COLUMBUS Ohio Bob Evans Farms Inc. blamed “an extremely challenging economic environment” as it reported a nearly 27-percent plunge in second quarter profit and lowered its financial outlook for fiscal 2009.
For the second quarter ended Oct. 24, Bob Evans recorded net income of $11.3 million, or 37 cents per share, compared with year-ago earnings of $15.5 million, or 45 cents per share. The results fell well below the average analyst forecast of 44 cents a share, according to Thomson Financial.
Second quarter net sales rose 2 percent, to $435. 4 million, Bob Evans reported. Same-store sales at Bob Evans' namesake family-dining chain fell 0.5 percent, with average menu prices up 2.9 percent. At the company's casual Mimi’s Cafe concept, however, same-store sales fell 8.3 percent, despite a 2.7-percent hike in average menu prices. Bob Evans blamed the sub-prime mortgage issues and lower home values in California, Arizona, Nevada and Florida, where most Mimi's Cafe units are located. Housing issues along with rising restaurant development costs in those areas, could slow development plans for Mimi's Cafe, the company said. Bob Evans opened four Mimi's Cafe units in the second quarter and rebuilt three Bob Evans locations.
In addition to sluggish sales in its restaurant division, Bob Evans said its food product segment was hurt in the second quarter by a "rapid increase" in average sow prices.
Because of the weaker-than-expected results and current economic trends, Bob Evans lowered its outlook for fiscal 2009 earnings to a range of $1.75 to $1.85 per share. The company previously expected to earn between $2.00 to $2.10 a share.
Bob Evans Farms owns and operates 570 Bob Evans family restaurants and 139 Mimi’s Cafe casual restaurants. It also produces and distributes pork sausage and home-style convenience food items under the Bob Evans and Owens brand names.