
                    (In millions except per share data)
                               (Unaudited)


<TABLE>

                                  Twelve week               Twenty four week
                                  period ended                period ended        
                          ---------------------------   ----------------------------
                          September 10,  September 12,  September 10,   September 12,
                              1996           1995            1996              1995
                          ------------   -------------  -------------   -------------

<S>                          <C>             <C>            <C>               <C>
Net Sales                    $381.8          $383.1         $752.3            $767.9
Cost of Products Sold         225.2           237.7          450.5             472.4
                              -----           -----          -----             -----
Gross Profit                  156.6           145.4          301.8             295.5
Marketing, Distribution and
  Administrative Expenses     146.2           143.9          288.5             288.7
Provision for Restructuring
  and Consolidation, net        1.0             1.9            1.0               3.4
                              -----           ------         -----             -----
Operating Income (Loss)         9.4            (0.4)          12.3               3.4
Other Income and Expenses:
     Interest expense          (1.4)           (0.6)          (2.8)             (0.9)
     Other income, net            -             1.4            0.8               2.7
                              -----           -----          -----             -----
Income before Income Taxes      8.0             0.4           10.3               5.2

Provision for Income Taxes      3.5             0.5            5.1               3.5
                              -----           -----          -----             -----
Income (Loss)                  $4.5           $(0.1)          $5.2              $1.7
                              =====           =====          =====             =====
Earnings (Loss) Per Share      $0.45          $(0.01)         $0.52             $0.17
                              ======          ======         ======            ======

Weighted Average Shares
  Outstanding (pro forma for
  prior year periods)          10.1            10.3           10.1              10.3
                              =====           =====          =====             =====

</TABLE>






  See accompanying Notes to Condensed Consolidated Financial Statements.

                                          -3-
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                             THE EARTHGRAINS COMPANY
                 Condensed Consolidated Statements of Cashflows
                                (In millions)
                                 (Unaudited)

                                        For the twenty four week period ended
                                        -------------------------------------
                                                September 10,    September 12,
                                                   1996              1995
                                                -------------    -------------
Cash flow from operating activities:
   Net income                                        $5.2             $1.7
   Adjustments to reconcile earnings to net
     cash flow provided by operations:
        Depreciation and amortization                36.6             40.0
        Deferred income taxes                         0.5             (4.9)
        Provision for restructuring and
          consolidation                               1.0              3.4
       (Gain)/loss on disposal of fixed assets       (0.7)             0.7
       Changes in noncash working capital           (13.0)           (13.8)
       Other, net                                     8.4            (19.2)
                                                    -----            -----
          Net cash flow from operations              38.0              7.9
                                                    -----            -----
Cash flows from investing activities:
   Capital expenditures                             (39.6)           (48.1)
   Other, net                                         1.1              2.5
                                                    -----            -----
          Net cash used by investing activities     (38.5)           (45.6)
                                                    -----            -----
Cash flows from financing activities:
   Proceeds from (payments on) borrowings, net        3.5               --
   Net transactions with Anheuser-Busch                --             22.9
                                                    -----            -----
          Net cash provided by financing activities   3.5             22.9
                                                    -----            -----
Net increase/(decrease) in cash and cash equivalents  3.0            (14.8)

Cash and cash equivalents, beginning of period       38.9             38.7
                                                    -----            -----
Cash and cash equivalents, end of period            $41.9            $23.9
                                                    =====            =====

    See accompanying Notes to Condensed Consolidated Financial Statements.





                                        -4-
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Notes to Condensed Consolidated Financial Statements
----------------------------------------------------



Note 1 - Effective March 26, 1996, one share of The Earthgrains Company (the
Company or Earthgrains) $.01 par value common stock was distributed to holders
of Anheuser-Busch Companies, Inc. (Anheuser-Busch) common stock for every 25
shares of Anheuser-Busch common stock owned at the established record date
(the Distribution).  At the time of the Distribution, the Company began
operations as a separate, publicly owned company.

