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Bob Evans net income up 7 percent in 3rd Q

COLUMBUS Ohio Citing “excellent cost management” and overall sales growth, Bob Evans Farms Inc. reported a 7-percent increase in its fiscal third-quarter net income on a revenue gain of 7.1 percent to $449.7 million.

For the quarter ended Jan. 25, Bob Evans earned $20 million, or 61 cents per share, up from net income of $18.7 million, or 51 cents per share, earned in the third quarter a year ago. The company’s 19.6-percent increase in per-share earnings was aided by a reduced year-to-year share count from Bob Evan’s repurchase of 2.3 million shares of its stock during the latest quarter.

Same-store sales at Bob Evans restaurants were up just 1.5 percent for the quarter, with average menu prices up 2.8 percent. Same-store sales fell 2 percent at the company’s other restaurant brand, the casual-dining Mimi’s Cafe, where menu prices averaged a 2.6-percent increase from a year earlier. Because the chains’ menu price hikes were higher than the same-store sales results, traffic for the latest quarter was negative at both concepts.

At Bob Evans, the company said sales were aided by the chain’s new Deep Dish Dinners, Blueberry Stacked and Stuffed Hotcakes and coffee. The chain also said it reduced labor costs during the quarter despite minimum wage increases. At Mimi’s Cafe, “adverse economic conditions” in California, Florida, Arizona and Nevada — areas that together account for about 75 percent of Mimi’s Cafe sales — were the culprit behind weak sales, Bob Evans said. Future development plans for the chain may be affected because of the slowed sales and higher operating costs, the company added.

Factors that worked in the company’s favor during the latest quarter included pretax income of $6.6 million from the company’s first-time recognition of sales from gift certificates and gift cards that consumers have failed to redeem — an accounting term known as “breakage.” In addition, Bob Evans booked a pretax gain of $100,000 from the sale of real estate assets. Working against the company was a $3.7 million charge for the closing of nine Bob Evans units and higher interest expense from the larger debt load the company has held to help repurchase shares.

The company said it still expected to earn between $1.77 per share and $1.84 per share for the full fiscal year, ending in April.

Bob Evans operates about 580 namesake restaurants and about 126 Mimi’s Cafes.

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