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Bob Evans Farms Inc. (BOBE) filed Quarterly Report for the period ended 2011-10-28.
Bob Evans Farms Inc. has a market cap of $970.3 million; its shares were traded at around $31.99 with a P/E ratio of 13.8 and P/S ratio of 0.6. The dividend yield of Bob Evans Farms Inc. stocks is 3.1%. Bob Evans Farms Inc. had an annual average earning growth of 4.7% over the past 10 years. GuruFocus rated Bob Evans Farms Inc. the business predictability rank of 3.5-star.
This is the annual revenues and earnings per share of BOBE over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of BOBE.
Highlight of Business Operations:
Consolidated net sales decreased 2.4% to $407.2 million in the second quarter of fiscal 2012 compared to $417.0 million in the corresponding period last year. The net sales decrease was comprised of a decrease in the restaurant segment of $9.2 million and a decrease in the foods segment of $0.7 million. Restaurant sales accounted for 80.8% of consolidated net sales in the second quarter of fiscal 2012. For the six-month period ended October 28, 2011, consolidated net sales decreased $17.1 million, or 2.1%, compared to the corresponding period last year.Restaurant sales decreased $9.2 million, or 2.7%, in the second quarter of fiscal 2012 or 2.8%, through six months of fiscal 2012 compared to the corresponding periods last year. The sales decreases were primarily due to negative same-store sales at both of our restaurant concepts. We have implemented menu and marketing initiatives designed to highlight our incremental sales layers and value messaging. At Bob Evans Restaurants, we introduced “$6 Farmhouse Deals” with a 99 cent side dish add-on, bakery items are available at our remodeled restaurants and carryout continues to grow with “Family-Meals-To-Go” coupled with $5 Soup-to-Go offers. At Mimi’s, we introduced a new menu in mid-October to focus on value, “Mimi’s My Way 1-2-3” utilizes the add-on strategy in the same manner as Bob Evans Restaurants and we continue to see increases in alcohol sales. We expect to convert 35 Mimi’s restaurants with beer and wine only to now include limited liquor offerings in the third quarter of fiscal 2012 to grow alcohol sales further.
The foods segment experienced a sales decrease of $0.7 million, or 0.8%, in the second quarter of fiscal 2012, an increase of 1.4%, through six months of fiscal 2012 compared to the corresponding periods a year ago. The decrease in net sales in the second quarter of fiscal 2012 is a result of an increase in promotional discounts, which are presented as a reduction of net sales. The increase in promotional discounts is due to the repositioning of our seasonal side dishes to be in stores for the holiday season only. As a result, we accelerated the cadence of our promotional discounts in anticipation of increased volume, such that the majority of the discounts negatively impacted sales in the second quarter of fiscal 2012, while such discounts mostly impacted the third quarter of fiscal 2011. We gained distribution in the stores that we currently do business as a result of our seasonal side dish repositioning. Additionally, we added new points of distribution to our network. In the second quarter of fiscal 2012, we experienced a 3.1% increase in total pounds sold. We anticipate sow costs for all of fiscal 2012 to come in at the high end of the range of $60 to $65 per hundredweight. We intend to grow our foods segment, both organically through new product introductions and by expanding our retail distribution, as well with acquisition opportunities that play to our strength in sausage and sides.
The foods segment cost of sales ratio was 58.8% of sales in the second quarter of 2012 (56.7% year-to-date) versus 53.1% of sales (55.1% year-to-date) in the corresponding periods a year ago. The increase in the foods segment cost of sales ratio in the second quarter was due primarily to a 12.2% increase in sow costs this quarter versus the corresponding period last year. Sow costs averaged $67.82 per hundredweight in the second quarter of fiscal 2012 compared to $60.47 per hundredweight in the second quarter of fiscal 2011. We expect sow costs to remain at the high end of the $60-$65 range.
In the restaurant segment, S,G&A expenses were 7.2% of sales in the second quarter of fiscal 2012 and 7.0% of sales through six months of fiscal 2012 compared to 9.6% and 7.9% of sales, respectively, in the corresponding periods last year. In the second quarter of fiscal 2012, we recorded $2.8 million of impairment charges related to certain property, plant and equipment. In addition, we recorded $0.3 million of severance costs. Partially offseting these charges in the second quarter of fiscal 2012 was a gain on sale of assets of $0.4 million. The decrease in the S,G&A ratio in the second quarter of fiscal 2012 was primarily due to impairment charges on certain property, plant and equipment and severance/retirement costs in the second quarter of fiscal 2011 of $10.3 million and $0.8 million, respectively.
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