Note 2 - The Company has changed its fiscal year end from the Tuesday closest
to December 31 to the last Tuesday in March.  This report reflects the
Company's second quarter of its new fiscal year for the twelve week period
ended September 10, 1996.

In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (consisting of only
normal recurring adjustments) necessary for a fair presentation of the
financial statements pursuant to the applicable SEC rules and guidelines
pertaining to interim financial information.  Operating results for any
quarter are not necessarily indicative of the results for any other quarter or
for the full year.  These condensed consolidated financial statements should
be read in conjunction with the combined financial statements and notes
thereto included in the Company's registration filing on Form 10.

Note 3 - Inventories are carried at the lower of cost or market.  Cost is
determined under the first-in, first-out method.

         Total inventories consisted of the following:

                                             September 10,     March 26,
                                                 1996            1996
                                             -------------     ---------

                          Raw materials       $   55.5        $   53.6
                          Finished goods          15.5            14.4
                                              ------------    ----------
                                              $   71.0        $   68.0
                                              ============    ===========

                                   -5-

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Note 4 - Earnings per share for the current period are based on the weighted
average number of shares of common stock outstanding during the period.  For
the year ago periods presented, earnings per share were computed using the
weighted average shares of Anheuser-Busch common stock outstanding during the
respective period, adjusted for a 1 to 25 stock distribution ratio.


Note 5 - On October 7, 1996, the Company announced that it has entered into an
agreement to acquire the assets of Heiner's Bakery, Inc. of Huntington, West
Virginia.  Heiner's, a privately held, wholesale bakery is the sales leader of
branded bread, buns and rolls in its marketing territory throughout West
Virginia and in portions of Ohio and Kentucky.


































                                  -6-

<PAGE>
<PAGE>
Management's Discussion and Analysis of Financial Condition and
Results of Operations

INTRODUCTION
------------

Effective at the close of business on March 26, 1996 (the Distribution Date),
shares of the Company were distributed to shareholders of Anheuser-Busch
Common Stock, based upon a ratio of 1 to 25.  Following the distribution, the
Company began operations as an independent, publicly held company.  This
discussion summarizes the significant factors affecting the consolidated
operating results, financial condition and liquidity of The Earthgrains
Company for the twelve and twenty four week periods ended September 10, 1996
compared to the twelve and twenty four week periods ended September 12, 1995. 
This discussion should be read in conjunction with the combined financial
statements and notes thereto for the fiscal year ended January 2, 1996
included in the Company's registration statement on Form 10.  

RESULTS OF OPERATIONS
---------------------

Net sales for the twelve week period ended September 10, 1996, of $381.8
million were consistent with $383.1 reported for the comparable prior year
period. Net sales for the twenty four week period ended September 10, 1996
were $752.3 million, a decrease from comparable 1995 sales of $767.9 million. 
The decrease can be attributed to the planned consolidation and restructuring
that resulted in the closing or sale of underperforming and non-core
businesses.  This decrease was partially offset by increased volume across all
on-going business units, including international operations and by price
increases taken in effort to offset escalating flour costs.  After adjusting
sales for the closed or sold facilities in both periods presented, sales for
the twelve week period increased by $18.9 million, or 5.2%, and $30.4 million,
or 4.2%, on a year to date basis.

Gross margins for the current period increased to 41.0% from 38.0% in the year
ago period.  Margin improvements can be attributed to the achieved price
increases, benefits of the restructuring and consolidation process, and
improved operating efficiencies.

Marketing, distribution and administrative expenses reflect the elimination of
costs through the closing or sale of facilities offset by costs associated
with being an independent company incurred during the current periods.

