August 18, 2010

Bob Evans Q1 profit drops due to high pork prices

Bob Evans Farms Inc. said Tuesday (Aug 17) that its total Q1 profit fell 22.1% on a sharp drop from its food products division profit.

The restaurant and sausage company earned almost US$12.6 million, or US$0.41 per share, for the quarter that ended July 30. That was down from a profit of US$16.1 million, or US$0.52 per share, during the same period last year.

Revenue fell 3.9% to US$412.6 million, from US$429.5 million a year earlier. Analysts surveyed were expecting a profit of US$0.44 per share on revenue of US$422.1 million.

Restaurant profit rose 4.8% to US$21.4 million. But profit in its food segment shrivelled to US$29,000, from almost US$4.8 million a year earlier, as the company faced what it said were record-high prices for sows.

It expects "significant improvement" in the second half of the year because it raised prices on its food products segment early in the current quarter, and cut manufacturing costs. It also expects revenue to rise gradually at its restaurants because of menu changes.

Sales at its 566 Bob Evans restaurants open at least a year fell 3.5% compared with the same quarter last year. At its 131 Mimi's Cafe restaurants, sales fell 7.6% at locations open at least a year. So-called same-store sales are a key measure for retailers.

The company said it still expects operating income of US$105 million to US$110 million for the full year. It expects revenue of US$1.7 billion, the same as analysts are expecting.

It expects Bob Evans Restaurants sales of US$965 million go up to US$985 million, with full-year same-store sales flat to down 2%. It plans three new Bob Evans restaurants this year. It said it expects Mimi's Cafe sales of US$380 million reach US$395 million, with full-year same-store sales falling 2%-5%.

Bob Evans shares rose US$0.43 to close at US$25.56 before the results were released.