COLUMBUS, Ohio – Bob Evans Farms Inc. announced that for its 2011 third fiscal quarter ended Jan. 28, its food product segment's net sales totaled $90.9 million, up 4.7% compared to $86.8 million in the third quarter of fiscal 2010. Comparable lbs. sold decreased 9% compared to the third quarter of fiscal 2010.

More than offsetting the impact of the decrease in comparable lbs. sold was a $10.4 million, or 40.9%, year-over-year decrease in promotional discounts provided to retailers, along with increased authorizations of new products in key national accounts. Also contributing to the year-over-year sales increase was a pricing increase implemented at the end of the first quarter of fiscal 2011.

The food products segment's cost of sales was 54.3% of net sales compared to 58.3% of net sales in the third quarter of fiscal 2010. The improvement was due to significantly higher net selling prices per lb. sold, partly offset by a 27.5% year-over-year increase in sow costs, which averaged $51.16 per hundredweight compared to $40.14 a year ago.

Looking ahead, the company expects higher fourth-quarter commodity costs. Some categories driving the cost increase will be produce, pork, poultry, oil-based products, dairy, bakery and liquid eggs.

The company also expects an adjusted food products segment operating margin of approximately 8.2% to 8.8% for the full year, up from its previous estimate of 7.0% to 8.0%. It expects to realize continued improvements in its food products margins from pricing increases implemented early in the second quarter, effective management of sales promotions and continued cost savings resulting from manufacturing productivity initiatives.

Included in this estimate are average sow costs of approximately $55 to $60 per hundredweight for the full year. The company expects its average sow costs for the full year to be at the high end of this range.

The company's third-quarter operating results reflect excellent management of sales promotions and effective cost control in the food products segment, said Steve Davis, chairman and CEO.

"We delivered significant sequential and year-over-year improvement in the food products segment, which benefited from higher net sales, exceptional management of sales promotions and lower costs from productivity initiatives implemented earlier in the year," Davis said. "We achieved this despite a 27.5% year-over-year increase in sow costs.

Bob Evans Farms, Inc. is a leading producer and distributor of pork sausage and a variety of complementary homestyle convenience food items under the Bob Evans and Owens brand names. It also owns and operates full-service restaurants under the Bob Evans and Mimi's Cafe brand names.