The $1.0 million pre-tax restructuring charge in the current period was
recorded in conjunction with the recently announced closing of the bakery
production facility in Augusta, Georgia.  The production and distribution for
the area will be assumed by the existing Atlanta bakery.  $1.9 million of the
fiscal 1995 provision for restructuring and consolidation was recorded in the
year ago period to cover estimated expenses arising from the consolidation of
certain domestic bakery operations identified at that date.  

The increase in interest expense is directly related to the increased debt for
the distribution payment to Anheuser-Busch in conjunction with the spin-off.

The variance in the effective income tax rate reflects the relative impact of
the nondeductible fixed goodwill amortization on the respective earnings
levels.

                                     -7-

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Net earnings for the twelve week period were $4.5 million or $.45 per share,
compared to a loss of $0.1 million, or a $.01 loss per share, computed on the
basis of pro forma average shares outstanding in the prior year's comparable
period. Year to date earnings were $5.2 million or $.52 per share compared to
$1.7 million or $.17 per share in 1995.  

The historical statement of earnings for the year ago period does not reflect
interest expense related to long-term debt assumed by the Company upon the
distribution at March 26, 1996 and certain administrative expenses associated
with operating as an independent, stand-alone company.  For a presentation of
the potential effect these items and events may have had on the Company's
results for the year ago period see the Unaudited Pro Forma Financial
Information elsewhere in this document.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Concurrent with the Distribution, the Company used borrowings under a $215
million unsecured revolving credit facility with several financial
institutions to pay $80 million to Anheuser-Busch as a partial payment of its
intercompany payable and to fund working capital needs and general corporate
purposes.  Upon the effective date of the distribution, the remaining
intercompany payables and receivables between the Company and Anheuser-Busch
was contributed to the capital of the Company.  A separate $15 million
committed line of credit is also maintained for servicing funding
requirements.

The Company's primary source of liquidity is cash flow from operations, which
increased to $38.0 million for the twelve weeks ended September 10, 1996.  Net
working capital, excluding cash and cash equivalents and short-term
borrowings, was $33.5 million at September 10, 1996 compared to $21.1 million
at March 26, 1996.

The funding for the acquisition of Heiner's will be sourced through the
existing credit agreement and cash generated from operations.  The Company's
primary routine cash requirements will consist of funding capital expenditures
and interest payments pursuant to the credit facility.  The Company has
invested $39.6 in capital expenditures year to date.

Cash provided by operations and borrowings available under the credit
agreement should continue to provide the funding for ongoing cash
requirements.  

ENVIRONMENTAL MATTERS
---------------------

The Company is subject to Federal, state and local environmental protection
laws and regulations and is operating within such laws or is taking action
aimed at assuring compliance with such laws and regulations.  Earthgrains has
been identified as a potentially responsible party ("PRP") at certain
locations by the EPA and may be required to share in the cost of cleanup with
respect to two sites.  While it is difficult to quantify with certainty the
financial impact of actions related to environmental matters, based on the
information currently available it is management's opinion that the ultimate
liability arising from such matters, taking into consideration established
reserves, should not have a material effect on the Company's results of
operations or financial position. 

                                    -8-

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                              THE EARTHGRAINS COMPANY
                     UNAUDITED PRO FORMA FINANCIAL INFORMATION

     The condensed consolidated statements of earnings of the Company
presented for the year ago periods reflect a period during which the Company
operated as a subsidiary of Anheuser-Busch.  These historical financial
statements of the Company may not necessarily reflect the consolidated results
of operations of the Company or what the results of operations would have been
if the Company had been an independent, public company during such period.

     The unaudited pro forma condensed consolidated statements of earnings for
the twelve and twenty four week periods ended September 12, 1995 present the
consolidated results of Earthgrains' operations assuming that the Distribution
had occurred as of March 29, 1995.  Such statements of earnings have been
prepared by adjusting the historical statement of earnings for the effect of
costs and expenses and the recapitalization to reflect the Distribution as if
it had been effected on March 29, 1995.

     The consolidated financial statements as of and for the periods ended
September 10, 1996 and the consolidated balance sheet of the Company as of
March 26, 1996 reflect the effects of the Distribution.























                                  -9-

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                           The Earthgrains Company
       Unaudited Pro Forma Condensed Combined Statements of Earnings
                    (In millions, except per share data)


<TABLE>

                             For the Twelve Week Period      For the Twenty Four Week Period
                              Ended September 12, 1995         Ended September 12, 1995
                             --------------------------      -------------------------------


                                        Pro Forma    Pro                    Pro Forma   Pro
                           Historical  Adjustments  Forma      Historical  Adjustments  Forma
                           ----------  -----------  -----      ----------  -----------  -----

<S>                          <C>         <C>       <C>           <C>         <C>       <C>
Net Sales                    $383.1      $  --     $383.1        $767.9      $  --     $767.9

Cost of products sold         237.7         .8(a)   238.5         472.4        1.6(a)   474.0
                             ------      ------    ------        ------      ------    ------

Gross profit                  145.4        (.8)     144.6         295.5       (1.6)     293.9

Marketing, distribution and
  administrative expenses     143.9        4.9(a)   148.8         288.7        9.8(a)   298.5

Provision for restructuring
  and consolidation, net        1.9         --        1.9           3.4         --        3.4
                             ------      ------    ------        ------      ------    ------
Operating income (loss)        (0.4)      (5.7)      (6.1)          3.4      (11.4)      (8.0)
                             ------      ------    ------        ------      ------    ------
Other income and expenses:
     Interest expense          (0.6)      (1.2)(b)   (1.8)         (0.9)      (2.4)(b)   (3.3)
     Other income, net          1.4         --        1.4           2.7         --        2.7
                             ------      ------    ------        ------      ------    ------
Income (loss) before income
  taxes                         0.4       (6.9)      (6.5)          5.2      (13.8)      (8.6)
                             ------      ------    ------        ------      ------    ------
Provision benefit for
  income taxes                  0.5       (2.5)(c)   (2.0)          3.5       (5.0)(c)   (1.5)
                             ------      ------    ------        ------      ------    ------
Net income (loss)            $ (0.1)    $ (4.4)    $ (4.5)        $ 1.7     $ (8.8)    $ (7.1)
                             ======      ======    ======        ======      ======    ======
(Loss) per share (d)                               $ (.44)                             $ (.69)
                                                   ======                              ======
Weighted average shares
  outstanding(d)                                     10.3                                10.3
                                                   ======                              ======
-----------------------

(a)  To reflect the estimated incremental costs associated with being an independent, public
company.
(b)  To reflect interest expense on incremental debt and working capital requirements.
(c)  To reflect tax effect of the proforma adjustments.
(d)  The number of shares used to compute earnings (loss) per share is based on the weighted
average number of shares of Anheuser-Busch common stock outstanding during the period adjusted
for the 1 for 25 stock distribution ratio.

</TABLE>


                                         -10-

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<PAGE>
                     PART II.  OTHER INFORMATION


Item 1.  Legal Proceedings.  The Company has no legal proceedings which have
become a reportable event in the current period.

Item 2.  Changes in Securities.  None.

Item 3.  Defaults Upon Senior Securities.  None.

Item 4.  Submission of Matters to a Vote of Security-Holders.  No matters were
submitted to a vote of security-holders during the current period.

Item 5.  Other Information.  None.

Item 6.  Exhibits.

         (a)  27 - Financial Data Schedule

         (b)  On October 7, 1996, the Company filed with the Securities and
Exchange Commission a current report on Form 8-K announcing the acquisition of
Heiner's Bakery, Inc.






















                                -11-

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SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                   THE EARTHGRAINS COMPANY
                                   (Registrant)


Date:  October 25, 1996             By:  Mark H. Krieger
                                         ---------------
                                         Mark H. Krieger
                                         Vice President and
                                         Chief Financial Officer